Are Price Cuts Finally Paying Off for Lucid?
Lucid reports that it produced 1,728 units of the Air sedan in the first quarter of 2024, while also delivering 1,967 units, seeing a modest bump over the previous quarter but also setting a quarterly record in the process.
The EV maker has instituted several rounds of price cuts in 2023 and 2024, and has recently launched the least expensive version of the Air sedan.
Lucid recently secured a $1 billion investment from its majority stockholder, an affiliate of Saudi Arabia's Public Investment Fund, by way of a stock sale.
A year ago Lucid was in the midst of cost cutting measures, reducing prices for the Air sedan while also reducing its headcount. In fact, the luxury EV maker indicated at the time that it was cutting some 18% of its workforce in a bid to save up to $30 million in expenses.
Things were looking gloomy, despite the high marks its Air sedan received from the automotive press, with the Gravity sedan still months away from its reveal. And other EV makers seemed pessimistic about 2023 as well.
A year later, Lucid appears to be heading in the right direction having reported that it produced 1,728 units of its Air sedan while also delivering 1,967 units, which is a quarterly delivery record for the automaker.
By comparison, during the fourth quarter of last year the EV maker produced 2,391 sedans while delivering only 1,734, prompting more reports of weakening demand that have dogged EV makers for much of the year. And in the first quarter of 2023, Lucid reported deliveries of just 1,406 sedans.
Production has dropped, therefore, over the past quarter by a significant margin.
Just weeks ago Lucid instituted the latest round price cuts, lowering prices by $1,000 for the Grand Touring model, and by $8,000 for the Touring. That's after another notable round of price cuts last August that saw the Air Grand Touring drop its price by $12,550, with other versions of its sole model seeing serious price cuts as well.
The base Air Pure model has dropped in price by $7,500 just weeks ago.
Are the price cuts paying off in the short term?
It's still a complex picture, with Lucid having seen a rough year and a half amid industry worries about a slump in demand. Relying on a single EV model, albeit available in different specs and a wide price range, Lucid could only afford to reduce prices so much even as it began sales of its most affordable model in the fall of 2023.
Unlike Tesla, it didn't have a wider model range to lean on, and it saw stiff competition not only from Tesla but all the new luxury electric sedan arrivals from Team Germany.
Now, Lucid is months away from the start of Gravity SUV production, having also revealed plans for a third and even more affordable model, aimed at the Tesla Model Y. However, this third model is still a long way from production, slated to launch in 2026, by which time the EV market may appear unrecognizable once again.
Last month Lucid also secured a $1 billion investment from an affiliate of Saudi Arabia's Public Investment Fund via a stock sale, with Ayar Third Investment Company already being its majority stockholder.
"With their support, we remain focused upon accelerating our growth via deliveries, executing key business initiatives with relentless focus upon cost, and launching our game-changing Gravity SUV later this year," Lucid CEO Peters Rawlinson said at the time.
It should take the rest of 2024 to see if Lucid has truly been able to successfully counter lagging demand, but the Gravity SUV should improve its outlook by the end of the year.
Will Lucid be able to find an audience for its Gravity SUV, or is buyer interest shifting to smaller and more affordable models? Let us know what you think in the comments below.
