Lucid faces production pressure in Q2 earnings

Lucid Motors faces pressure to show significant gains in its production ramp-up in its second-quarter earnings report that will come after the market close Wednesday.

With over 30,000 reservations for its Air luxury sedan and just 360 deliveries in the first quarter, the electric vehicle maker's progress in ironing out supply issues is seen by analysts as an important indicator of its financial future.

Lucid reported a $598 million operating loss in the first quarter and raised prices on all trims of the Air, which range from $89,050 for the Pure trim, including shipping, to $180,650 for the Grand Touring Performance.

Vehicle registration data from Experian tallied 827 Air registrations from January through May — the latest numbers available. Lucid has cited a lack of parts along with supplier quality issues for production constraints at its factory near Phoenix.

In February, the Newark, Calif., startup reduced its forecast for 2022 production to a range of 12,000 to 14,000 vehicles — down 30 to 40 percent from its initial estimates of 20,000

Lucid Group Inc. is expected to report second-quarter revenue of $145 million and a loss of 36 cents per share, Reuters said, citing data by Refinitiv. Lucid's stock price closed 6.5 percent higher Tuesday at $19.73. It started the year at $40.93.

"The company's deliveries in Q2 are likely to have increased significantly from the last reported quarter, which augurs well for revenue growth," said a note from Zacks Equity Research. "On the flip side, though, high operations expenses incurred by Lucid are likely to have played a spoilsport."

Zacks, which estimates Lucid's second-quarter loss at 44 cents per share, said "continued spending on capacity expansion of its manufacturing facility in Arizona coupled with the opening of new retail and service locations have been escalating operating costs."

Rivian Automotive, another California EV startup struggling with its production ramp-up, reported significantly higher production in the second quarter, at 4,401 vehicles compared with 2,553 in the previous quarter. But Rivian also announced jobs cuts of 6 percent of its 14,000-person work force. Factory positions were unaffected.

Rivian's stock price is up about 30 percent to a close of $35.01 Tuesday since its early July announcement of improving production numbers and its late July announcement of job cuts. It started the year at $102.72.

Tesla also reported job cuts globally, in June, of up to 10 percent.