By Akash Sriram and Abhirup Roy
(Reuters) -Lucid Group forecast higher capital expenditure this year and reiterated an annual production forecast below Wall Street targets on Monday amid slower-than-expected EV demand, sending its shares lower nearly 7% in extended trading.
“From a capex perspective, we are making enhancements first in our Arizona factory because we are going from 30,000 installed capacity to 90,000,” Gagan Dhingra, Lucid’s interim finance chief, told Reuters. He said capital was also being spent on building a factory in Saudi Arabia.
The company said it expects capital expenditure of $1.5 billion in 2024, up from $910.6 million last year.
Lucid said it was on track to produce 9,000 cars this year, compared to the 8,428 vehicles it made last year. Seven analysts polled by Visible Alpha, on average, expected the company to make 12,677 units in 2024.
“You need a business need for us to balance production with deliveries,” Lucid CEO Peter Rawlinson told Reuters. “Otherwise, if we just turn on the faucets and produce, then we’re left with a big inventory, which would be imprudent.”
Backed by Saudi Arabia’s Public Investment Fund, the firm is also set to start production of a more affordable mid-size car in late 2026 and its Gravity SUV this year, to attract a larger customer base.
“Lucid’s results were more of the same. Unsustainable margins, a high cash rate and no change to full-year production guidance. Not a lot of reason for optimism,” said Garrett Nelson, VP and senior equity analyst at CFRA Research.
The sovereign wealth fund, which has invested billions in Lucid, added another $1 billion to the EV maker’s balance sheet, giving the company more liquidity, underscoring a key advantage Lucid has among EV startups in the race for survival.
The company ended the first quarter with cash and cash equivalents of $2.17 billion, compared with $1.37 billion in the fourth quarter of last year.
Lucid had cut prices of its flagship Air sedans in February by as much as 10% to spur sales, as customers gravitate to less expensive gasoline-electric hybrid cars due to still-high interest rates.
Revenue for the first quarter was $172.7 million, topping analysts’ estimate of $156.99 million, according to LSEG data, while it reported a net loss of $684.76 million, narrower than a $779.5 million loss a year earlier.
(Reporting by Akash Sriram in Bengaluru and Abhirup Roy in San Francisco; Editing by Pooja Desai)