Electric vehicle (EV) manufacturer lucid The group reported first-quarter revenue that was much lower than Wall Street estimates on Monday, and forecast 2023 output at a lower than previous guidance as the price war flared up by Tesla hurt sales.
Manufacturer’s stock Air Luxury sedans are down about 9% in extended trading.
Tesla’s move to reduce prices and increase production, a strategy that CEO Elon Musk is believed to be part of the electric car maker’s recession drama, as the cheaper electric models launched by traditional automakers have hurt startups like Lucid and Rivian car.
Lucid, facing growing losses, has largely dodged a price cut except for a $7,500 discount on select variants of the Air luxury sedan purchased before March 31.
Instead, at the end of March, it said it would lay off 18% of its workforce, about 1,300 employees, across the organization as part of a restructuring plan to contain costs.
The company reported quarterly revenue of $149.4 million, compared with the median analyst estimate of $209.9 million, according to Refinitiv. Last month, it reported lower production and deliveries figures for the first quarter than in the previous three months.
“Revenue is actually the lowest since Q2 last year, so there’s a big gap in revenue,” said Garrett Nelson, an analyst at CFRA Research. “This could be a sign that this price war is having a direct impact on their results.”
Lucid CEO Peter Rawlinson said in a statement Monday that the company is on track to produce more than 10,000 vehicles by 2023, compared with a previous forecast of 10,000 to 14,000 units this year.
“It seems like a subtle change in guidelines,” says Nelson.
Net loss for the first quarter increased to $779.5 million from $604.6 million a year earlier, while cash and cash equivalents fell to $900 million at the end of the first quarter from $1,500. $74 billion in the fourth quarter.
Chief financial officer Sherry House said the company has $4.1 billion in liquidity, enough to fund the luxury electric vehicle maker through at least the second quarter of next year.
Lucid said in a separate regulatory filing on Monday that it could raise up to $7.4 billion through the sale of shares, debt securities, warrants or other offerings over time.
Electric vehicle maker prepares to launch Gravity utility sports car later this year before launching in 2024.
