Lucid Hits Speed Bumps: Why Deliveries Missed the Mark and Analysts Are Concerned
Lucid missed Q3 deliveries by ~18%. Stock dropped >9%. Analysts downgraded to "strong sell" citing weak demand, cash burn, and high costs.
- Delivery Disappointment: Lucid (LCID) delivered 4,078 vehicles in the third quarter (Q3). While this marked the seventh straight quarterly delivery record for the luxury EV manufacturer, the figure was roughly 18% below what Wall Street analysts had estimated.
- Stock Reaction: Following the news of the weaker-than-expected deliveries, Lucid shares fell by more than 9% in Tuesday trading. This occurred during a quarter when other luxury EV competitors, like Rivian (RIVN), successfully sold thousands of vehicles leading up to the expiration of the US federal EV tax credit.
- Severe Analyst Downgrade: The disappointing delivery numbers were coupled with a lowered rating from CFRA, which dropped its recommendation from "sell" to "strong sell".
- Reasons for the Downgrade: CFRA analyst Garrett Nelson outlined several major concerns driving this pessimistic view. These include worries about Lucid's rapid cash burn rate, insufficient customer demand, intense competition in the EV market, and continued pricing pressures.
- Production Hurdles: A key issue is that Lucid is far from achieving the mass production rates required to meaningfully reduce its unit costs. Nelson argues that weak customer demand is a serious obstacle for the company.
- A Challenging Q4 Ahead: Lucid has maintained its full-year production guidance of 18,000 to 20,000 vehicles. To achieve even the low end of this range, the company must build more than 8,000 vehicles in the fourth quarter (Q4). This volume would require Q4 production growth of 137% compared to the same period last year.
- Price Target: Reflecting these challenges, CFRA set a price target for Lucid at $10, which represented a 55% drop below the stock's price at the time of the report.