Lucid plans to double 2023 production despite softening demand

Lucid Group’s reservation backlog for its Air sedan fell to 28,000 this week from 34,000 late last year in a sign of easing demand, as the luxury EV maker said it planned to nearly double production in 2023 to as many as 14,000 cars.

In its fourth-quarter earnings report Wednesday, Lucid said revenue rose to $258 million from $26.4 million a year earlier. Analysts on average had expected sales of about $303 million, according to Refinitiv data reported by Reuters.

Lucid shares fell nearly 9 percent in after-hours trading Wednesday to about $9 per share.

The automaker reported fourth-quarter production of 3,493 Air sedans, its only model, and deliveries of 1,932. For full-year 2022, the automaker reported production of 7,180 vehicles and deliveries of 4,369.

Lucid said on its third-quarter earnings call last year that it had 34,000 reservations for various trims of the Air sedan, which amounted to an extensive backlog. But earlier this month, the automaker announced sales incentives of up to $7,500 on some Air models after EV rival Tesla Inc. cut prices across its four-model lineup.

Lucid said in its fourth-quarter earnings report that it expects to produce 10,000 to 14,000 Air sedans this year.

The EV maker’s fourth-quarter net loss narrowed to $473 million from a loss of $1.05 billion a year earlier.

“Last year was a challenging year for everyone, yet despite the extraordinary supply chain and logistics challenges, the team persevered with an unrelenting focus on delivering what we believe is the best luxury sedan on the market,” Lucid CEO Peter Rawlinson said in a statement.

Rawlinson said that he was shifting his focus from resolving production issues associated with supply-chain constraints to drumming up sales amid softening demand.

“We’ve solved production,” Rawlinson said during the company’s quarterly call with analysts on Wednesday. “That is not the issue here now,” he added.

“My focus is on sales. And here’s the thing: We’ve got what I believe to be the very  best product in the world and just too few people aware of not just the car but the company,” Rawlinson said.

Lucid Group’s stock price jumped last month after unconfirmed speculation that Saudi Arabia’s Public Investment Fund, which holds a controlling stake in Lucid, could be working on a deal to buy out the rest of the automaker.

Lucid has not commented on the report by deals website Betaville, which characterized the item as market gossip. After the report, Lucid’s stock surged 43 percent to $12.87 at the Jan. 27 close.