Get 40% Off
🚀 Our AI Picked 6 Stocks that Jumped +25% in Q1. Which Picks Will Soar in Q2?Unlock full list

Lucid to start deliveries of electric cars with range exceeding Tesla's in October

Published 09/28/2021, 04:33 PM
Updated 09/29/2021, 09:33 AM
© Reuters. A Lucid Air electric vehicle is displayed at a shopping mall in Scottsdale, Arizona, U.S., September 27, 2021. REUTERS/Hyunjoo Jin

By Hyunjoo Jin

CASA GRANDE, Ariz. (Reuters) - U.S. startup Lucid Group Inc said on Tuesday it will start delivering luxury electric sedans with a Tesla-beating driving range in late October, posing a major challenge to the market leader whose sales of premium models have stagnated.

The California-based Lucid began production of its long-delayed Lucid Air cars at its Arizona factory on Tuesday, and said it aims to ramp plant's capacity up to 90,000 vehicles per annum in the next two years.

The top-end Lucid Air Dream Edition will be available in late October, followed by less expensive models: Grand Touring, Touring and Air Pure. The company said it has received more than 13,000 reservations for Lucid Air models, and it has increased the planned total production of the Lucid Air Dream Edition to 520 vehicles.

A version of the Lucid Air Dream Edition, priced at $169,000, received an official U.S. government rating of a 520-mile (837 km) driving range, over 100 miles more than its closest rival, Tesla (NASDAQ:TSLA)'s Model S, which is priced at $89,990. The higher range helped lead to a 23% jump in Lucid's shares this month.

Speaking at the production site, Lucid Chief Executive Officer Peter Rawlinson, a former chief engineer on the Tesla Model S, said his company's cars have an advantage in battery technology and costs over the Model S.

"We've ridden customers of the fear of range anxiety," he said. "The next big obstacle is cost effectiveness of electric cars. We've got to get the cost down."

He said the Air Pure, the least expensive version with a price tag of $77,400, will go into production late next year.

EXECUTION CHALLENGE

The company, founded in 2007, received funding from Saudi Arabia's Public Investment Fund in 2018 before going public via a shell company https://www.reuters.com/article/us-lucidmotors-m-a-churchill-cap-iv-excl/exclusive-lucid-motors-nears-spac-deal-as-klein-launches-financing-sources-idUSKBN2AG2D6 in July.

"(20)17 and (20)18 were brutal. The company was in a parlous state. And then I've got to say, we met a perfect partner," he said.

Rawlinson, who left Tesla in 2012, faces tasks similar to those of Tesla in its early days, including how to address manufacturing challenges and scale up production.

"I think the big challenge for Lucid will be execution," said Sam Abuelsamid, a principal analyst at Guidehouse Insights. "I think that they have a very good car. It's very attractive."

Tesla CEO Elon Musk said in June that Tesla has canceled its plan to launch a Model S Plaid+, with a target driving range of 520 miles, saying the Model S Plaid itself is "just so good" https://www.reuters.com/business/autos-transportation/tesla-launch-high-end-model-s-plaid-fend-off-mercedes-porsche-2021-06-10.

Musk reiterated this month that "production is hard".

"Production with positive cash flow is extremely hard," he said, citing carmakers' razor-thin margins.

Tesla's combined sales of Model S and Model X luxury models stood at only 1,890 in the second quarter of this year, down from 22,300 during the same period three years ago. Tesla does not break out figures for the two high-end models.

"The Model S doesn't look fundamentally different from a Model S nine years ago," Abuelsamid said. "In the premium market, customers are looking for the latest and greatest."

© Reuters. People test drive Dream Edition P and Dream Edition R electric vehicles at the Lucid Motors plant in Casa Grande, Arizona, U.S. September 28, 2021.  REUTERS/Caitlin O'Hara

Musk in October 2020 cut the price of its Model S, shortly after Lucid announced the pricing of its base model. "The gauntlet has been thrown down! The prophecy will be fulfilled," he tweeted at that time.

Electric vehicle maker Rivian, backed by Amazon.com Inc (NASDAQ:AMZN) and now preparing for a public stock listing, earlier this month started production of electric pickup trucks. That move came ahead of similar expected moves by Tesla, General Motors Co (NYSE:GM) and Ford Motor (NYSE:F) Co.

Latest comments

OK good, a Lamborghini toledo has better performance than the Toyota corolla. then tell me why Toyota is the number one selling car of cars all time🤦‍♀️ ?
I still dont know why the FUD pushers don’t understand Lucid is a competitor to Mecedes, not Tesla. Lucid is a luxury class vehichle, Tesla isnt in that market.
It's all about the performance and the price.......🙃🙃
wake me up in ten years when any of this is worthwhile to take into consideration .
You'll probably turn into oil in 10 years.
byebye musk.
Thanks but no thanks.  They are coming out with a car at the time when there is a historic electricity shortages.
rather burn gas than pay 50 bucks a month to run a lightbulb in my house
So you would rather pay hundreds of dollars on gas per month, than 50 bucks a month?
50 bucks per light bulb....there is not enough electricity on the world wide grid to support electric vehicles currently which would mean insane rates for electricity
What's the price tag? I rather pump old fashion gas .
Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.