Lucid shares drop as deliveries take hit from Tesla’s price war

Lucid Group said its second-quarter production dropped from the previous three months while deliveries stayed flat, sending the shares of the luxury electric-vehicle maker down about 6% on Wednesday.

The Saudi Arabia-backed startup has been struggling to ramp up production in the face of supply chain issues, while a price war started by market leader Tesla in January has intensified competition.

Lucid delivered 1,404 vehicles in the quarter to June 30, compared with 1,406 deliveries in the previous quarter. Its production fell 6% sequentially to 2,173 vehicles.

The company had trimmed its 2023 production forecast and reported a lower-than-expected first-quarter revenue in May as it took a hit from Tesla’s price war and rising interest rates.

Its Air luxury sedans start at $87,400, putting them in direct competition with the Elon Musk-led automaker’s Model S that costs $88,490.

Lucid has also been struggling with a cash crunch and had unveiled plans in May to raise about $3 billion through a stock offering, nearly two-thirds of which would come from its largest investor Saudi Arabia’s Public Investment Fund.

Last month, it signed a deal with Aston Martin, giving the British company access to its electric powertrain and battery technologies in return for a 3.7% stake.

The company said it would report financial results for the second quarter on August 7 after markets close.

Source : Reuters

GLOBAL BUSINESS AND FINANCE MAGAZINE

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