A pivot from emphasizing production to sales is at the center of Lucid Group Inc.’s 2023 outlook after a year in which the company produced more than 7,000 vehicles and delivered nearly 4,500. Now, executives hope to double those numbers in 2023 with a forecasted production range of 10,000 to 14,000 vehicles.
In 2022, Lucid took in $608 million in revenue but took a net loss of $1.3 billion, nearly half of the $2.6 billion it lost in 2021. In the fourth quarter alone, the company booked sales of $257 million and lost $472 million. Gross profit also decreased significantly compared to 2021, with $1.03 billion lost in 2022, compared to $127 million lost the previous year.
CEO Peter Rawlinson attributed part of the larger losses to production capacity, as the company’s lines have been designed for a higher volume than they are currently cranking out and “production bottlenecks,” which affected the amount of car produced in 2022. In 2021, the outlook for 2022 was 12,000 to 14,000 cars, a goal executives fell short on. However, Rawlinson is still confident in the ability to deliver this time around, particularly with shipments to the Middle East, where Lucid has been backed by a Saudi Arabian public investment fund and has a deal with the Kingdom of Saudi Arabia to deliver up to 100,000 cars over the next 10 years.
“We've already supplied small numbers to [Europe and the Middle East], but we're really ramping up now in earnest,” Rawlinson said.
In addition to increased production, executives also want to maximize customer interest and demand. As of Feb. 21, the company had 28,000 reservations, representing $2.7 billion in potential sales. But that number is a decrease from the 34,000 reported in November. Rawlinson acknowledged the drop but focused on converting as many of those into orders as possible, even at the cost of scaled-up production.
“We're making a conscious decision to match production, whilst focusing upon cost-effective build quality. We are focused on building versions of Air to meet customer interest [...] and getting Lucid Air into the hands of more drivers who can become brand advocates,” he said.
What leadership expects to be key in creating more orders is marketing more configurations and brand awareness. According to Rawlinson, “too few people” are aware of the company. Once they broaden that awareness, sales will go up, especially as more trims become available, which CFO Sherry House indicated some customers with reservations were waiting on.
“Some [reservation holders] are waiting for us to offer their very specific configurations in volume. We talked about that already, whether it be pure, whether it be Stealth, whether it be some of the Middle East and European configurations as well,” she said.
But there have already been complications early into Q1 with one of the most popular configurations: the Stealth look. Deliveries had been set to begin in 2023, but as a “supply chain issue” is impacting shipments, but Rawlinson indicated that the company was working to resolve it as quickly as possible.
Despite the setback, other production goals are still on track, with the Lucid Air Sapphire’s production to start in the summer and reservations opening for the new Gravity SUV later this year and production beginning in 2024.
After reporting earnings on Feb. 22, Lucid stock (Ticker: LCID) fell from trading at $9.98 per share to $8.14 the following day. Over the past six months, they have lost nearly half their value.
