Lucid Group nasdaq Lcid Reports Wider than expected Loss Stock Tanks

Lucid Group (NASDAQ: LCID) Reports Wider-Than-Expected Loss, Stock Tanks

Lucid Group (NASDAQ: LCID) stock plummeted about 10% in pre-market trading Tuesday after the company posted a wider-than-expected loss for the first quarter.

Lucid (LCID) recently reported mixed results for the first quarter, with revenue surpassing expectations but a wider-than-expected loss overshadowing the company’s confirmation of the on-track status for its highly anticipated Gravity SUV, scheduled for a 2024 debut.

In Q1, Lucid (NASDAQ: LCID) reported revenue of $172.7 million, beating expectations of $150.1 million and marking a nearly 16% increase compared to the previous year. However, the company’s loss per share came in at $0.30, higher than estimates of $0.25, while its adjusted EBITDA loss of $598.4 million surpassed analysts’ forecast of $505.1 million.

Despite the mixed financial performance, Lucid CEO Peter Rawlinson remains optimistic about the company’s trajectory, citing growing sales momentum and an unwavering focus on cost optimization. He said, 

“Our sales momentum is building, our focus upon cost remains relentless, and we believe Gravity is on track to become the best SUV in the world.”

The confirmation of the Gravity SUV’s production start in “late 2024” provided a glimmer of positivity for investors. In addition, Lucid outlined plans for the launch of its midsize vehicle, scheduled for late 2026.

Q1 Production and Delivery Figures

Moreover, Lucid’s production and delivery numbers for the first quarter indicate a positive trend. The company produced 1,728 vehicles and delivered 1,967 vehicles, showing an increase in deliveries compared to the previous quarter. Lucid aims to manufacture 9,000 units in 2024, building on the momentum generated in the first quarter.

Investor Concerns and CEO Response

However, concerns linger regarding Lucid’s margins, particularly in light of recent EV price cuts announced in February. While these cuts likely boosted sales, there are uncertainties about their impact on margins, which Lucid does not officially break out. In addition, investors are monitoring the company’s capital expenses, which totaled $198.2 million in the quarter and are expected to reach $1.5 billion in 2024, primarily driven by Gravity production activities.

Rawlinson remained optimistic about the long-term benefits of these investments, highlighting the potential for economies of scale and volume growth with the Gravity SUV. Rawlinson told Yahoo Finance,

“I’m really optimistic that [Gravity] is going to give us great scale, and so much of the cost structure is not about the BOM in itself — it’s about the economies of scale in terms of amortizing those damn fixed costs, and what we need is volume and I believe that Gravity is gonna give us volume.”

In terms of liquidity, Lucid reported $4.62 billion in cash and cash equivalents, providing sufficient liquidity to sustain operations into Q2 of 2025.

Lucid (NASDAQ: LCID) Stock Movement

At 4:19 a.m. (Eastern Time) Tuesday, LCID stock traded at $2.79, marking a decrease of 8.52% compared to the previous trading session.