Here’s Why Lucid Just Cut Its 2022 Production Plans
- Lucid reduces 2022 production outlook from 20,000 Air sedans to between 12,000 and 14,000, citing supply-chain issues.
- The EV maker has revealed plans for a factory to be built in Saudi Arabia, slated to begin vehicle production in 2025.
- Lucid has delivered some 300 Air sedans since starting production in the closing months of 2021, but has built around 400 sedans in total.
The automaker has revealed its fourth quarter results this week, indicating it has achieved $26.4 million in revenue this year, with $21.3 million of it from deliveries of more than 300 Lucid Air sedans to customers out of over 400 produced so far.
“Looking ahead, we’re updating our outlook for 2022 production to a range of 12,000 to 14,000 vehicles,” said Peter Rawlinson, Lucid’s CEO and CTO. “This reflects the extraordinary supply chain and logistics challenges we’ve encountered and our unrelenting focus on delivering the highest-quality products. We remain confident in our ability to capture the tremendous opportunities ahead given our technology leadership and strong demand for our cars.”
Originally, Lucid had planned to produce some 20,000 units of the Air sedan in 2022, after starting production last October at its greenfield plant in Casa Grande, Arizona.
In retrospect, that number appears to have been wildly optimistic. The automaker managed to complete and deliver some 125 sedans in the last few months of the year, representing steady (but slow) momentum, with a similar number delivered so far through 2022, as we enter the third month of the year.
The pace of production will need to quicken substantially over the coming months for Lucid to achieve even the lower end of its 12,000-car goal for this year. Taken at face value, the substantial reduction in the projected number of cars assembled this year represents a 40% cut if Lucid manages to build 12,000 vehicles, which appears unlikely.
News of the dramatic cut to its 2022 production outlook has already dinged Lucid stock today.
Even though Lucid currently offers a model that competes with the Tesla Model S, among others, it is a long way from matching Tesla’s annual volume, which in 2021 amounted to over 930,000 delivered cars. Even a 20,000-unit annual production schedule places Lucid in a vastly different category as established automakers offering EVs at the moment.
The automaker did have some positive news this week, revealing plans to open a second assembly plant, this time in Saudi Arabia. However, the plant will not be ready until the middle of the decade, and would still require plenty of investment to bring online.
However, the automaker is now projecting a substantial cut in its production outlook for 2022, citing issues we’ve all been accustomed to hearing in the industry over the past two years.
“We continue to invest in our business; we met our target of opening 20 Studio and Service locations in North America; in 2022 we will expand our footprint in Europe and the Middle East while laying the foundation for a later expansion into the Asia Pacific,” Lucid CFO Sherry House said.
House said Lucid remains on track to “quadruple” the size of it Casa Grande plant in Arizona, although the slow production ramp-up suggests there’s no hurry for new brick-and-mortar.
“Today we announced plans to build a brand new manufacturing facility in the Kingdom of Saudi Arabia,” House said. “We estimate that the location of our first international manufacturing plant in the Kingdom of Saudi Arabia may result in up to $3.4 billion of value to Lucid over 15 years.”
The first examples of the Lucid Air, dubbed Dream Edition, debuted with a $169,000 price tag, but the automaker is expected to roll out relatively more affordable variants of the luxury sedan, with a starting price around $78,900.
The Air sedan’s top range EPA rating of 520 miles in some of its models has provided bragging rights for Lucid, as other automakers have begun aiming for similarly high ranges out of reach at the moment.
The automaker has a second model in the works, with the Gravity SUV slated to enter production in 2024.