Lucid Group sold 3,806 electric vehicles in the third quarter of 2024 while producing only 2,954, an intentional reversal of its previous manufacturing-heavy business model. By delivering 852 more vehicles than it built, the company is actively reducing its existing inventory to preserve cash. This shift marks the first full quarter under CEO Silvio Napoli, who took the helm in June and began dismantling the company’s former "growth at all costs" strategy.
Production Output Falls to 2,954 Units
The company’s production output fell by approximately 24% compared to the same period last year, dropping to 2,954 units. This decline is part of a broader restructuring plan announced in August, which aims to align manufacturing volume with short-term demand and clear out excess stock accumulated during previous expansion phases. To achieve this, Lucid eliminated the second shift at its AMP-1 factory in Arizona, consolidating operations into a single production line.
Financial Restructuring Goals
Lucid has set a target to improve its cash flow by $1.4 billion by 2026. Management plans to achieve this through three primary channels:
- Inventory Liquidation: $600 million to $800 million from selling existing vehicle stock.
- Capital Expenditure Control: Approximately $500 million in savings.
- Operational Expense Reduction: $200 million through organizational streamlining, which included laying off approximately 1,500 employees and consolidating leadership roles.
Share Price Drops 80 Percent Despite PIF Backing
The strategic pivot comes as Lucid faces a cooling global EV market and significant stock price volatility. The company is majority-owned by Saudi Arabia’s Public Investment Fund (PIF), which has invested billions into the automaker to support the kingdom’s economic diversification goals. Despite this backing, Lucid’s share price has struggled, losing approximately 80% of its value over the past 12 months and closing at $4.17 on Monday.
Outlook for Gravity SUV and Future Models
While Lucid reported that demand for its upcoming Gravity SUV is gaining momentum, it has not provided specific figures to quantify this growth. The Gravity is intended to broaden the company’s customer base beyond the early adopters of its Air sedan. The automaker’s path to higher volume remains tied to a mid-sized EV model, which is not scheduled to begin production until the second half of 2027. To meet Wall Street’s consensus for 2024, the company must deliver approximately 6,200 vehicles in the fourth quarter, a significant increase from its previous quarterly record of 5,345.
Analyst Perspectives on Lucid’s Strategy
Market reaction to the restructuring remains divided. Cantor Fitzgerald analyst Andres Shepherd maintained a "hold" rating with an $8 price target, noting that while the company has potential for recovery, the investment remains speculative. Other firms have lowered their expectations; Citigroup reduced its target price to $11 in August, and RBC Capital currently maintains a "sector perform" rating with a $7 target. Data from TipRanks shows a consensus "hold" rating among analysts, with an average price target of $8.71.
Lucid Sets Earnings Call for November 9
When will investors receive a detailed update on these financial targets?
Lucid is scheduled to release its third-quarter financial results on November 9, after the market closes. This earnings call will be the first opportunity for CEO Silvio Napoli to outline his long-term vision for the company’s trajectory.
What is the current status of the Arizona manufacturing facility?
The AMP-1 factory is now operating on a single production line following the elimination of its second shift. This reduction in manufacturing capacity is a core component of the company’s effort to align production with current demand and improve cash flow.
How does Lucid plan to reach a wider market segment?
The company plans to launch a mid-sized EV model in the second half of 2027. This vehicle is considered by analysts to be the company’s most viable path toward achieving high-volume sales, though it will not contribute to revenue for more than a year.
Lucid’s total deliveries for the first nine months of 2024 reached 10,852 vehicles, placing the company in a position where it must exceed its previous quarterly delivery record by roughly 16% to meet annual expectations.
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