Lucid Q1 losses widen to $779M amid EV price cuts

Lucid Group Inc.’s first-quarter net losses widened as sales came under pressure after aggressive price cuts from EV market leader Tesla Inc., sending shares lower more than 8 percent in extended trading.

The EV startup’s net loss for the first three months of the year stood at $779.5 million, compared with $604.6 million, a year earlier.

Tesla’s move to cut prices and increase volume, a strategy which CEO Elon Musk said is part of the EV maker’s recession playbook, has hurt newer entrants such as Lucid and Rivian.

Lucid last month reported first-quarter production and delivery figures lower than in the preceding three months, as higher borrowing costs following the Federal Reserve’s interest rate hikes hit consumer spending.

CEO Peter Rawlinson said in a statement on Monday the company was on track to produce over 10,000 vehicles in 2023, compared with an earlier forecast for 10,000 to 14,000 units this year.

The company reported quarterly revenue of $149.4 million, compared with analysts’ average estimate of $209.9 million, according to Refinitiv.

Lucid CFO Sherry House added that the company has $4.1 billion in liquidity, enough to fund the luxury EV maker at least into the second quarter of next year.

Musk has said Tesla is willing to sacrifice margin for sales volume but is also looking to move prices back higher, where it can, to match deliveries with output.

Lucid had cash and cash equivalents of $900 million at the end of the first quarter, compared with $1.74 billion in the fourth quarter.

Lucid is set to unveil its Gravity SUV later this year ahead of its launch in 2024.