After struggling last year to ramp up production at its Arizona factory, Lucid Motors finally had some positive manufacturing news this month. The electric vehicle startup met its 2022 production estimate after cutting its forecast twice.
Output for the pricey Air sedan was modest — just 7,180 cars over 12 months, Lucid said. But the milestone marked a small victory for a company that's been burning through cash as it grapples with supply issues and growing pains.
Lucid now faces pricing pressures as interest rates rise, the economy slows and more EV competitors emerge. And rival Tesla has taken the radical step of slashing its prices by as much as $13,000 to maintain its growth momentum.
Lucid's 2022 vehicle deliveries of 4,369 sharply lagged production numbers for the Air, which launched in 2021 starting at $170,500 including shipping. The automaker reported in November that customer reservations fell to 34,000 in the third quarter from 37,000 in the second, as cancellations outpaced new preorders.
"It's taken them too long to scale up production," said Loren McDonald, CEO of analysis and consulting firm EVAdoption. McDonald had put down a $300 refundable deposit on the most inexpensive trim of the Air, the under-$90,000 Pure, which Lucid prioritized last for production. McDonald instead replaced his Tesla sedan with a Tesla crossover.
"The bulk of the reservations were probably for the Pure, and then people just couldn't wait any longer," said McDonald. "I really like that company and want them to do well. I love that car, but I'm not going to spend $160,000."
Lucid had originally forecast 2022 production of 20,000. It also raised Air prices last year amid rising costs.
A small number of Air Pure deliveries began in late December, barely meeting Lucid's 2022 self-imposed deadline to introduce the base trim. This year, it plans to launch the $250,000 Air Sapphire, a trim-topping performance version.