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Lucid stock drops on Q3 sales miss, production forecast cut; analyst warns of 'major issues'

Lucid did say its Gravity SUV reveal is on track for the LA Auto Show.

Lucid (LCID) shares slid over 8% after the luxury electric vehicle maker reported Q3 results on Tuesday that missed the mark and cut its production forecast as demand slows for its pricey vehicles.

Lucid said it now expects to produce 8,000 to 8,500 vehicles from prior guidance of more than 10,000 in order to “prudently align with deliveries.” Last month the company reported deliveries of 1,457 vehicles and production of 1,550 vehicles, with production standing at around 6,000 through Q3. Lucid initially forecasted production of 12,000 vehicles for 2023.

Lucid’s deliveries resulted in Q3 top line revenue of $137.8 million, versus the $177 million expected by Wall Street, per Bloomberg. Lucid, however, reported an adjusted loss per share of $0.28, and adjusted EBITDA loss of $624.1 million, which were better than consensus estimates.

Lucid has had to gin up demand by implementing steep price cuts, as its luxury sedan — the Air — does not qualify for federal EV tax credits. Last week Lucid slashed the price of its Air Touring model to $87,500 from $95,000, its Air Pure model to $74,900 from $82,000, and its higher-end Air Grand Touring to $115,000 from $125,000.

Lucid CEO Peter Rawlinson also said the company achieved its goal of launching cheaper versions of the Lucid Air model, transitioned more production to its Phase 2 factory in Arizona, and opened its first plant in Saudi Arabia.

More importantly, Lucid also announced it was on track to debut its highly anticipated Gravity SUV at the LA Auto Show next week, with production of the Gravity slated for late 2024.

CARMEL, CALIFORNIA - AUGUST 18: Peter Rawlinson, CEO of Lucid is seen at The Quail, A Motorsport Gathering on August 18, 2023 in Carmel, California. (Photo by Matt Jelonek/Getty Images)
Peter Rawlinson, CEO of Lucid, is seen at The Quail, A Motorsport Gathering on Aug. 18, 2023, in Carmel, Calif. (Matt Jelonek/Getty Images) (Matt Jelonek via Getty Images)

“We recognize that there are forces that are out of our control and that some are not. We are navigating an uneven macro environment that is also affecting many others in the industry. But I'm excited about the remainder of this year and for 2024,” Rawlinson said during the company’s analyst conference call.

Despite Gravity being on track, CFRA analyst Garrett Nelson was far from impressed with Lucid’s performance. Nelson believes the production cut reflects “weak demand” for its vehicles and selling cars at a loss isn’t improving.

A teaser image of the Lucid Gravity SUV (credit: Lucid)
A teaser image of the Lucid Gravity SUV (Lucid) (Lucid)

“LCID's results revealed a disturbing sequential drop in price realizations to approximately $94,600 per vehicle in Q3 from $107,500 in Q2,” Nelson wrote in a note to clients on Wednesday. “With a high cash burn rate and an apparent lack of consumers willing to pay a premium for the brand, we think the company has some major issues.”

Nelson reiterated his Sell rating and cut his price target to $2 from $4.

Despite shares being down a whopping 42% year to date and ASPs (average selling price) falling, Rawlinson said “drastic steps” aren’t necessary to right the ship, at least at the moment.

“We're looking at all measures here, looking at our efficiency of making the cars, looking [at] our working capital, looking at inventory, all aspects of the business. We're also pushing like crazy to improve our delivery numbers,” Rawlinson said on the earnings call.

Pras Subramanian is a reporter for Yahoo Finance. You can follow him on Twitter and on Instagram.

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