Lucid Group Inc’s shares <LCID.O> slumped over 14% in early trading on Thursday after the electric vehicle maker’s 2023 production targets came in below estimates amid waning demand and a price war unleashed by market leader Tesla Inc (TSLA.O).
The company expects to produce 10,000 to 14,000 luxury electric vehicles this year, below analysts’ estimates of 21,815 cars, according to Visible Alpha. Fourth-quarter orders also slumped.
Aggressive price cuts by Tesla and Ford Motor Co (F.N) have made it harder for loss-making rivals such as Rivian Automotive Inc (RIVN.O) and Lucid to gain market share as consumers tighten their purse strings.
BofA Global Research downgraded Lucid to “neutral” from “buy”, saying it could take until 2027 for the company to break even on operating and free cash flow basis, compared with the brokerage’s earlier expectation of 2026.
“Lucid’s earnings sadly show that it’s a business that’s in the public markets earlier than it should be,” said Will McDonough, chief executive at asset manager EMG Advisors.
“Now that the markets are less fluid, investors are focused on the fact that this company only produced 7,000 cars in 2022.”
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