Lucid’s Latest Loss Isn’t the Problem for the Stock. EV Pricing Is.

Lucid Group shareholders have had to endure a lot lately. The company’s first-quarter earnings report pointed to a new problem — pricing — rather than a fix.

As of Monday night, Lucid (ticker: LCID) reported a loss of 43 cents a share on revenue of $149 million. Wall Street expected the high-end electric car maker to lose 39 cents a share on sales of $204 million.

Lucid delivered 1,406 vehicles in the first quarter, bringing the average revenue per delivery to about $106,000. In the fourth quarter, that number was about $133,000. That suggests prices have fallen faster than Wall Street analysts were predicting. Analyst consensus forecast for sales was about $145,000 per vehicle.

Prices for many electric vehicles have fallen since the beginning of the year because Tesla (TSLA), the largest manufacturer, has cut prices several times in an apparent attempt to gain market share. This includes their most expensive vehicles, which compete with the Lucid Air.

Along with sales, management’s guidance on production could make investors nervous. “We are on track to produce over 10,000 vehicles by 2023,” CEO Peter Rawlinson said in the company’s press release.

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When Lucid released fourth-quarter numbers in February, management told investors to expect production of 10,000 to 14,000 vehicles in 2023, but the latest guidance didn’t include a figure for the higher end of the range. Wall Street had forecast annual production of around 20,000 to 22,000 in February.

Fourth-quarter results showed 28,000 vehicle reservations, up from 34,000 when Lucid released its third-quarter 2022 results. There is no reservation number in Monday’s press release.

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Lucid shares fell 8.7% in after-hours trading after falling 0.2% in regular trading. The

Nasdaq Composite

rose 0.2% while the S&P 500 was flat.

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Along with demand, cash is an important issue for start-up EV companies. Lucid ended 2022 with approximately $4.4 billion in cash and $4.9 billion in liquidity when credit facilities were included.

At the end of the first quarter, the company had approximately $3.4 billion in cash and $4.1 billion in total liquidity.

The company used about $1 billion in cash in the first quarter. That’s a lot considering Wall Street expects the company to squash about $3 billion and $2.1 billion in 2023 and 2024, respectively.

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Lucid spent approximately $3.9 billion building its business in 2022. Wall Street doesn’t expect free cash flow to be positive until 2026.

That cash on hand and cash burn rate means capital will be needed at some point in the future. When Lucid may sell stock to raise funds is at the discretion of management and the market.

Management has scheduled a conference call at 5:30 pm ET to discuss the results and outlook for the full year.

Demand and production issues have weighed on investor sentiment, while rising interest rates and a slowing economy weighed on auto stocks in general. Lucid shares are down about 58% over the past 12 months, while General Motors (GM) shares are down about 15%. The S&P 500 is flat over the same range.

Write to Al Root at [email protected]

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