Lucid Group disclosed a decline in its deliveries and production during the fourth quarter of the previous year, resulting in a record low for its shares.
At the time of this publication, Lucid Group Inc stock (LCID) has witnessed a decline.
Lucid Group Inc
Current Price: $3.25
Change : -0.17
Change (%): (-4.84%)
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Source: Tomorrow Events Market Data
The electric vehicle (EV) manufacturer attributed the setback to a reduction in consumer demand amid soaring interest rates, causing a ripple effect that has compelled major players like Ford (F.N) and General Motors (GM.N) to defer their EV and battery factory expansion initiatives.
Analysts, including Garrett Nelson, a senior equity analyst at CFRA Research, expressed concern about Lucid’s market performance. Nelson emphasized the lack of both fundamental and technical support for the company’s stock, anticipating further lows. Lucid’s shares hitting a record low prompted this evaluation.
During the last quarter of 2023, Lucid witnessed a 10% decrease in deliveries, amounting to 1,734 vehicles, compared to the 1,932 units handed over in the same quarter the previous year. The broader EV industry trend was evident as Rivian (RIVN.O) also fell short of market expectations for deliveries in the final quarter due to a slowdown in EV demand in the United States.
One of the contributing factors to Lucid’s challenges has been a price war initiated by Tesla (TSLA.O), the market leader in the EV sector. Tesla’s strategic move, launched a year ago, aimed to fortify its market share and counteract declining demand, impacting competitors like Lucid.
Lucid reported a significant production decrease of approximately 31%, resulting in 2,391 vehicles produced during the quarter. This brought the annual production to 8,428 vehicles, aligning with the adjusted target range of 8,000 to 8,500 units. Lucid had previously revised down its production forecast in November, citing the need to prudently align output with deliveries.
The EV manufacturer’s financial woes were reflected in a 38% decline in its shares over the preceding year. Analyst Garrett Nelson noted that the latest results indicate Lucid’s cash burn rates have remained exceptionally high, causing concerns about the company’s financial runway.
Despite the challenges, Lucid showed marginal improvement in deliveries and production during the fourth quarter compared to the preceding three months. The company is slated to unveil its quarterly financial results on February 21, shedding more light on its financial standing and strategies to navigate the turbulent market conditions. Lucid, backed by Saudi Arabia’s Public Investment Fund (PIF), faces the daunting task of adapting to the evolving EV landscape and reinvigorating investor confidence in the wake of its recent setbacks.
