Lucid Group Inc. (NASDAQ: LCID), the deeply troubled electric vehicle (EV) maker, may not be around for long. It will dump about 18% of its workforce, which is approximately 13,000 people. There may not be enough staff left for Lucid to be a viable manufacturer. (Here are the companies planning the biggest mass layoffs this year.)
CEO Peter Rawlinson, who has been the architect of the company’s ruin, wrote, “We are also taking continued steps to manage our costs by reviewing all non-critical spending at this time.” If this is accurate, presumably these cuts could have been made before Lucid was in such a desperate situation.
In a sign of Lucid’s desperate state, its shares are down 70% this year and should be down further.
Lucid has just recalled 637 of its most important Lucid Air model, “because of a potential power loss issue that may shut down the electric motors,” according to Inside EVs. The bad news for owners is that the flaw is dangerous. Lucid was quick to say this was a very small portion of Lucid Air vehicles, but the damage already was done.
Recently, Lucid announced another troubled quarter. Its revenue was $258 million, which was short of expectations. It lost $0.28 a share ($759 million). The company built 7,180 vehicles, which was well short of the forecast number. Lucid faces a cash squeeze and concerns about its future.
“The company ended the year with about $4.4 billion in cash and roughly $500 million available via lines of credit, enough to last until the first quarter of 2024,” according to Chief Financial Officer Sherry House. That is a grim figure, given that Lucid will build a shockingly low number of vehicles next year.
Production figures for next year do not get any better. Its production guidance was 10,000 to 14,000 for the entire year. Peter Rawlinson, Lucid’s CEO and chief technology officer, commented as the numbers were released, “Lucid Air has it all — industry-leading range, exceptional driving dynamics, and superior performance all wrapped up in a truly elegant design with a spacious interior cabin.” No one cares if they cannot buy one, and prospective buyers also have to worry about whether Lucid will be in business in two years.
Lucid faces a market in which the number of EVs built in America could top 3 million this year. Tesla could build as many as 2 million of those. And there is a price war among EV manufacturers. Some vehicle prices have dropped almost 20%. EV manufacturers are willing to sacrifice margins as they race for critical market share.
There is nothing about the EV marketplace in America this year that favors Lucid in any way. The company should give the money on its balance sheet back to shareholders and call it a day.
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