Starting a car company from scratch is no easy feat. Not only do you have to actually create the car but you need to establish some kind of dealership and/or service center network to ensure a vehicle reaches the hands of paying customers.

With the all-electric Air, Lucid Motors has produced what appears to be a superb luxury vehicle and to accompany it, the electric car manufacturer has started to establish a number of retail studios and service center locations across the United States. This clip provides us with a detailed tour of the company’s flagship studio, located in Beverly Hills.

Each Lucid Studio includes an Air that customers can check out in person to see if it is the right vehicle for them. In addition, every Studio will get a dedicated area focused on colors, materials, and finishes, helping customers configure the Air to their preferred specifications

Perhaps the coolest feature of Lucid’s studios is the virtual reality experience they offer. The company has constructed a basic mockup of the car’s interior that a customer can sit in. They then put on a pair of VR goggles and can step inside their dream Lucid Air, complete with all their chosen options and finishes.

Lucid is especially proud of the fact that, unlike many other car manufacturers, the vast majority of the Air’s parts have been developed in-house. This includes the battery pack, electric motors, and power electronics, so it’s little surprise that each studio also has an area where some of these technologies are displayed. The studios also include a merchandise area.

Lucid Group Inc. said it will sell as many as 100,000 electric vehicles to the Kingdom of Saudi Arabia over the next decade, ranking among the largest-ever purchases of plug-in models.

The automaker reached a deal with Saudi Arabia’s Ministry of Finance for 50,000 EVs over that span, with the option for another 50,000, according to a statement Tuesday. Lucid said it would start delivering the vehicles by the second quarter of 2023.

Saudi Arabia owns roughly 61 percent of Lucid through its sovereign wealth fund. Lucid recently started production of its first model, the Air sedan, at its factory in Casa Grande, Ariz., though it announced in February that it plans to build a second automotive factory in Saudi Arabia. The purchase agreement announced Tuesday is for the Air and other “future models.”

The deal initially calls for 1,000 to 2,000 EVs annually, increasing to between 4,000 and 7,000 annually starting in 2025.

Pricing terms weren't announced. The company statement said:

"The purchase price of the vehicles will be determined based on the lower of the standard retail price for the applicable vehicle in Saudi Arabia and the standard retail price for the applicable vehicle in the United States, plus the logistics and importation costs and other costs of delivering and homologating vehicles to regulations of Saudi Arabia."

Lucid Group is the latest automaker to up the price of its electric vehicles.

The company announced Thursday alongside its first-quarter earnings report that it was raising prices of the variants of its luxury Air sedan, beginning June 1. The price hikes push the base price of the Air sedan as much as 13%.

All existing reservation holders will not experience price hikes, the company said, noting that updated pricing for Canada will be made public on June 1. Considering that Lucid disclosed it has 30,000 reservations for the Air, it will be awhile before the company sees the benefit from these raised prices.

The Air Grand Touring will increase about $15,000 to a cost of $154,000; the Air Touring will cost $12,400 more at $107,400; and the Air Pure will go up $10,000, to $87,400. The Lucid Air Grand Touring Performance model, the price of which was announced two weeks ago, will remain the same at $179,000, the company said. All of these prices are for base models, so the final price tag could be much higher for customers.

Other automakers like Tesla and Rivian have announced similar increases in price for their electric vehicles, blaming ongoing supply chain issues from the pandemic and Russia's invasion of Ukraine, as well as inflation, for the rising costs from suppliers, which are now being passed on to the consumer. In Rivian's case, the company was initially going to raise prices for reservation holders as well, but quickly reversed that decision.

"Similar to many companies in our industry, we continue to face global supply chain and logistics challenges, including Covid-related factory shutdowns in China. We are working closely with our suppliers to mitigate the impact of disruptions," Sherry House, Lucid's CFO, said in a statement. "While any extended disruptions could result in an impact to our production forecast, today we are reiterating our 12,000-14,000 vehicle production forecast for 2022 based on the information we have at this point combined with our mitigation plans."

Lucid's guidance for deliveries remain unchanged, and the company said it still expects Air Grand Touring Performance deliveries in June, as well as Air Touring and Air Pure expected later this year. The Project Gravity SUV remains on target to begin production in the first half of 2024, according to Lucid's CEO and CTO Peter Rawlinson.

Last quarter, Lucid lowered its guidance from 20,000 units, a figure it promised in its Q3 earnings.

The EV startup said it is experiencing strong demand with more than 30,000 customer reservations as of today, which represents potential sales of $2.9 billion, the company said. Whether it will be able to keep up that demand with its current price jump is another question, but presumably those who are rich enough to buy a Lucid vehicle anyway will see an extra $12,000 as merely pocket change.

The company also noted that it recently signed a deal in which the government of Saudi Arabia committed to purchase up to 100,000 electric vehicles from Lucid over the next 10 years. This deal, which was announced last month, follows a loan agreement from the Saudi government that the companies entered into in late February, according to Lucid’s 10-Q filing with the Securities and Exchange Commission. The agreement commits Saudi Arabia to provide loans of up to $1.4 billion to Lucid, provided the government can reduce that availability of capital under certain circumstances.

Lucid Motors Q1 2022 financials

Lucid Motors closed out the quarter with $57.7 million in revenue, which the company says is driven mainly by customer deliveries of 360 vehicles over the three months ending on March 31. That is up massively from the $313,000 the company pulled in during the same quarter last year. It's also more than analysts' expectations of $53.43 million, according to Yahoo Finance estimates.

The company experienced a net loss of $81.3 million during the first quarter, an improvement on the loss of $748 million last year. According to a filing with the SEC, Lucid says it expects to continue to incur substantial losses and increasing expenses as it continues to equip and expand manufacturing facilities in Arizona and Saudi Arabia, develop and deploy charging partnerships and generally grow as a company. Lucid's balance sheet shows nearly $5.4 billion of cash on hand, which the company says is sufficient to fund operations well into 2023. That aligns with analyst expectations around easing of supply chain issues in the second half of the year, which will allow the company to ramp up production and potentially stick to its longer-term growth roadmap, including expanding its production line-up and overseas availability.

Despite a somewhat rosier outlook for future production, Lucid shares are down nearly 7% in after-hours trading, which is likely due to the vehicle price increases.

Legal updates

Lucid has also been dealing with a few lawsuits from investors who largely allege the company made false and misleading statements regarding the expected start of production for the Lucid Air, as well as an SEC probe regarding its SPAC merger with Churchill Capital Corp. IV and Atieva Inc.

A Thursday filing also revealed a more recent action against the company filed on April 1 by shareholder Victor Mangino based on similar allegations relating to statements updating projections and guidance provided in late 2021 to early 2022. The case is still ongoing.

Lucid Group has slashed its production forecast in half for this year, estimating it will manufacture between 6,000 and 7,000 Air electric sedans after a difficult second quarter caused by supply-chain issues.

It's the second time this year that the EV startup reduces its production forecast. The company entered the year with a forecast of 20,000 vehicles, then slashed it in late February to 12,000-14,000. Now, the company has cut that revised production forecast in half, with CEO Peter Rawlinson blaming the "extraordinary supply chain and logistics challenges" in the second quarter.

"Our revised production guidance reflects the extraordinary supply chain and logistics challenges we encountered. We've identified the primary bottlenecks, and we are taking appropriate measures – bringing our logistics operations in-house, adding key hires to the executive team, and restructuring our logistics and manufacturing organization."


The executive added that Lucid continues to see strong demand for its vehicles, citing over 37,000 customer reservations for the Air luxury sedan. Rawlinson said he remains confident that Lucid will "overcome these near-term challenges."

The EV startup's Q2 financial results announced yesterday also included delivery numbers, which almost doubled compared to the previous quarter: 679 vehicles delivered in Q2 versus 360 in Q1. The company produced 1,405 vehicles in the first half of the year.

The production numbers are far from impressive considering the 37,000 reservations Lucid claims it has. Still, we have to remember that Lucid's only product at the moment is the Air luxury sedan which starts just under $90,000 for the Pure trim and can cost as much as $180,000 for the Grand Touring Performance.

Lucid also said it ended the quarter with $4.6 billion in cash, cash equivalents and investments, which is expected to fund the company "well into 2023." The company's Q2 revenue was just $97.3 million, well below analysts' expectations.

In addition to its Q2 financial results, the EV startup also announced yesterday the appointment of Steven David as senior vice president of operations, which is a new role in the company. David will oversee the supply chain, logistics, manufacturing and quality, Lucid said in a statement. The executive most recently worked as head of component operations at Stellantis in Auburn Hills, Michigan.

Lucid Air production and customer deliveries are improving each quarter and recently reached a four-digit level for the very first time.

Lucid Group announced that, during the third quarter, production more than tripled to 2,282 units (compared to about 700 units in Q2 and nearly 700 units in Q1). That's a new record and a positive sign after the recent cut forecasts.

In terms of Lucid Air deliveries, the number is also a record high at 1,398. It means that, so far this year, the company delivered 2,437, while the cumulative number exceeds 2,500.

All numbers are preliminary, but we don't expect any significant changes in the Q3 2022 financial report, which will be released on November 8.

Lucid Air deliveries - Q3 2022

Over 2,500 cars in customers' hands during the first four quarters is not a bad result, but of course, far lower than initially anticipated.

This is more proof that the introduction and manufacturing of an all-new product is a very challenging endeavor, especially when we are talking also about an all-new company, new plant and a pretty spectacular product with a range of 500 miles (800 km).

Lucid says that the recent results are in line with the company's expectations and that is "on track to deliver on its previously provided 6,000 to 7,000 vehicle production guidance for full year 2022."

Well, considering that some 3,687 Lucid Air were produced in the first three quarters (if we are not mistaken in calculations), then about 2,313-3,313 would have to be produced in Q4 to achieve the target. That seems doable. Q4 should also become a new record quarter with probably 2,000+ deliveries.

For reference, Rivian which started production and deliveries at a similar time as Lucid, in Q3 produced 7,363 and delivered 6,584 EVs (three types, but most likely mostly Rivian R1T pickups).

Lucid, in August reported that has more than 37,000 reservations for the Air model (all versions), which means a queue counted in years rather than months, but maybe it will improve once the production rate increases.

As the auto industry pivots toward electrification, the cost to produce electric vehicles remains high as compared to internal-combustion counterparts, a result of growing material costs and new manufacturing processes. That cost is baked into the retail price of every EV on the market today, with legacy manufacturers hoping to recoup costs from early adopters willing to pay upmarket prices. Startup EV manufacturers are largely betting on a different demographic: the affluent but anti-Tesla buyer. Or, in other words, a Lucid Air owner.

There can only be so many $100,000 EVs out there, and Lucid Motors jumped onto the electric luxury performance bandwagon a few years too late. At least that's what it seems like, as the California-based EV manufacturer continues to move slowly through its backlog of 34,000 orders. Slow enough that the company appears hungry for cash now, as it offers discounts to customers who previously abandoned their orders.Specifically, Lucid sent an email to customers with lapsed orders saying the company would reinstate these orders at the original legacy pricing of $139,000 for the Lucid Air Grand Touring, according to Barrons. That's a 10% discount from the current pricing of $154,000. This same email claims that reinstated orders could be completed in a few weeks, as the company works to complete 7000 orders by the end of the year. For reference, Lucid had delivered less than 4000 units through the end of September.

It's not just customers that the company is trying to keep. In fact, the brand has started an employee-purchase program, in which employees will receive an $18,000 discount on the Air Grand Touring model. If the purchasing employee is able to take delivery prior to Dec. 31, Lucid will inject an additional $500 every pay period until the total amount reaches $18,000, according to Business Insider.

Despite the slower-than-projected delivery rate, Lucid's sales have been trending in the right direction, as the company website now features delivery-ready models. Incentivizing less choosy customers by offering a subsidized 2.81% annual interest rate through in-house financing isn't too shabby either. With average car loan rates trending toward double digits, this straight-up low rate would amount to paying $15,000 less in interest.

In spite of this, it remains to be seen how many people truly have $150,000 to spare on a luxury EV, with overall economic and auto market trends indicating these customers are rare. While stock prices have fallen 54% in the last six months and the company is on track to burn through billions of production dollars, the true indicator of a positive investment from a consumer standpoint is the market value of the model.

Used sales on auction sites like Bring A Trailer show 2022 model-year Lucids with less than 500 miles selling for $118,000, while another identical unit with only 200 miles sold for $124,500. In other words, both sold for significantly less than the model costs coming out of the dealership.

As the company continues ramping up production at its Casa Grande, Arizona, factory and construction begins at its Saudi Arabia plant, the rate of deliveries should grow exponentially, increasing revenue by $3.2 billion, according to the company's estimates. That number hinges on Lucid maintaining or adding to its 34,000 current orders, and the addition of advertisements on Instagram signals that Lucid is eager to do just that.

However, in a high-priced market dominated by Tesla, competitors are constantly in an uphill battle. As manufacturers work to make EVs more accessible, the price of Lucid's Air sedan and the incoming Gravity SUV could make these models even more of an outlier in the future.

The Lucid Air started its career with LG Energy Solution cells in the 2170 cylindrical form factor. That’s the same one Tesla and Panasonic created for the Model 3. On the other hand, LGES pouch cells were what the Hyundai Kona Electric and Chevrolet Bolt EV had when they started facing spontaneous fires. How all these things fit together in Lucid’s decision to buy cells from Panasonic Energy is something only the EV maker can answer.
27 photos

What both companies decided to share is that the Lucid Air and the Lucid Gravity will have Panasonic cells. Initially, they will be made in Japan, but Lucid will start buying them from Panasonic’s new factory in De Soto, Kansas. The EV maker did not say if it will still purchase cells from LGES, but the announcement suggests that will not happen anymore.

Apart from the issues the Korean supplier faced with Hyundai and GM, Lucid may have decided to go with Panasonic to ensure it will produce all the cars it has committed to manufacturing in the next few years.

The EV maker has failed to meet its original production targets twice this year. First, it said it would make 20,000 in 2022. In February, it reduced that number to something between 12,000 and 14,000 EVs. When Lucid realized in August that this would still be unattainable, it cut that goal in half: 6,000 to 7,000 Air units in 2022. It is not clear how battery supply influenced that decision, but the new deal also makes us wonder if Lucid’s manufacturing hurdles could have to do with that.

The construction of the new Panasonic Energy factory in De Soto started in November 2022, but it is only expected to begin production by March 2025. That said, Lucid’s vehicles will start using Japanese cells. LGES has one independent battery factory in the U.S., more specifically in Holland, Michigan. However, it makes pouch cells there, which leads us to believe the cylindrical cells for the Lucid Air come from abroad. LGES planned to build one factory in Queen Creek, Arizona, but it said in December that it is reviewing the decision due to rising material costs. That may also have influenced Lucid’s decision to select a new supplier. Again, only Lucid could clarify that.

Elon Musk used to bash Bob Lutz for saying Tesla would eventually go bankrupt. Ironically, he plays the same tune for Rivian and Lucid, saying that they will ultimately break and that Lucid is “not long for this world.” What he doesn’t seem to realize is that both startups have a financial backup Tesla never had. In Lucid’s case, it comes from Saudi Arabia's Public Investment Fund (PIF), which invested $915 million more in the company on December 22.
7 photos

The deal only became public after Lucid filed a Form 4 with the U.S. Securities and Exchange Commission (SEC) on December 27. According to the document, PIF bought 85,712,679 Lucid shares at an average price of $10.6752 per share. That led the Saudi Arabian sovereign wealth fund to reach 1.1 billion Lucid shares. PIF is the majority stakeholder at the EV maker, which makes it more than just an investor: It owns most of the company. If you think Saudi Arabia will let Lucid go under, forget it.

Lucid knows it will take a while to reach profitability. In a presentation released in February 2021, the company said it would only achieve free cash flow in 2025. It even calculated how much it would be: $321 million, with $1.5 billion in 2026. Getting there would depend on three products: Air, Gravity (the SUV), and a new vehicle to be introduced in 2025. In its first full year of sales, it should be Lucid’s second best-selling vehicle, second only to the Gravity.

Achieving these goals may be more complicated than the company previously thought. We have already reported the several flaws the Lucid Air is presenting in its first batches despite the company’s promises of a flawless vehicle. Many of these problems are very similar to those presented by Tesla, not only in its early stages but to this day. Lucid could have learned from these mistakes.

If the current Lucid team fails to fix the issues and deliver on its objectives, it is easier to imagine Saudi Arabia demanding new executives than letting it go bankrupt. The country’s rulers are dead serious about wanting to become a relevant player in the automotive industry – ironically, with vehicles that do not burn the oil that made them rich. Lucid is not their only shot at getting there. In November, Crown prince Mohammed bin Salman announced Ceer, a Saudi Arabian company with licensed BMW parts and manufacturing from Foxconn.

Although money will not be a problem for either of these car startups, being associated with Saudi Arabia may impose a heavy reputation cost. The U.S. Central Intelligence Agency (CIA) concluded that Bin Salman ordered the assassination of the exiled Saudi journalist Jamal Khashoggi in 2018. The journalist went to the Saudi consulate in Istanbul to obtain documents for his marriage and never left. Lucid and Ceer will have to distance themselves from this background as much as possible or count on selective or weak memory to sell as many cars as they need to walk on their own feet.

When Tesla announced massive price cuts in January, we figured EV startups like Lucid would be the most affected. Lucid has now announced a restructuring plan that involves laying off 18% of its workforce, or around 1,300 people. The move is meant to cut costs as the EV startup struggles to ramp production.

EV startups are in for a tough 2023 as raising new capital becomes more difficult, and production challenges mean young companies are burning through their cash reserves. Establishing a positive cash flow in the automotive industry is even more difficult, considering the huge investments needed to ramp production. Lucid had to learn this the hard way and is now in a very difficult situation.

Lucid announced on Tuesday that it would lay off 18% of its workforce, or around 1,300 employees, affecting nearly every company level. The details of the restructuring plan will be discussed over the next three days, as CEO Peter Rawlinson revealed in a letter to employees. The company expects to incur costs between $24 million and $30 million in compensations by the end of the second quarter when the plan will be complete.

According to Rawlinson’s letter, Lucid wants to cut costs by reviewing “all non-critical spending.” It’s unclear whether he sees its employees as non-critical or more cuts in other areas are expected. The laid-off employees would be offered severance packages including “access to career resources, healthcare coverage continuation, and acceleration of equity,” according to a memo reviewed by Insider.

The layoffs mark another setback for the company that produced around 7,200 vehicles last year but only found buyers for 4,400 of them. Both numbers are disappointing, considering that Lucid wanted to produce 20,000 vehicles in 2022. The production capacity is much larger, at 34,000 cars per year. Lucid also disappointed investors with the 2023 guidance for 10,000 to 14,000 cars. It looks like the company has a bigger problem with demand, as analysts saw a major drop in orders during the fourth quarter of 2022.

Lucid was among the more promising EV startups, but its main product, the Air sedan, is utterly expensive at a time when Tesla is slashing prices like there’s no tomorrow. Tesla can certainly afford that, thanks to the fat margins of its automotive business, making the Model S more desirable. At the same time, it made Lucid Air far less attractive, and many reservation holders have canceled their orders as a result.

A picture taken on Monday at Lucid’s factory in Casa Grande reveals hundreds of cars sitting in a holding lot. Lucid delayed its most affordable version of the Air sedan, which would be more competitively priced to the Model S, at $87,400. Currently, the cheapest Lucid Air is the Pure version with AWD and some upgrades, at $97,700. The most affordable Model S starts at $89,990, making the Lucid Air a tough sale.

Lucid posted terrifying first-quarter losses, worrying investors that their money would get wiped out in a few quarters. Still, Lucid's biggest investor, Saudi Arabia's Private Investment Fund (PIF), seems unfazed by the EV startup's lackluster performance. The Saudis have bigger plans and seem willing to support Lucid for as long as it takes to see their dreams come true.

Lucid was, next to Rivian, the most promising EV startup, with credible chances to challenge Tesla in the luxury car market. Still, the two companies followed very different paths. Rivian seems on track to become profitable, with a clear vision and enough resources to accomplish its goals. On the other hand, Lucid is burning through its last cash reserves, with the production line barely moving and vehicles that nobody wants to buy cluttering the inventory.

It's not like Lucid doesn't have a compelling product. The Lucid Air is still the most efficient electric vehicle on the market, thanks to its advanced drive units and aerodynamics. It also achieved the most impressive EPA range rating, with 520 miles (840 km). This is significantly more than the 300-mile average American drivers consider appropriate for an electric vehicle. Still, despite all these qualities, the Lucid Air is not selling.

The main reason is its price, which starts at $92,900 for the more affordable Pure variant. Its archrival Tesla Model S starts at a more reasonable $88,490, and even this is a hard sell. Lucid also plans an $87,400 version of the Air Pure, but it's not yet available to order. The market conditions are worsening, and people are reconsidering their priorities, favoring more affordable vehicles. It's no wonder Lucid posted such disappointing financial results in the first quarter.

Perhaps more worrying than the $780 million net loss is the lack of any sign of improvement. Lucid's losses keep widening while its cash reserves deplete. All this time, Lucid relies on its biggest investor, the Saudi Arabia Private Invest Fund (PIF), to finance its operations. According to a Reuters report, PIF has invested about $3.6 billion in Lucid since 2018. A PIF-owned company loaned Lucid $266 million in March and about the same amount in April. Besides that, the government-owned Saudi Industrial Development Fund also loaned the company $1.4 billion in 2022.

As you can see, Lucid is living on life support, and the only question is when the Saudis will disconnect it from the machines. PIF is the biggest Lucid shareholder, owning more than 60 percent of the company's shares. In turn, Lucid represents PIF's largest US investment, as the Saudis bet big on the EV startup. Withdrawing from that would not only mean writing off tons of money but also admitting to a failed strategy. The move would also deal a blow to Crown Prince Mohammed bin Salman's plans to diversify away from oil revenues.

For the Saudis, Lucid is not just an investment, it's the spearhead of a strategic plan to build the local EV industry. Under the plan, Lucid will build a manufacturing plant in the kingdom to turn it into an EV powerhouse. Perhaps this also contributed to Lucid's downfall, as the EV startup concentrated on building an expensive vehicle with a limited market in the US. Saudis wanted something glamorous, and that's what they've got.

The new plant in Jeddah will build 155,000 cars per year at its maximum capacity. Local media reported that the construction got underway last year. During the Q1 earnings call, Lucid confirmed that the first vehicles would be assembled starting in September. The factory is instrumental to Saudi's plans and the main reason PIF kept the stake in Lucid despite bleak prospects. PIF intended to take Lucid private and make it its crown jewel. Until all hope is lost, Lucid will soldier on, despite monumental losses.

Lucid Motors is opening its second manufacturing facility on Wednesday in the Middle Eastern country. The brand is partially owned by Saudi Arabia's Public Investment Fund (PIF), which controls over 60% of the company. Now, the EV maker will produce the Air and other zero-tailpipe emission models halfway across the globe. Here's the gist of it.

Lucid is based in Newark, California, and has a plant in Casa Grande, Arizona. It currently manufactures just one vehicle – the Air sedan, which also happens to be one of the fastest all-electric vehicles money can buy today. The tri-motor Air Sapphire puts out up to 1,234 hp and 1,430 lb-ft of torque.

Lucid also plans to officially introduce its first SUV in November. The Gravity has been spotted on public roads numerous times, and it could be the car that helps the brand get back on track. Currently, it struggles with sales because of the economic conditions and the state of CCS-enabled high-power charging infrastructure.

However, from now on, Lucid isn't just an all-American brand that relies mostly on the US and Canada for its success. The company is officially opening its second factory today. It's located in King Abdullah Economic City, Saudi Arabia. "A shared vision for a sustainable future" is the motto that announces the automaker's expansion.

Construction started last year in May. Now, the brand is ready to kick off production of the Air and other upcoming models like the Gravity. The facility covers an area of around 14.5 million sqft.

Initially, the plant will have just one production line. The automaker expects to reach full manufacturing capacity in 2028. That's when 155,000 EVs per year will come out of the factory.

Almost everything Lucid will make in Saudi Arabia will be exported to neighboring countries, southeast Asia, and Africa. The list could expand as time goes by.

Lucid already sells the Air in Europe but sends US-made cars over the pond. It could shift its strategy if freight from Saudi Arabia is cheaper.

The AMP-2 plant, as it is named locally, also has a visitor center. That hints at a possible special delivery program for customers to pick up their EVs straight from the factory.

Lucid's agreement with the Saudi Arabian government also includes the obligation to hire mostly locals, which could boost the economy in the area and help form new communities. The process has already begun, and the brand is looking for sales associates, product specialists, IT engineers, parts experts, vehicle technicians, accountants, and service technicians.

Lucid CEO Peter Rawlinson will make the official announcement later today. The executive arrived in Saudi Arabia around two days ago, per reports coming from company insiders.

Lucid's expansion to Saudi Arabia might also help the country develop its homegrown auto brand, Ceer.