Forget Lucid Overtaking Tesla, Analyst Says EV Maker May Instead Be Headed For Titanic's Fate

Lucid Group Inc. LCID reported late on Wednesday below-consensus revenue for the fourth quarter and issued a weak production forecast for 2023, sending its shares down by over 9% in after-hours trading.

What Happened: Following the earnings call, Future Fund’s Gary Black said, “Listening to Peter Rawlinson on the Lucid earnings call is like listening to the tour guide on an ocean liner about to hit an iceberg.”

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On the call, the CEO took pains to sing the virtues of the company’s flagship Lucid Air premium electric vehicle. A case in point is his mention of a video showing the Lucid Air Sapphire beating rival Tesla Inc.’s TSLA Model S Plaid and the Bugatti Chiron and Ducati motorcycle in a quarter-mile road race.

He also assuaged concerns about battery supply by stating that an agreement Lucid signed in the fourth quarter, along with the existing agreements with LG Energy Solutions and Samsung would provide the cell supply for its Air and Gravity programs comfortably through 2025.

Rawlinson noted that its current 28,000 reservations were higher than the vehicles the Newark, California-based plans to produce in 2023, underlining the interest in its vehicles. This is in addition to the 100,000 vehicles it has agreed to supply to Saudi Arabia, he said. Deliveries of vehicles to Saudi Arabia will start in 2023, he added.

“I want to reiterate that we are not limited by production. We could scale up, but we're making a conscious decision to match production, whilst focusing upon cost-effective build quality” he said.

Why It’s Important: Lucid produced and delivered 3,493 and 1,932 vehicles in the fourth quarter, in line with the pre-announcement it made in mid-January. For the year, it produced 7,180 vehicles, exceeding the guidance of 6,000-7,000 units it issued in August 2022. Incidentally, the company twice lowered the guidance during the year.

Lucid reported fourth-quarter revenue of $258 million, missing the consensus estimate of $302.61 million, according to Benzinga Pro data.

The 2023 production guidance of 10,000-14,000 units, trailed expectations of 19,300, questioning Rawlinson’s assertion that all is well with the company. Reservations the CEO touted also marked a decline from the 34,000 the company reported in early November.

Tesla co-founder Martin Eberhard said in a recent interview with Business Insider that he was disappointed by companies such as Lucid as it is striving to take on the Elon Musk-led company with a very similar EV sedan as the Model S. He also reportedly said he had a short stint at Lucid in 2015, when it went by the name Atieva, as he was not a “big fan” of its CEO.

Price Action: Lucid, which settled Wednesday’s session 0.81% higher at $9.98, pulled back by 9.32% to $9.05 in after-hours trading.

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