Lucid posts quarterly revenue beat as luxury EV sedan price cuts boost sales

[HC_79]

They’re losing $300k + per car sold - not sure how anyone thinks volume will solve this problem. It’s like the old SNL skit about the change makers - swapping dollars for dimes, etc, and thinking they are making money through volume. Lucid stock isn’t going anywhere if they are not able to sell 10x the # of cars sold last quarter with costs waaaaayyy less than what they are now - otherwise the bleeding will eventually drain the patient. Doesn’t matter how great the car is - even the Saudis won’t let this formula go on forever. If they lose money on every Gravity sold it won’t be good.

Don’t believe everything you read online. Building factories, R&D, Service Centers, Retail footprint doesn’t come free you know! What does this footprint do? It’s sets Lucid up for the future with all the capital outlay happening now being rewarded in future.

People need to learn the basic principles of business and understanding CapEx vs OpEx instead of drinking the kool-aid and constant misinformation about this stupid calculation online.

 

[Adnillien]

People who want to seriously understand how Lucid is doing will try to estimate the marginal cost for producing one mar car. A simple way to do this is to remove depreciation and inventory impairment from the gross margin on each car sold. In fact, one analyst asked about this during the Q&A yesterday. What changed the trend in Q1 of this year is a really good question. I would ignore Q4-21 and Q1-22 in the chart below. Even though Q1 is down from Q4, the overall trend is pretty good. Even with a 9k production plan, Lucid is very close to breakeven for marginal cost versus selling price.

The other thing to look at is operating cash flow. This is skewed by heavy R&D cost to bring Gravity and meet legal approvals to sell it by the end of the year. Again, ignore Q4-21. Given where Gravity is in development, reasonable people can argue if the trend is good or not. I lean toward it being an OK trend that may get slightly worse in Q2 and Q3.

 

[Andretex]

I think the numbers improved and look promising. Based on my rough estimate, Lucid needs to get to about 50,000 cars sold per year for the financials to look decent. They may still lose money at that point but profitability will be something we can estimate at that point. I think in 2026 when Gravity is selling well and the new Model 3 competitor is launched, we will see some good financial results. Be patient, these losses are part of the process.

 

[Neurio]

Model 3 competitor

Model Y competitor. All information published so far suggests the midsize will be a crossover, including the recent articles from those who got to see the clay models under cover.

 

[Chizle]

People who want to seriously understand how Lucid is doing will try to estimate the marginal cost for producing one mar car. A simple way to do this is to remove depreciation and inventory impairment from the gross margin on each car sold. In fact, one analyst asked about this during the Q&A yesterday. What changed the trend in Q1 of this year is a really good question. I would ignore Q4-21 and Q1-22 in the chart below. Even though Q1 is down from Q4, the overall trend is pretty good. Even with a 9k production plan, Lucid is very close to breakeven for marginal cost versus selling price.

We should also back out the stock-based compensation.
This seems reasonable considering that the short investors purport the value is much less.

The improved trend is probably a result of prior period finished inventory write-downs. (Q4 2023)

 

[Leftlane]

Those of you who don’t like the metric act as if the buildings etc don’t cost real money that has to be accounted for. When your only revenue stream is from the sale of cars (aside from a little money from Aston), yet your expenses are from many different areas, the only way to get profitable is to sell a sh** ton of cars. Of course it doesn’t really cost X + 300k to build the actual car, but the debits have to be offset by the credits and they are nowhere near that, and slashing prices to try to get market share isn’t helping. It will take a looonng time to amortize all the startup costs unless the # of units is way higher - until then it’s crazy to expect a return on the stock. Yes, intentional loss is okay for a while - but it can’t be until infinity. They aren’t immune from basic economic principles just because the cars are nice. Still gotta figure out a way to sell more than 2k a quarter. And I would argue almost no one knows anything about Lucid at all.

 

[Batteryman]

They’re losing $300k + per car sold - not sure how anyone thinks volume will solve this problem. It’s like the old SNL skit about the change makers - swapping dollars for dimes, etc, and thinking they are making money through volume. Lucid stock isn’t going anywhere if they are not able to sell 10x the # of cars sold last quarter with costs waaaaayyy less than what they are now - otherwise the bleeding will eventually drain the patient. Doesn’t matter how great the car is - even the Saudis won’t let this formula go on forever. If they lose money on every Gravity sold it won’t be good.

I disagree, Saudi want Lucid to manufacture in Saudi, diversification. They want these jobs for their citizens. And anyone who thinks a new car company will be profitable within 5 years should not be commenting about company finances.

You think Lucid will be profitable with the Gravity? That would be the midsize that will really increase sales and earnings. The mere fact that you think Gravity should make them profitable shows how much you don’t know.

 

[Leftlane]

Not sure how you interpreted anything I said that way, but okay. Doesn’t really matter what any of us think anyway. The market is pretty efficient.

 

[Batteryman]

Not sure how you interpreted anything I said that way, but okay. Doesn’t really matter what any of us think anyway. The market is pretty efficient.

If you are investing in Lucid, you need to be patient to hold for at least another 5 years. If you don’t have the patience, don’t invest. Simple really. Car manufacturing is cost heavy, it’s not like making a iPhone. You invest now, for R and D, tooling, factories, showrooms, service centers. These fixed costs won’t exist forever. When your volume increases, you reap the benefits. With the present EV negativity, this will take 2-3 years longer than expected. If it was that easy to make a profitable car company, you would have seen many more come up during this transition to EV technology.

Investing needs patience and understanding. Now if you are a trader, yes I would be pissed I bought Lucid stock. I’m an investor and holding a long time, so don’t care right now, I have trust in Peter and his team.

 

[Chizle]

I find it nonsensical to dismiss anyone's point with "nobody knows anything" to follow up with a claim that "The market is efficient."
We've seen enough to argue that the market can often be emotional and erratic. Highly efficient markets require more perfect information, but deception is everywhere.

 

[Chrry]

They’re losing $300k + per car sold - not sure how anyone thinks volume will solve this problem. It’s like the old SNL skit about the change makers - swapping dollars for dimes, etc, and thinking they are making money through volume. Lucid stock isn’t going anywhere if they are not able to sell 10x the # of cars sold last quarter with costs waaaaayyy less than what they are now - otherwise the bleeding will eventually drain the patient. Doesn’t matter how great the car is - even the Saudis won’t let this formula go on forever. If they lose money on every Gravity sold it won’t be good.

Getting more cars sold…. Best advertisement out there. Takes money to make money so them losing so much will be an advantage in the long run. Soooooooo many people have never heard of Luci and I don’t like that

 

[Batteryman]

I find it nonsensical to dismiss anyone's point with "nobody knows anything" to follow up with a claim that "The market is efficient."
We've seen enough to argue that the market can often be emotional and erratic. Highly efficient markets require more perfect information, but deception is everywhere.

Agree, look at Rivian’s IPO- valued at about 60 billion without producing a single car. That wasn’t even a SPAC. Of course, not to mention Tesla’s present day valuation that is still absurd despite it dropping significantly. Markets are are very often nonsensical.

 

[Tesla2Lucid]

Although it seems like a generally good step in terms of earnings, Mike Bell leaving is almost tragic. Does anybody know of possible reasons?

I concur & tho $LCID-bull long term, am concerned for his departure "effective immediately" despite a few months of consulting.
Also, why is he still listed on their website as a VP?

Michael Bell

Profile of Michael Bell

lucidmotors.com

 

[borski]

I concur & tho $LCID-bull long term, am concerned for his departure "effective immediately" despite a few months of consulting.
Also, why is he still listed on their website as a VP?

Michael Bell

Profile of Michael Bell

lucidmotors.com

It’s been like 48 hours lol - I’m sure they’ll update it soon.

 

[MJAir23TheGoat]

If it’s anything like the car updates could be a long wait before it’s removed/updated lol

 

[Tesla2Lucid]

It’s been like 48 hours lol - I’m sure they’ll update it soon.

I'm smiling when I write this but actually been 5 days and pretty sure they have some techy people over there who can do that immediately IMHO

 

[scal_air]

Well considering it took 12 years after the debut of the first Roadster in 2008 before Tesla turned a profit, im not really hair on fire about Lucid still losing money not yet three years into production.

I admit that I have shares originating from the SPAC - and that does hurt. But I'm still bullish on long term prospects and adding more shares on dips.

 

[HariK]

It’s been like 48 hours lol - I’m sure they’ll update it soon.

And this is weekend.

 

[HariK]

Well considering it took 12 years after the debut of the first Roadster in 2008 before Tesla turned a profit, im not really hair on fire about Lucid still losing money not yet three years into production.

I admit that I have shares originating from the SPAC - and that does hurt. But I'm still bullish on long term prospects and adding more shares on dips.

Also tesla was profitable partly due to the energy credits.

 

[scal_air]

Also tesla was profitable partly due to the energy credits.

Agreed. Take all of Tesla's expenditures from 2008-2012 and then divide that by 2500. What was the "cost" per car? In the context of early R&D and production, those kind of numbers are only meaniful if it's an "apples to apples" comparison, right?