A Lucid Air Grand Touring electric luxury car is displayed at the Lucid Motors Inc. studio and service center in Beverly Hills, Calif., on Feb. 25, 2021. Patrick T. Fallon/AFP via Getty Images
Lucid Motors CEO Silvio Napoli said on Aug. 4 that the company is delaying the launch of its more affordable midsize electric vehicles until the second half of 2027, as the luxury EV-maker undertakes a sweeping set of cost-cutting measures.
As part of what the company called an “operational reset,” Lucid is aiming to save $1.4 billion in cash this year, primarily by cutting production and inventory after posting mounting losses in the second quarter.
The EV maker reported a second-quarter net loss of $1.26 billion, compared with a loss of $855.3 million a year earlier. Revenue rose 56 percent to about $405 million from $259.4 million.
During the company’s second-quarter earnings call on Tuesday, Napoli said that the midsize models would arrive later than the previously planned launch in late 2026.
The vehicles, which are expected to carry starting prices below $50,000, are seen as crucial to Lucid’s efforts to reach a broader market beyond its luxury Air sedan and Gravity SUV.
Lucid’s factory in Saudi Arabia, where production of the midsize platform is expected to begin, is on track to be ready later this year, according to Napoli. But getting the supply chain in order will take longer, he added.
He said the company needs more time to ensure that the vehicles meet its quality standards and does not want to rush them to market as it did with the Air and Gravity, both of which encountered quality problems, particularly software bugs.
“Our objective is clear: Midsize will launch only when every process and quality requirement have been met,” Napoli said during the call. “We will not repeat the mistakes of the past by bringing a product to market before it is ready.”
Lucid’s projected savings of $1.4 billion include an estimated $600 million to $800 million cut in inventory. The company said it has deliberately reduced production to bring output more closely in line with demand, convert existing inventory into sales, and preserve cash.
Lucid announced in June that it would eliminate about 18 percent of its U.S. workforce, including the second production shift at its Arizona factory and the position of chief operating officer. It expects the June reductions to generate approximately $158 million in annualized savings.
A model of the Lucid AIR electric car is displayed at a showroom of LUCID, an American automotive and technology company that manufactures electric vehicles, in the Norwegian capital Oslo, on Sept. 25, 2024. Jonathan Nackstrand/AFP via Getty Images
The company had already announced in February a separate 12 percent reduction in its U.S. workforce.
Lucid is majority-owned by Saudi Arabia’s Public Investment Fund. The company recently rejected as “completely false” reports that it was considering a take-private transaction or a Chapter 11 bankruptcy filing.
Lucid ended the second quarter with approximately $3 billion in total liquidity, Napoli said on Tuesday. He told investors that recently secured financing, combined with its cost-cutting measures, should provide enough funding to continue operating well into 2027.
Reuters contributed to this report.
