Lucid Group (Lucid), an up-and-coming electric vehicle manufacturer, lowered its 2022 production estimate of its Lucid Air electric sedan from 20,000 units to 12,000 to 14,000 units. Since starting production in September, Lucid produced just 400 vehicles as of February 28 and delivered 300 vehicles. Lucid also delayed the launch of its highly anticipated Gravity electric SUV from 2023 to the first half of 2024.
Unlike other automakers, Lucid said that it is not struggling to procure semiconductors or components needed in its battery packs, but rather, has run into supply chain challenges with just a handful of its 250 or so suppliers. Lucid said that it is having trouble getting glass, carpets, and other cosmetic fixtures that are preventing it from getting cars off its production line and into customer hands. Lucid currently has an annual production capacity of 34,000 units per year at its Casa Grande, Arizona, manufacturing site. Lucid expects the bulk of the supply chain problems to ease in the coming months and then accelerate production and deliveries in the second half of the year.
Lucid has increased its total reservations for the Air sedan from 17,000 in mid-November to over 25,000 as of February 28. In response to high demand, Lucid is accelerating spending, aiming for US$2 billion in 2022 capital expenditures. Lucid finished 2021 with US$6.26 billion in cash on its balance sheet.
Lucid is in the process of expanding its Arizona manufacturing plant to an annual capacity of 90,000 units per year. Originally intended to be complete by 2023, Lucid now says that the first stage of the expansion, which increases capacity to 53,000 units, will be complete by the end of 2023.
Lucid also announced that it is investing in a second manufacturing plant, which will be in Saudi Arabia. The plant is expected to begin production in 2025 and have an annual capacity of 150,000 units per year. According to its most recent US Securities and Exchange Commission (SEC) filing on February 14, 2022, the Saudi Arabia Pubic Investment Fund holds a 61.7% stake in Lucid Group stock. Lucid cites Saudi Arabia as its second-largest target market outside the United States. Producing vehicles in Saudi Arabia will bring Lucid closer to a large subsection of customers while allowing it to benefit from Saudi Arabia’s free trade agreement with Kuwait, Oman, the UAE, Qatar, and Bahrain.