Lucid surpasses revenue estimates, reaffirms production targets amid strong demand for EVs

Lucid Group reported a stronger than expected revenue for the third quarter and stuck with its full year production forecast, while acknowledging it was 'challenged' by the wider market. The company shares rose 8 percent in after hours trading following the earnings release.

Data from LSEG shows that the electric vehicle (EV) maker posted third quarter revenue of USD 200 million, beat Wall Street’s consensus estimate of USD 198 million. Despite the fact that the company remains financially pressured, with high interest rates and comzpetitive hybrid models, the carrier has managed to increase revenue through price cuts and customer incentives like less expensive financing deals.

Cars produced by Lucid, backed by Saudi Arabia's sovereign wealth fund, continued to roll off the line at its assembly plant with no pause, sticking to its annual target of 9,000 vehicles. To reach this goal, Lucid must sell 3,357 cars in the final three months of the year. In Q3, the company managed to deliver 2,781 cars, but its actual production numbers fell sequentially by 1,810 units.

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Lucid is making progress in cost reduction, interim CFO Gagan Dhingra said, and is now seeing a better trend in gross margin performance. The company had a gross margin of -106.2% in Q3, up from its -134.5% gross margin in the previous quarter. But Lucid is still deep in the red, losing tens of thousands of dollars on each vehicle, eyeing profitability. Meanwhile, cost cutting by EV competitors including Rivian has also been taking place in order to narrow losses.

Lucid’s diversification strategy has included opening orders for its flagship Gravity SUV, a car that sells for USD 87,000 (AUD 119,655) but is targeting the lucrative SUV market in which Rivian and Tesla compete.

Last month, Lucid raised USD 1.75 billion through a public offering and private placement of shares, strengthening its cash position. The company’s cash reserves stood at USD 1.89 billion at the end of the quarter, up from USD 1.35 billion in the previous quarter, providing a runway to support operations through 2026.