© Reuters. FILE PHOTO: A logo is seen on the wheel of a Lucid Air Dream Edition parked at the Nasdaq MarketSite as Lucid Motors (Nasdaq: LCID) began trading on the Nasdaq stock exchange after completing its business combination with Churchill Capital Corp IV in New
By Akash Sriram and Abhirup Roy
(Reuters) -Luxury electric vehicle maker Lucid stuck to its annual production target on Monday and said it had enough cash to start producing its much-awaited sport utility vehicles next year and into 2025, sending its shares about 4% higher in extended trading.
The company reported second-quarter earnings and revenue below market expectations, but its strong liquidity after a $3 billion stock offering in June led by its majority owner, Saudi Arabia’s Public Investment Fund, has given it an advantage over cash-poor peers that are battling parts shortages.
“We are not limited by our ability to manufacture. Most of the supply chain has now come through out of the COVID era,” CEO Peter Rawlinson told Reuters. “We are limited by our ability to sell the cars right now, and that is my key focus.”
Lucid said it was on track to produce 10,000 vehicles this year, but its deliveries in the second quarter were largely unchanged from the prior three months at 1,404 units.
To boost demand, the EV maker on Saturday slashed prices for its Air luxury sedan as part of a special offer, with the Air Pure model now selling for $82,400.
Competition from Tesla’s (O:) Model S, Air’s direct competitor and whose prices were cut sharply this year to $88,490, and rising borrowing costs have posed a threat to Lucid’s growth.
“People have been affected by the macroeconomic climate … so we’re bringing that price down,” Lucid’s chief financial officer, Sherry House, said in an interview, adding that reducing costs helped the company make that decision.
Although logistics and labor costs have come down, there was a “significant amount of opportunity” to cut costs further, she said.
Despite Lucid’s holding a lot of inventory, House and Rawlinson did not confirm how long the offer would last and if Lucid will stick to the lower prices if demand improves.
Lucid on Monday reported revenue in the April-June period of $150.9 million, missing estimates of $175 million, according to seven analysts polled by Refinitiv. Adjusted loss stood at 42 cents per share, wider than an estimated loss of 33 cents.
Cash stood at $2.78 billion at the end of June, compared with $900 million three month prior.
“Investors seem to be overlooking the miss in favor of the increased liquidity runway,” CFRA Research analyst Garrett Nelson said.
Lucid is set to unveil its Gravity SUV in November ahead of its launch in 2024.
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