EV startup targets classic luxury, not the green scene

LOS ANGELES — Lucid Motors' first retail showroom outside of its Silicon Valley headquarters is located in the Beverly Hills auto plaza for a reason. A Mercedes-Benz store is just a mile away. Audi and Cadillac dealerships are within walking distance.

The Lucid storefront, which opened in early October, looks out onto a section of Wilshire Boulevard populated with German sedans, European supercars and the occasional Rolls-Royce. The factory-run Lucid Studio and Service Center previously was a McLaren dealership.

While Lucid at first blush evokes comparisons to the California electric vehicle startup that is now the world's most valuable automaker, executives don't see Tesla as its principal rival, despite similarities such as the direct-to-consumer retail model and promises of future autonomous-driving features.

Rather, they see their first vehicle — the Lucid Air — as a no-compromise sedan with outrageous horsepower, industry-leading range and modern styling that puts it squarely in the premium space regardless of propulsion system.

"We're overtly, unashamedly targeting Mercedes-Benz," Lucid CEO Peter Rawlinson told Automotive News last week. "For the Lucid Air, the natural competitor is an S-Class Mercedes. For the Air Dream Edition, it's the AMG version of the Mercedes — but with a lot more performance and a lot cooler."

Lucid plans 20 brand stores across North America by the end of 2021 to tap into the high-end market, starting with the Air next year and an SUV two years later. They also plan exports, eventually to China.

The launch vehicle — the Air Dream Edition — offers 1,080 hp and up to 500 miles of range for $169,000 before EV credits and shipping costs. Deliveries of the limited edition are expected in spring 2021. More modest Grand Touring and Touring trims will follow later that year. The base Air, at $77,400 before EV credits and shipping, is set for production in 2022, also at Lucid's new Arizona factory.

Lucid claims the Air will be the quickest luxury sedan on the market, with a 9.9-second quarter-mile run. It also will have industry-leading range from its 113 kilowatt-hour battery, the fastest charging available at 350 kilowatts, the biggest front trunk and it will be the world's most aerodynamic production luxury vehicle.

"We've replaced range anxiety with range confidence and we've done so through efficiency — not extra batteries," said Rawlinson. "It's really difficult to get extra range through extra efficiency, but we've done that through our in-house technology."

While the Tesla Model S and Porsche Taycan EV are obvious competitors, Lucid is targeting the broader $100 billion global market for large luxury sedans and plans to export to Europe and the Middle East by 2022, said Rawlinson, former chief engineer for the Tesla Model S.

One advantage of the Air over the S-Class and other rivals, Rawlinson said, is space efficiency. The Air is smaller on the outside but bigger on the inside. That was made possible through the miniaturization of the Air's EV components compared with gasoline-powered cars and even other EVs.

In contrast to tech-heavy Tesla with its relatively spartan interiors and lack of physical buttons, Lucid is stressing more luxurious materials, immaculate fit and finish and rich paint quality — along with high-resolution screens across the dash and center stack. The main screen measures 34 inches.

The Air was formally revealed in September, four years after the first prototype was made public. Lucid's final step toward production was made possible by a more than $1 billion investment by the Public Investment Fund of Saudi Arabia that closed in early 2019.

Rawlinson suggested in an interview that the investment was much more than $1 billion — "maybe even" more than $1.3 billion, he said when pressed. Lucid is being very careful with those funds, he said, building only the first phase of its Arizona factory to meet a 2021 production goal of 8,000 cars or so.

At the September launch of the Air, Lucid also gave an early look at a stylish SUV it is developing on the same platform. Lucid said the vehicle, called Project Gravity, would arrive in 2023. The EV startup also is developing a smaller vehicle platform for more affordable cars and crossovers, Rawlinson said.

Sam Abuelsamid, principal research analyst at Guidehouse Insights, said that like other automotive startups, Lucid has a tough road ahead financially, even with a solid product.

"It's very much like the Tesla business model in that they are starting at the high end of the market to generate revenue and then gradually move down market to something more affordable at higher volume," he said. That didn't even work fully for Tesla, which had to repeatedly tap capital markets.

A big challenge for Lucid is the high price point for its launch vehicle, despite the Air's impressive specifications, Abuelsamid said. One possible advantage over Tesla in drawing buyers of gasoline-fueled sedans is the Lucid Air's focus on traditional luxury values such as cushy interiors and high build quality.

"I think the Air is much more like a luxury vehicle," he said. "Maybe not as ostentatious as a Mercedes S-Class, but going after a different sort of luxury, focusing on the technology and executing well. Can they execute to a level where people are going to spend that kind of money? We'll see."

In Lucid's Beverly Hills studio, there's a lot of excitement among the small staff. The main draw for buyers is the Air Dream Edition. But there also are presentations about the unique technology within the vehicle: the motor, the battery modules, the California-themed interiors for all of the Air trims.

There's also a virtual reality station with a mock vehicle interior. Sales Manager Matthew Grieci said Lucid shoppers can configure their Air order online and then go into the studio to see how the interior will look in the mock vehicle before putting down their refundable deposit.

While most visitors to the studio sign up online for a tour that can take an hour or longer, there are walk-ins as space and coronavirus precautions permit, Grieci said.

"We love having walk-up traffic when it's safe to welcome them in, because those are folks that have never met the brand," he said. "We have our ardent followers since before we were even called Lucid that come into the studio, but we also have people who've walked in for the first time, spent 15 minutes and said, 'How do I sign up for one?' "

Although current EV owners are natural clients for Lucid, Grieci said some of those making appointments are coming from gasoline-powered vehicles and want to see whether a high-end EV can fit into their lifestyle. A recent client, he said, owns a BMW 7 Series sedan, which competes with the S-Class.

"That's the kind of person where they've never considered an EV before because there hasn't been an offering that was to their liking or their taste," Grieci said. "You explain to them very quickly that they charge the car at their house and wake up every morning with 500 miles of range."