Lucid Destruction Continues As It Cuts Prices

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The EV business has fallen apart with remarkable speed. While sales have flattened in the US, they fell in Europe from December to January. Even Tesla, which posted an increase of 35% in sales in 2023 to 1.81 million, said it expected this year to be less spectacular.

EV Trouble —Ford’s Sales Problem

EV Prices —Too Expensive In France

A few small EV companies in the US are in great trouble. Among them is Lucid, which trades as a penny stock at $3.70, down 86% in two years. To deepen its financial hole, it cut prices recently, which is an acknowledgment that EV sales in the future will need to rely on lower price points.

According to The Wall Street Journal, on Thursday, “Lucid cut the starting price of its Air sedan by 10%, to $69,900, the second reduction for the vehicle in two months.” The $70,000 price point is still too high. Ford CEO Jim Farley said price sensitivity was hurting industry sales earlier in the week. Ford cannot afford to lose $3.5 billion on EVs as it will this year. But, the loss will not put Ford out of business. It will only take a few more quarters of losses for Lucid to be gone.

Lucid’s problems, and Ford’s, could be worse if Chinese companies bring sub-$20,000 EVs to the US. This may happen if one or more can manufacture their vehicles in Mexico and use that as a backdoor to attack the US market. The Administration has used incentives to slow the sales of cars with Chinese batteries. Consumer demand for cheap EVs means that is not a permanent solution,

Lucid delivered 1,457 cars in the third quarter. It posted revenue of $138 million compared to $195 million in the same quarter the year before. It lost $631 million compared to a $531 million loss in the year-ago period. This is against the backdrop of cars with price points ranging from $70,000 to $249,000. Management ruined Lucid the moment it decided on those prices.

Lucid, price cuts or not, won’t survive.