July 12 (Reuters) – Lucid Group (LCID.O) said its second-quarter production fell from the previous three months while deliveries remained flat, sending shares of the luxury electric car maker down nearly 12% on Wednesday.
The Saudi-backed startup has struggled to ramp up production in the face of supply chain issues, while a price war launched by market leader Tesla (TSLA.O) in January has ramped up competition.
Lucid delivered 1,404 vehicles in the quarter ended June 30, compared to 1,406 vehicles in the prior quarter. Its production decreased by 6 percent compared to the previous quarter, to 2,173 cars.
The company slashed its 2023 production forecast and reported lower-than-expected first-quarter revenue in May, taking a hit from Tesla’s price war and rising interest rates.
“We continue to view Lucid as a stalling growth story and its rate of rise has been particularly disappointing given its newer, state-of-the-art plant in Casa Grande, Arizona,” said Garrett Nelson, CFRA Research Analyst.
Lucid’s Air luxury sedans start at $87,400, which puts it in direct competition with the Elon Musk-driven automaker’s Model S that costs $88,490.
“We continue to believe that significant over-the-air price reductions are needed, particularly in light of increased competition, in order to stimulate demand,” Nelson added.
Lucid is also grappling with a liquidity crunch and revealed plans in May to raise about $3 billion through a stock offering, nearly two-thirds of which will come from Saudi Arabia’s Public Investment Fund, the kingdom’s largest investor.
Last month, the electric car maker signed a deal with Aston Martin (AML.L), giving the British company access to its electric powertrain and battery technologies in exchange for a 3.7% stake.
Lucid said it will report its financial results for the second quarter on Aug. 7, after markets close.
Reporting by Akash Sriram in Bengaluru; Editing by Arun Koyoor and Shonak Dasgupta
Our standards: Thomson Reuters Trust Principles.
“Web maven. Infuriatingly humble beer geek. Bacon fanatic. Typical creator. Music expert.”