LCID 2021 Q4 Earnings

[hydbob]

It is interesting that Peter made this comment

“The simple fact is that manufacturing, ensuring the quality of our product is right, is too precious, too critical, an activity to entrust to a third party,” he told investors. “We have to control our own destiny.”

Yet, what has caught them out with the delays? a part from a 3rd party....... It's kind of embarrassing for all the promises he made and couldn't even secure quality parts for 520 vehicles.

His statement actually embodies why there are delays in deliveries. No manufacturer does everything in house. You HAVE to rely on third parties to produce parts for your car, but what you can control is whether or not those parts make it into your car. They got parts, decided it wasn't up to their quality control and had to wait. That sounds EXACTLY like controlling the quality of their product.

 

[MidwestLucidDude]

Lucid's own press release states that the "limited run" is 520 vehicles, so it would be pretty bold for them to change that.

Announcing final details of the limited production Lucid Air Dream Edition.

There were luxury cars, then EVs, and now there’s Lucid — the new generation of luxury electric.

www.lucidmotors.com

Besides @Jon_Rettinger there's at least 3-4 more of us on this forum that have said they upgraded from AGT reservations, so there were a decent number of cancellations.

Yes, I've read that and it is good to share. Thank you. But that press release says, "we’re increasing total production of the fully-reserved Dream Edition to 520 vehicles." It does not say they are limiting production to 520 vehicles. There is no implied guarantee in that statement and if they increased it once, as they say in this statement, do you think they would not increase it again?

 

[CLTGT]

They are not changing that number, too much risk.

As for the other numbers, deliveries and production, the market knows about what they are (that they missed) and have already baked it into the price, IMO. Any surprises from the call might make the stock move, but not making 577 won't.

 

[hmp10]

My question is since we all know “approx” what the delivery numbers are for 2021, don’t Wall Street analysts know this? Wouldn’t you expect the stock to be lower than it already is? Plus it seems there’s no way they can sell 20,000 cars this year. We all expect I think a lowering of forecast.

Savvy analysts and investors will look at Lucid's delivery record in the context of what's going on in the industry.

Rivian has lagged further behind in its deliveries than Lucid. Tesla has finally admitted that the Cybertruck and the Roadster won't make it to production this year. (Remember that Tesla took $250K and $50K deposits for Roadsters way back in 2017.) Mercedes originally announced start of EQS deliveries for the fall of 2021 and missed that goal. The Nissan Ariya has been endlessly delayed. Even the inventory storage lots of many legacy brand dealers are almost empty due to a paucity of cars coming out of factories relative to demand.

There is nothing unusual, suspicious, or nefarious in Lucid's delivery misses thus far.

 

[hydbob]

Yes, I've read that and it is good to share. Thank you. But that press release says, "we’re increasing total production of the fully-reserved Dream Edition to 520 vehicles." It does not say they are limiting production to 520 vehicles. There is no implied guarantee in that statement and if they increased it once, as they say in this statement, do you think they would not increase it again?

They can, but shouldn't. We will see.

 

[hmp10]

Yes, I've read that and it is good to share. Thank you. But that press release says, "we’re increasing total production of the fully-reserved Dream Edition to 520 vehicles." It does not say they are limiting production to 520 vehicles. There is no implied guarantee in that statement and if they increased it once, as they say in this statement, do you think they would not increase it again?

Part of the price premium Lucid is getting for the Dream Edition rides on its being a limited-production version with power output not available elsewhere in the lineup at present, and I'm sure Lucid understands that very clearly.

Besides not seeming to understand the market dynamics of limited-production price strategy, you are also overlooking the fact that Lucid has a tri-motor car in the wings, the sales of which it would not want to cannibalize by keeping the Dream in production closer to the launch date of the tri-motor Air.

 

[hydbob]

Part of the price premium Lucid is getting for the Dream Edition rides on its being a limited-production version with power output not available elsewhere in the lineup at present, and I'm sure Lucid understands that very clearly.

Besides not seeming to understand the market dynamics of limited-production price strategy, you are also overlooking the fact that Lucid has a tri-motor car in the wings, the sales of which it would not want to cannibalize by keeping the Dream in production closer to the launch date of the tri-motor Air.

Yea, why sell more Dream, when you can sell the Tri-Motor limited run at 250k each instead? Like I said in another post, Lucid would do well to get a tri-motor roadster into production before the Tesla Roadster

 

[idiot900]

I would expect lawsuits from current DE owners if they sell more than 520. It was announced as a limited edition to a specific number.

Not a lawyer, but this is really a cause of action? And what $ number would the damages possibly be, and is the expected recovery enough to justify hiring a law firm? And if you are in the market for a $170k car, isn't your time too valuable to spend dealing with something like this?

But maybe I have too much faith in humanity...

 

[Paladin732]

Not a lawyer, but this is really a cause of action? And what $ number would the damages possibly be, and is the expected recovery enough to justify hiring a law firm? And if you are in the market for a $170k car, isn't your time too valuable to spend dealing with something like this?

But maybe I have too much faith in humanity...

At a minimum? The price difference between a GT and a Dream. I would absolutely be pursuing action if that happened. I bought 1 of 520, not 1 of 600 or 1 of 1,040.

You are under-estimating the resources of some of the purchasers, and you are also underestimating the damage to a new brands reputation to go and change a limited edition run quantity.

 

[hydbob]

At a minimum? The price difference between a GT and a Dream. I would absolutely be pursuing action if that happened. I bought 1 of 520, not 1 of 600 or 1 of 1,040.

You are under-estimating the resources of some of the purchasers, and you are also underestimating the damage to a new brands reputation to go and change a limited edition run quantity.

Yea, maybe not the full price difference, but I would be requesting a "refund" of sorts. Wonder if this could be considered false advertising?

 

[borski]

They promised the owners that already bought them it would be 520 and no more. They can't do that without getting sued for lost value (ie: my car is no longer as valuable as it was as now there are 600 of them vs just 520)

Yea I would be very pissed. Part of the additional premium was the limited edition production.

 

[CLTGT]

I guarantee you there is at least one attorney in that 520 or multiple purchasers who the attorneys' fees are not an issue. It becomes a matter of principal.

 

[borski]

They increased production of the Dream once before. They could do it again. I've looked on the Lucid website and the Q3 2021 report. Can't find any statement that they'll limit to only 520.

That was before they had produced and delivered a car, so people could still make the choice to cancel or downgrade based on less exclusivity. Post-deliveries, this would be awful PR.

 

[Sandvinsd]

Since #458 is being delivered this week, it sounds like the speculation that Lucid will say “All the Dreams have been delivered and we have started delivering the GTs” may have some merit.

 

[MidwestLucidDude]

Part of the price premium Lucid is getting for the Dream Edition rides on its being a limited-production version with power output not available elsewhere in the lineup at present, and I'm sure Lucid understands that very clearly.

Besides not seeming to understand the market dynamics of limited-production price strategy, you are also overlooking the fact that Lucid has a tri-motor car in the wings, the sales of which it would not want to cannibalize by keeping the Dream in production closer to the launch date of the tri-motor Air.

Hum, I understand limited production. If you look at most limited edition high-end cars, they are limited to around 100 units and they sell for insanely high prices...$250,000 and up. The Dream Edition is not really a limited edition car in that sense of the word. Yes, there is the tri-motor version talked about sometime down the road, but what they're making now are the Dream Editions. While the assembly line is running with those, pumping out a few hunderd more is easy, just keep the line going, and still keeps it limited under 1,000. When they're done making them they won't make any more. That is what limited edition really means.

 

[MidwestLucidDude]

12 million is a drop in the bucket if investors lose confidence that the company philosophy isn't aligned with what they are saying to the public.

Lose confidence? Hardly. I'm sure that if Lucid announces on their quarterly call that demand for their $169,000 Dream Edition was high so they decided to make a few hundred more, the market is going to react very positive to that. Especially if they confirm that they'll still make 20,000 cars in 2022. I can read the news already...."This just in, Lucid is making more of their $169,000 Dream Edition because of high demand and Lucid stock is responding postive to the demand for their car"....people will look for the nearest Lucid Studio to see what all the buzz is about. I doubt any company has ever taken a hit for high demand of their top-of-the line product, and no one will cancel their AGT order because they might have to wait three more months. What else are the going to buy? Dealer lots are almost empty.

 

[MidwestLucidDude]

His statement actually embodies why there are delays in deliveries. No manufacturer does everything in house. You HAVE to rely on third parties to produce parts for your car, but what you can control is whether or not those parts make it into your car. They got parts, decided it wasn't up to their quality control and had to wait. That sounds EXACTLY like controlling the quality of their product.

I think you may have misunderstood what Peter Rawlinson said, they do all the engineering in-house like Tesla, then they contract out to manufactures to build components to their specs. This is different than buying an "off the shelf" part that a manufacturer makes for any car company who wants to buy it. Since Lucid designs the entire car, everything made for it is under their control meaning that part can't be made for anyone else unless Lucid licenses it. Only Tesla does it the same way. Lucid is clear they get materials and parts from several places. Their battery is from LG. This is nothing new.

 

[dawktah LucidGT]

I guess it depends to how aggressively Wall Street follows forums, Facebook etc. All the news about Lucid on the internet seems to be positive with awards, accolades, etc and the issues seem to be a very closely guarded secret and hidden well. I wouldn't be surprised to see the price tank on the earnings call based on the missed deliveries and re-forecasting the yearly but I could be wrong.

The stock at one point was over $55, closed today at $28.83

 

[mnewber1]

I believe that once deliveries or production numbers are reported the stock will dip into the teens. Once AMP-2 and 3 are finished and production gets to where we'd like it to be, that number could go as high as $65 this year. Who knows what we will see this month, however, Bear's Workshop seems to think they made more than 520 DEs.

 

[hydbob]

Lose confidence? Hardly. I'm sure that if Lucid announces on their quarterly call that demand for their $169,000 Dream Edition was high so they decided to make a few hundred more, the market is going to react very positive to that. Especially if they confirm that they'll still make 20,000 cars in 2022. I can read the news already...."This just in, Lucid is making more of their $169,000 Dream Edition because of high demand and Lucid stock is responding postive to the demand for their car"....people will look for the nearest Lucid Studio to see what all the buzz is about. I doubt any company has ever taken a hit for high demand of their top-of-the line product, and no one will cancel their AGT order because they might have to wait three more months. What else are the going to buy? Dealer lots are almost empty.

Companies don't take a hit for the demand, they take the hit when they don't follow through on what they say. It would be stupid for them to announce they are making more Dream editions for sale.