Lucid Bitten By The Layoff Bug, Axes 400 Employees

Lucid Group Inc. has announced it is cutting 400 jobs by the end of the year in an effort to cut costs and boost profits. The company has delivered 1,967 vehicles so far this year, keeping it on track to achieve its goal of 9,000 deliveries, but given the brand’s disappointing 2023 performance and cooling of the EV market, the company isn’t taking any chances by reducing overhead.

According to Automotive News, the reductions account for about 6% of the company’s workforce and will be completed by the end of the third quarter of 2024. The company is expected to spend between $21 million and $25 million on the restructuring plan, allowing it to be better poised for the Gravity SUV to arrive by the end of the year.

Lucid Has Hit Its Rocky Startup Phase

In the beginning, every new EV company wows the world with its sleek looks and technological innovations, but once deliveries start (if they do at all), there comes a time when sales stall and the real work starts to survive until more products arrive. 2023 wasn’t a great year for the company, as it produced 8,428 vehicles over the course of the year, but missed delivery targets in Q4.

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The company started the year projecting to produce 10,000 vehicles but dropped that number down to 8,000-8,5000 by Q4. By the end of the year, revenue came in slightly below analyst expectations, but what’s even more is, that the company announced its staggering $377,000 loss per vehicle over the year, reaching as high as $430,000 lost per vehicle in Q3.

Compare this to Rivian, which only lost $33,000 per vehicle as of Q3 last year. It’s no wonder the company needs to cut costs and restructure.

The Company Still Has A Bright Future

Despite the souring news, this is more of a roadblock than a cliff, as the company has bright offerings and enough financial backing to help it push through. It recently received a $1 billion cash infusion thanks to an affiliate of the Saudi Private Investment Fund, which should easily see it get through 2024 and beyond.

With production projections cut to 9,000 for this year, the company is tempering expectations, but it isn’t slowing down on innovation. The Lucid Air Sapphire is simply a revelation, and the Air itself continues to get better as the years go on. The introduction of the Gravity SUV will help things exponentially, but the real cash cow will be the Tesla Model Y-rivaling Lucid Earth which should arrive in 2026.

Related

Lucid Gravity Embarks On Next Stage Of Its Development Journey By Ice-Drifting In Alaska

Lucid engineers claim the all-electric luxury SUV handles like a hot hatch or a sports sedan.

Lucid is currently sitting where Tesla was around the mid-2010s, but Tesla didn’t have to contend with an EV market that is starting to pull back. As EV infrastructure is built out and better electric vehicles are released, we expect companies to be able to dig themselves out of these holes in the next few years, but let’s hope they’re around long enough to do so.

Source: Automotive News