EV maker Lucid (LCID) reported mixed first quarter results as a wider-than-expected loss trumped the company’s confirmation that its Gravity SUV is still on track for a 2024 debut.
For the quarter, Lucid reported revenue of $172.7 million, topping expectations of $150.1 million and nearly 16% higher than a year ago. Lucid’s loss per share, however, came in at $0.30, higher than estimates of $0.25, with its adjusted EBITDA loss coming in at $598.4 million compared to the $505.1 million forecast by analysts per Bloomberg.
“Our sales momentum is building, our focus upon cost remains relentless, and we believe Gravity is on track to become the best SUV in the world,” Lucid CEO Peter Rawlinson said in a statement. Lucid confirmed its Gravity SUV was set for a “late 2024” production start, and its upcoming midsize vehicle was slated for a late 2026 launch.
Lucid stock was down over 8% in after-hours trading.
Last month, Lucid announced that it produced 1,728 vehicles and delivered 1,967 vehicles in the first quarter, compared to 2,391 vehicles produced and 1,734 vehicles delivered in Q4. The sequentially higher delivery numbers were positive news for investors, and the company said that it is targeting 9,000 vehicles produced in 2024. Last year, Lucid produced 8,428 vehicles and delivered 6,001 to clients.
Lucid’s latest round of EV price cuts announced in February likely boosted sales, but there was concern it impacted the company’s margins – which Lucid doesn’t officially break out.
“If you look at in Q1, despite the pricing actions we took in the current quarter, our gross margin improved sequentially and that was as a result of cost optimization initiatives that were taking in the company, and technology is playing a critical role – battery costs, you know, [have] come down,” Lucid interim CFO Gagan Dhingra said to Yahoo Finance in a call shorty after Lucid’s earnings release.
Dhingra also noted the company worked with suppliers to bring down bill of material (BOM) costs, as well as logistics costs, to improve margins.
Another area of concern for investors is capital expenses incurred for its Gravity production activities. Lucid said capital expenditures hit $198.2 million in the quarter, with expenditures expected to tally $1.5 billion in 2024.
Rawlinson was optimistic that those costs would pay off for Lucid. “I’m really optimistic that [Gravity] is going to give us great scale, and so much of the cost structure is not about the BOM in itself – it’s about the economies of scale in terms of amortizing those damn fixed costs, and what we need is volume and I believe that Gravity is gonna give us volume,” Rawlinson said to Yahoo Finance.
In terms of its cash position, Lucid said it had $4.62 billion in cash and cash equivalents on hand, enough liquidity to last into the Q2 of 2025. Lucid announced in late March that it struck a funding agreement with its majority shareholder Ayar Third Investment Company for a $1 billion investment. Ayar is an affiliate of Saudi Arabia’s Public Investment Fund (PIF).
“We are a cornerstone of [Saudi Arabia’s 2030] vision, we are mutually incentivized for success,” Rawlinson said regarding Lucid’s deep ties with Saudi Arabia’s PIF sovereign wealth fund. “PIF wants us to succeed, this isn’t like a normal mere financial investment. But why are they confident in us? Because what differentiates us is that we’ve got the world’s highest technology in the space.”
Pras Subramanian is a reporter for Yahoo Finance. You can follow him on Twitter and on Instagram.
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