Feb. 22 (Reuters) – (This Feb. 22 story was corrected in paragraph 8 to shift from the second quarter to the third quarter)
Lucid Group Inc ( LCID.O ) on Wednesday forecast 2023 production below analysts’ expectations and posted a sharp drop in orders in the fourth quarter as demand weakened.
The Newark, California-based company, already facing supply chain and logistics issues and struggling to deliver cars, has been hit by aggressive price cuts prompted by Tesla Inc ( TSLA.O ). and rising inflation.
“There’s more competition than there was a year ago … there are more EVs available for less than the Lucid Air,” said Garrett Nelson, an analyst at CFRA Research. “Customers are extremely disappointed as they have to wait a long time to receive the vehicles they ordered.”
Lucid said it expects to produce 10,000 to 14,000 luxury electric vehicles this year. Analysts expect the company to produce an average of 21,815 cars, according to Visible Alpha.
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The company, backed by Saudi Arabia’s sovereign wealth fund Public Investment Fund, delivered 4,369 cars last year.
“We’ve overcome major disruptions that have limited production, but that has had some impact on the demand we’ve generated in the beginning, and that’s been exacerbated by the challenging macroeconomic environment,” Lucid CEO Peter Rawlinson said on a call with analysts. The company reported fourth-quarter earnings that missed expectations.
Price cuts by Tesla and Ford Motor Co ( FN ) have made it harder for rivals such as Rivian Automotive Inc ( RIVN.O ) and Lucid to gain share in an industry that is competing for shrinking consumer wallets.
Lucid said it had more than 28,000 orders as of Feb. 21, down 6,000 bookings from the third quarter, which saw about 1,900 vehicles delivered and canceled. That’s despite Lucid offering a $7,500 discount on Feb. 9 for purchases of certain variants of the Air sedan before March 31.
Lucid does not release quarterly booking numbers, said finance chief Sherry House.
This year, the company will focus on improving production and distribution, and take a “serious and comprehensive” look at reducing operating and manufacturing costs.
House said Lucid will make between $1.5 billion and $1.75 billion in capital expenditures in 2023. That’s up 40% from 2022, but below analysts’ expectations of $2.24 billion.
Lucid reported a cash balance of $1.74 billion in the fourth quarter, after raising $1.52 billion in December. At the end of the third quarter, it had $1.26 billion in cash reserves.
Revenue rose to $257.7 million from $26.4 million in the quarter ended Dec. 31. Analysts on average were expecting sales of $302.6 million, according to Refinitiv’s IBES data.
The company’s net loss narrowed to $472.6 million, or 28 cents per share, from a loss of $1.05 billion, or 64 cents per share, a year earlier.
Lucid shares fell as much as 10.6% in extended trading. The stock fell 82% last year after Lucid cut its production forecast in half due to supply chain issues.
Reporting by Akash Sriram in Bengaluru and Abhirup Roy in San Francisco; Editing by Shinjini Ganguly, David Gregorio, Lincoln Feist and Leslie Adler
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