Electric vehicle maker Lucid (LCID) reported mixed first-quarter results as a larger-than-expected loss outweighed the company’s assertion that its Gravity SUV is still on track to debut in 2024.
During the quarter, Lucid reported revenue of $172.7 million, beating expectations of $150.1 million and up nearly 16% from a year ago. However, Lucid’s loss per share was $0.30, above estimates of $0.25, with an adjusted EBITDA loss of $598.4 million compared to analysts’ expectations of $505.1 million at Bloomberg.
Lucid stock fell more than 10% in early trading Tuesday.
Last month, Lucid announced that it produced 1,728 vehicles and delivered 1,967 vehicles in the first quarter, compared to 2,391 vehicles produced and 1,734 vehicles delivered in the fourth quarter. The successively higher delivery numbers were positive news for investors, and the company said it was targeting to produce 9,000 vehicles in 2024. Last year, Lucid produced 8,428 vehicles and delivered 6,001 to customers.
The latest round of electric vehicle price cuts that Lucid announced in February likely boosted sales, but there was concern that they impacted the company’s margins, which Lucid did not officially announce.
“If you look at the first quarter, despite the pricing actions that we took in the current quarter, our gross margin improved sequentially and that was a result of the cost optimization initiatives that the company was taking, and technology plays a critical role – battery costs, you know, [have] “Get down,” Lucid interim CFO Gagan Dhingra told Yahoo Finance in a phone call shortly after Lucid’s earnings call.
Dhingra also noted that the company worked with suppliers to reduce bill of materials (BOM) costs, as well as logistics costs, to improve margins.
Another area of concern for investors is the capital expenditure incurred for Gravity’s production activities. Lucid said capital expenditures were $198.2 million in the quarter, and expenses are expected to reach $1.5 billion in 2024.
Rawlinson was optimistic that these costs would pay off for Lucid. “I’m really optimistic about it [Gravity] It’s going to give us scale, and a lot of the cost structure isn’t about the BOM per se — it’s about economies of scale in terms of amortizing those damned fixed costs, and what we need is scale and I think the appeal is it’s going to give us scale,” Rawlinson told Yahoo Finance.
Regarding its cash position, Lucid said it has $4.62 billion in cash and cash equivalents on hand, enough liquidity to last through the second quarter of 2025. Lucid announced in late March that it had entered into a financing agreement with Ayar Investments III, the majority shareholder in Its shares. To invest a billion dollars. Ayyar is one of the companies affiliated with the Saudi Public Investment Fund.
“We are the cornerstone of [Saudi Arabia’s 2030] “We are mutually motivated to succeed,” Rawlinson said regarding Lucid’s deep ties with the Saudi sovereign wealth fund. “The Public Investment Fund wants us to succeed, and this is not just an ordinary financial investment. But why do they trust us? Because what distinguishes us is that we have the highest technologies in the world in this field.”
Pras Subramanian is a reporter for Yahoo Finance. You can follow it Twitter and on Instagram.
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