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Lucid Motors ramps up production as supply chain issues ease

Lucid Motors ramps up production as supply chain issues ease

Lucid Motors ramps up production as supply chain issues ease

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Lucid Motors said on Wednesday it increased production of its luxury electric sedans by more than 50% in the fourth quarter as better supplies of parts and materials helped the company slightly exceed its manufacturing target for the entire the year.

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The automaker said it produced 7,200 vehicles in 2022, its first year of manufacturing in significant numbers, including 3,500 in the fourth quarter. In August, the company said it was aiming to make 6,000 to 7,000 cars during the year.

This target, however, had been lowered from an earlier target of 20,000 vehicles. And Wednesday’s report disappointed Wall Street investors who expected more. Lucid shares fell more than 7% in after-hours trading.

Even though shortages of certain parts and materials persist, “it’s much better than before,” Lucid chief executive Peter Rawlinson said in an interview.

Car shipment remains a problem, Mr Rawlinson said, helping to explain why deliveries of 4,400 vehicles last year fell short of production.

Along with Rivian, a maker of electric pickup trucks, Lucid is among the most prominent companies trying to capitalize on the shift to electric vehicles and challenge traditional automakers.

Lucid’s main selling points are efficiency and reach. All variants of the sedan can travel at least 450 miles on a full charge, according to the Environmental Protection Agency. That’s more than any Tesla model.

Still, the odds are long. Tesla is the only new American automaker in more than a century to achieve mass production and survive as an independent company. Automotive manufacturing requires huge up-front investments and profit margins are typically slim.

Lucid’s lowest-priced model, the Air Touring, sells for $107,400, competing for wealthy buyers with companies like Mercedes-Benz and Porsche introducing luxury electric cars. Lucid has announced plans to start selling an $87,000 model this year.

The company plans in the next few years to produce cars that could compete with Tesla’s more affordable Model 3 and Y models, Rawlinson said Wednesday.

Lucid, which is backed by Saudi Arabia’s sovereign wealth fund, has $4.9 billion in cash, enough to survive at least until the first quarter of 2024, the company said in an earnings report on Wednesday.

Sales for the last three months of 2022 were $258 million, compared to $195 million in the third quarter. Lucid reported a loss of $473 million in the fourth quarter, compared to a loss of $530 million in the prior quarter.

The company doesn’t expect to turn a profit in 2023 as it continues to ramp up production, Lucid’s chief financial officer Sherry House said in an interview.

Lucid said Wednesday it aims to produce 10,000 to 14,000 cars in 2023. Prospective customers have reserved more than 28,000 vehicles as of this week, the company said, not counting up to 100,000 cars that the Saudi Arabia agreed to buy.

Mr Rawlinson warned that any reservations, which are non-binding, will result in sales. “You can never count your chickens before they’ve hatched,” he said.

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