Lucid beats quarterly deliveries estimate as price discounts boost demand
10:58 am Monday, October 07th, 2024
By Zaheer Kachwala
(Reuters) -Lucid Group beat market expectations for third-quarter deliveries on Monday, as discounts and cheaper financing options for its luxury electric vehicles boosted demand in an uncertain economy.
Shares of the company rose around 1.5%.
The company handed over 2,781 vehicles in the quarter ended Sept. 30, compared with estimates of 2,242 according to 8 analysts polled by Visible Alpha.
Consumer appetite for electric vehicles in the United States has been weakening due to high interest rates and the availability of cheaper hybrid alternatives.
EV firms such as Tesla, Rivian and Lucid have slashed prices and have been offering incentives like cheaper financing options to woo customers.
Lucid reported a sequential drop in production, manufacturing 1,805 vehicles in the third quarter, compared with 2,110 vehicles in the previous three months.
“We think Lucid will have its work cut out in Q4 to hit its 2024 production guidance of 9,000 units,” said Garrett Nelson, senior equity analyst at CFRA Research.
He added that Lucid’s costs were still “unsustainably” high and the company has been burning through cash.
In comparison, Rivian has been working to cut down on costs and streamline production as it looks to turn its first profit.
Lucid is also betting on its Gravity SUV, which is expected to go into production later this year, to drive growth but will compete with Tesla’s Model X and Rivian’s flagship R1 models.
Rivian cut its annual production forecast last week and missed estimates for quarterly deliveries, as weak demand was further compounded by a parts shortage, while market giant Tesla also reported disappointing delivery data.
The company said in August it received up to $1.5 billion in cash from its largest shareholder, Saudi Arabia’s Public Investment Fund, as it looks to ramp up production and introduce a mid-size car expected to roll out in late 2026.
(Reporting by Zaheer Kachwala in Bengaluru; Editing by Krishna Chandra Eluri)
