Luxury electric vehicle manufacturer, Lucid Group Inc., saw a surge in its shares during extended trading on Monday, initially rallying over 6% even as the company reported weaker quarterly sales. Despite this setback, Lucid has maintained its outlook for 2023 production goals, stating that they are still on track to surpass 10,000 vehicles. However, Chief Executive Peter Rawlinson acknowledges the need for continued efforts to expand the customer base.
Financial Performance and Market Reaction
Although Lucid experienced a boost in share prices initially, gains faded upon the release of its latest financial results. At last check, the stock was up 0.5%. In the second quarter, Lucid reported a loss of $764 million, or 40 cents per share, compared to a loss of $220 million, or 33 cents per share, in the same period last year. Despite the negative earnings, revenue increased from $97 million to $150.9 million year-over-year.
Market analysts surveyed by FactSet had anticipated an adjusted loss of 34 cents per share on sales of $181.6 million, further highlighting the disparity between expectations and actual performance.
Drive for Growth and Financial Stability
Following disappointments in previously reported production and delivery numbers in July, Wall Street closely observed Lucid’s yearly guidance. As the largest shareholder of Lucid, Saudi Arabia’s sovereign wealth fund revealed that the company had about $6.25 billion in total liquidity at the end of the quarter, which is projected to sustain operations until 2025. Lucid secured $3 billion in capital during the quarter, including $1.8 billion from the Saudi fund.
Unexpected Price Reductions
Earlier on Monday, Lucid surprised the market by announcing price cuts of up to 11.5% for its electric vehicles (EVs). This decision caught some industry experts off guard, as Lucid seemed to have limited room to lower prices considering negative gross margins. Cantor Fitzgerald analyst Andres Sheppard expressed surprise at the move.
Performance in the Market
Year-to-date, Lucid shares have experienced a decline of approximately 6%, in contrast to the S&P 500 index’s gains of around 18%.