Lucid Group, the luxury electric vehicle maker that went public in July this year, reported a wider loss and lower-than-expected revenue for the Q1 2022. The company’s first-quarter revenue was $149.4 million, while analysts had expected $210 million, leading to a 9% dump in Lucid’s shares, which later fell 6.3%. The California-based company’s Q1 net loss of $779.5 million was larger than the $81.3 million in Q1 2021.
Lucid’s Q1 2022 financial results also showed a slowing demand for its luxury electric Air sedan. Although the company delivered 2,356 vehicles, secutive decrease compared to its last quarter delivery numbers. The continued chip and parts shortages have led to a slower pace of production lines, causing electric vehicle production delays. Lucid expects to produce more than 10,000 vehicles in 2023.
The cost of revenue reached $500 million in Q1 2022, double the amount in the same period of the prior year when it was $250 million. Total costs and expenses rose almost 40% year-over-year to $921.5 million. The company’s cost-saving plan resulted in laying off 18% of its workforce in March, primarily from its Silicon Valley headquarters.
Lucid’s shares rose 2.5% to $21.73 in early trading following the Q1 2022 financial results. They were higher before the release of the results but only partially recovered after the initial dip.
Despite the lower-than-expected revenue and wider losses, Lucid expects its liquidity to be around $4.1 billion at the end of the Q1 2022. Though the company’s revenues fell short of the market expectation, Lucid management commented that they had expected a softer first three months. The company has several operational initiatives in place to ensure the production and delivery of more cars to meet customer demand.
Lucid is a relatively new entrant to the electric vehicle market, and some challenges are not unexpected. However, the company’s management will need to address the production delays that have resulted from the chip and parts shortage to meet the projected vehicle production targets. Lucid has plans to release a new electric vehicle model in early 2023, and its success will depend significantly on the company’s ability to overcome the current market challenges.
In conclusion, Lucid Group’s Q1 2022 financial results showed a lower-than-expected revenue, wider loss, and slowing demand for its luxury electric Air sedan. The company needs to ramp up its production, reduce the cost of production, install de-risking measures and streamlines its operations to meet the demand for electric vehicles. However, the company has enough liquidity, and its shares have recovered somewhat after the initial dip. Lucid’s success will depend on the company’s ability to navigate the challenges posed by the current market.
