How much should we worry about Lucid's financial position?

[digiboxer]

I have the "luxury" of 4--6 months before I decide to put $1K at risk..not a huge deal...but 2-4 months later, there will be the decision to write a $100k check to get the car. I think it's only prudent at that time to take stock: Will Lucid be a going concern at that point?

On the conf call last week the CFO implied they have enough cash to get well into 2023, and then will need to raise more capital. But:

Interest raise are rising
Mnfg costs are soaring
The stock price is crashing
Production numbers are disappointing
Units are being delivered that require what must be over-budget warranty work
Legacy competitors will introduce more and more attractive alternatives (ie I just drove the BMW iX and would buy it today if the front end weren't to butt ugly

No, I'm not a Tesla troll, or a LCID short-seller. But if the company can't get funding to stay viable, and service my car---I'll own a $100k door stop.

Still not the end of the world...but one of the reasons I can afford a $100k+ car is that I assessed risks along the way

 

[CLTGT]

Having the Saudis as your largest shareholder is probably a good thing for them right now. I do not see them walking away any time soon. Believe me, given the delays I have experienced with my car, the poor communication, the lack of new Service Center announcements, the software issues and the number of repairs to newly delivered vehicles requiring a trip back to service, if I thought I had to add a material financial worry to the mix, I probably wouldn’t still be bothered waiting for my car. I understand your concern though and it a very valid one Given the rate they are burning through cash.

 

[HC_79]

The Bank of Saudi Arabia is probably a good thing to have in your back pocket at the moment. They seem heavily invested to see Lucid succeed.

Regardless though, all these new EV companies aren’t going to survive. There are too many new companies coming out along with the traditional automakers they the market simply isn’t going to be big enough to sustain them all. So yes, some are going to fail for sure. Will it be Lucid? Time will tell but the fact they’ve actually got cars getting into customers hands is a huge milestone in itself. They’ve also got a VERY efficient EV and one of the smallest motors on the market. The fact it’s all vertically integrated puts them in a really good position over its competition.

 

[Grnr92663]

I have the "luxury" of 4--6 months before I decide to put $1K at risk..not a huge deal...but 2-4 months later, there will be the decision to write a $100k check to get the car. I think it's only prudent at that time to take stock: Will Lucid be a going concern at that point?

On the conf call last week the CFO implied they have enough cash to get well into 2023, and then will need to raise more capital. But:

Interest raise are rising
Mnfg costs are soaring
The stock price is crashing
Production numbers are disappointing
Units are being delivered that require what must be over-budget warranty work
Legacy competitors will introduce more and more attractive alternatives (ie I just drove the BMW iX and would buy it today if the front end weren't to butt ugly

No, I'm not a Tesla troll, or a LCID short-seller. But if the company can't get funding to stay viable, and service my car---I'll own a $100k door stop.

Still not the end of the world...but one of the reasons I can afford a $100k+ car is that I assessed risks along the way

With the way oil price goes, the Saudi is just getting richer and richer. Marketcap of Aramco increased $900B YTD (just passed Apple!), and that's just one of the investments that the Saidi own. Financing Lucid is unlikely a problem for them.

Moreover, from the last earning call, seems like Lucid has $5.4B cash reserved, and another $3.54 credit line from the Saudi banks, along with the incentives covered to open up another plant there.

Lucid Group, Inc. (LCID) CEO Peter Rawlinson on Q1 2022 Results - Earnings Call Transcript

Lucid Group, Inc. (NASDAQ:NASDAQ:LCID) Q1 2022 Earnings Conference Call May 5, 2022 5:30 PM ETCompany ParticipantsMaynard Um - Senior Director, Investor...

seekingalpha.com

Just as the Chinese bailed out NIO & BYD on its their days, the US kept Tesla alive on its last week of funding, the Saudi will make sure Lucid survives. Good for long term financial gain & good for the economy.

 

[digiboxer]

I found this WSJ article from about 10 months ago when LCID shares began trading. The first trading day closed at $27--today it's under $14. However, that still values the Saudi holding at $14BB, and their cost basis is $2.9BB. However, their willingness to add substantial new capital will depend on their assessment in the future of the validity of the business proposition, and management's ability to execute.

BTW be sure to watch the video imbedded in the WSJ piece (which might have been posted here before I began following)

 

[digiboxer]

Oooops---

Lucid Motors Shares Rise 11% in First Trading Day After SPAC Merger

The electric-vehicle startup is the latest company in the sector to consummate a blank-check merger.

www.wsj.com

 

[Slam08]

Lucid has some tech patents like a really efficient drivetrain compared to Tesla.

And the wunderbox charging which maybe one day can power the house without an expensive transformer install.

That higher efficiency and charging is how lucid sells 300 miles in 20 min.

Lucid is different from other EV startups. They have been building batteries for years and then developed technology that they realized gave them an advantage and are trying to capitalize on it.

They aren’t just someone taking parts from everyone else and putting it together. They aren’t just selling and idea or image.

Does this mean they will succeed? Who knows. Many better technologies lost the consumer wars because of poor advertising.