EV startup Lucid plans $10M R&D center, 260 jobs in Detroit area

Electric vehicle startup Lucid Motors is planning to invest $10 million and create 260 jobs at a new engineering research and development center in metro Detroit, Crain’s Detroit Business has learned.

The project is set to be considered for state incentives by the Michigan Strategic Fund board on Tuesday, according to three sources familiar with the plan who requested anonymity.

The California-based company had been exploring sites for more than a year, and about half a dozen states were vying for the project, sources said. Company representatives are expected to bring a prototype of the Lucid Gravity – the automaker’s planned crossover vehicle – to Lansing for a show-and-tell with public officials Tuesday.

The company declined to comment. The Michigan Economic Development Corp., which administers state incentives, also declined to comment.

The project represents a struggling Silicon Valley startup coming to the Motor City to plant a flag. Lucid is among the ballyhooed EV startups, like Rivian, now facing the reality check of consumer demand that isn't growing as quickly as some hoped.

Lucid lost $2.8 billion last year, according to its fourth-quarter earnings report, and it laid off 1,300 employees. Executives said on the earnings call this week that the company expects to make just 9,000 vehicles this year as interest rates hamper demand.

Lucid already has about 25 Michigan-based employees working remotely as the company looks to open its office, one of the sources said.

The luxury Lucid Air, its only vehicle on the market, starts at about $70,000. It aims to launch production of the Gravity later this year.

For Michigan, the Lucid deal marks another win in securing white collar corporate investment, a key priority for Gov. Gretchen Whitmer’s administration as a new R&D tax credit nears legislative approval. Michigan is the only state in the Midwest without such a credit, putting it at an economic development disadvantage, officials have said.

Electric truck manufacturer Scout Motors Inc., a unit of Volkswagen Group, said late last year it planned to invest $11 million and create 200 jobs with a new R&D center in Novi, 31 miles west of Detroit. It is planning the center in tandem with a new $2 billion factory being constructed in South Carolina.

“As we design and engineer our vehicles, Michigan is the perfect place to establish our Innovation Center due to its deep automotive roots," Scout CEO Scott Keogh said in a statement at the time.

Lucid is far from alone in its EV upstart troubles. Rivian said this week it would cut 10 percent of its staff after reporting a $1.5 billion loss last year and anticipating flat production this year. That comes after hundreds of jobs eliminated in 2022.

In 2021, a Rivian spokesperson told Crain’s Detroit Business it doubled its headcount to 600 in Plymouth Township, where it has an engineering center. The company has not responded to multiple recent requests for comment about its current Michigan footprint.

Lucid’s Southeast Michigan office is its third employment hub in the U.S. The company’s footprint is anchored by a 300,000-square-foot HQ in Newark, Calif., and it has a manufacturing plant in Arizona and one in Saudi Arabia.

Lucid was founded by an ex-Tesla executive in 2007 as Atieva Inc., an EV battery and powertrain developer. It launched the Air in 2016, claiming in 2021 to hit a record 520 miles on a single charge.

The carmaker has joined others, including Tesla, in cutting prices of the Air as demand cools. Executives are betting that the upcoming Gravity will appeal to a wider audience and goose sales.

Shares in Lucid fell 2 percent to close at $3.02 on Friday.