Speculation Lucid's Q1 2024 Results Analysis

[Batteryman]

I get that, but Lucid had zero other models to offer other than the highest priced Airs. Tesla has plenty of other cars that cost a lot less that outsell the CT 500-1, so they aren’t missing those sales. Lucid misses everyone that doesn’t want to spend $100k+ on a car from a new manufacturer with iffy prospects. So the early adopters will pay up - but there aren’t enough of them (clearly) choosing Lucid. CT had I think 1 million + reservations. I would agree if Lucid started shooting the lights out when they lowered prices and offered Pure at sub 70k - but where are the sales?

You forget COVID, supply chain, high interest rates EV politics….its easy sitting on your sofa sipping coffee making comments on forums, is it not?

Peter said midsize is where the volume is. Air and Gravity are to show technology, create buzz, get partnerships…..

 

[Batteryman]

I never said anything about whether to come out with the Luxury model first (or not). Those were your words, not mine.

I have no interest in debating you.

Time will tell....to quote the late Robin Williams, "Reality! What a concept!". Reality will be upon us in 2025!

Future growth is NOT Gravity dependent, go look at what Peter said- it’s the mid-size….coming in 2026, already being designed.

 

[Knucklehead]

You forget COVID, supply chain, high interest rates EV politics….its easy sitting on your sofa sipping coffee making comments on forums, is it not?

Peter said midsize is where the volume is. Air and Gravity are to show technology, create buzz, get partnerships…..

Strategy is irrelevant if they can't generate cash by producing cars. If every car produced causes them to burn cash, no strategy will save them. Even deep oil pockets.

 

[xponents]

Strategy is irrelevant if they can't generate cash by producing cars. If every car produced causes them to burn cash, no strategy will save them. Even deep oil pockets.

That per car loss is a hugely misleading figure, if that is what you are referring to. I am 99.9 percent sure that the cars itself make a profit, but the method people use to get these numbers involves dividing the total loss by the amount of cars made. This is misleading as it does not account for development and other expenses.

 

[Lucken]

I get that, but Lucid had zero other models to offer other than the highest priced Airs. Tesla has plenty of other cars that cost a lot less that outsell the CT 500-1, so they aren’t missing those sales. Lucid misses everyone that doesn’t want to spend $100k+ on a car from a new manufacturer with iffy prospects. So the early adopters will pay up - but there aren’t enough of them (clearly) choosing Lucid. CT had I think 1 million + reservations. I would agree if Lucid started shooting the lights out when they lowered prices and offered Pure at sub 70k - but where are the sales?

Hmm, so how is it that I spent considerably less than that on my AWD Pure?

 

[Batteryman]

Future growth is NOT Gravity dependent, go look at what Peter said- it’s the mid-size….coming in 2026, already being designed.

You do understand all that cash burn is factories, tooling , development? These costs come down rapidly once established.

Only reason to go bankrupt is if you can’t get funding, cash burn is irrelevant.

 

[xponents]

Hmm, so how is it that I spent considerably less than that on my AWD Pure?

Wait, are you telling me that there are Airs cheaper than 169k?? Sacrilege!!

 

[joec]

I don’t know why people still get confused about this. Lucid has no intention of selling in volume until midsize. This was the stated plan from day one.

You can’t sell millions of cars, however, without infrastructure. So you build the infrastructure. Put a few lower volume vehicles into production to learn, set up the factory, set up the sales and service team, and on and on.

It’s a capital-intensive business. Profits come much later.

Peter stated from the get go that the market for Gravity is roughly 6x the Air. So do the math. Gravity will at best sell six times what Air did. But probably less, because Lucid doesn’t live in a vacuum and no one gets 100% of the market.

This is all planned and accounted for. The folks at the PIF funding Lucid know this is the plan and have factored it into their long-term thinking. If they didn’t like the plan, they would have had Peter fired by now.

The only people who seem to not get it are here on the forum, claiming “doom” every quarter when Lucid isn’t suddenly outselling Tesla.

 

[xponents]

I don’t know why people still get confused about this. Lucid has no intention of selling in volume until midsize. This was the stated plan from day one.

You can’t sell millions of cars, however, without infrastructure. So you build the infrastructure. Put a few lower volume vehicles into production to learn, set up the factory, set up the sales and service team, and on and on.

It’s a capital-intensive business. Profits come much later.

Peter stated from the get go that the market for Gravity is roughly 6x the Air. So do the math. Gravity will at best sell six times what Air did. But probably less, because Lucid doesn’t live in a vacuum and no one gets 100% of the market.

This is all planned and accounted for. The folks at the PIF funding Lucid know this is the plan and have factored it into their long-term thinking. If they didn’t like the plan, they would have had Peter fired by now.

The only people who seem to not get it are here on the forum, claiming “doom” every quarter when Lucid isn’t suddenly outselling Tesla.

(And ironically, while the Air is continuing to grow in sales, the Model S is declining. Tesla sold 13k Model S/X's last quarter, and a favorable extrapolation would mean about 6k Model S's sold.)

 

[BS8899]

I don’t know why people still get confused about this. Lucid has no intention of selling in volume until midsize. This was the stated plan from day one.

You can’t sell millions of cars, however, without infrastructure. So you build the infrastructure. Put a few lower volume vehicles into production to learn, set up the factory, set up the sales and service team, and on and on.

It’s a capital-intensive business. Profits come much later.

Peter stated from the get go that the market for Gravity is roughly 6x the Air. So do the math. Gravity will at best sell six times what Air did. But probably less, because Lucid doesn’t live in a vacuum and no one gets 100% of the market.

This is all planned and accounted for. The folks at the PIF funding Lucid know this is the plan and have factored it into their long-term thinking. If they didn’t like the plan, they would have had Peter fired by now.

The only people who seem to not get it are here on the forum, claiming “doom” every quarter when Lucid isn’t suddenly outselling Tesla.

To sanity check these numbers:
> if Gravity were to be selling 6X of the Air's volume, using 2023 numbers, that means Gravity would be selling 36,000+ vehicles before the mid-size arrives.
> R1S sold ~25,000 units in 2023. That means 1.5X of the R1S 2023 volume.

I don’t know why people still get confused about this. Lucid has no intention of selling in volume until midsize. This was the stated plan from day one.

You can’t sell millions of cars, however, without infrastructure. So you build the infrastructure. Put a few lower volume vehicles into production to learn, set up the factory, set up the sales and service team, and on and on.

It’s a capital-intensive business. Profits come much later.

Peter stated from the get go that the market for Gravity is roughly 6x the Air. So do the math. Gravity will at best sell six times what Air did. But probably less, because Lucid doesn’t live in a vacuum and no one gets 100% of the market.

This is all planned and accounted for. The folks at the PIF funding Lucid know this is the plan and have factored it into their long-term thinking. If they didn’t like the plan, they would have had Peter fired by now.

The only people who seem to not get it are here on the forum, claiming “doom” every quarter when Lucid isn’t suddenly outselling Tesla.

Can we sanity check the numbers:

> if Rawlinson said he expects Gravity to be 6X of the Air, (using 2023 numbers) that would be ~36,000+ unis per year
> in 2023, ~25,000 units of R1S were sold

That would mean Gravity would own the entire 7 seater EV SUV market before the mid-size arrives? Perhaps the TAM of the 7 seater SUV might grow some in the coming 2-3 years. Nevertheless, this is a tall order!

> meanwhile, the R2/R3 will arrive in 2026. The mid-size is probably the volume market for SUVs.

I am NOT suggesting the Gravity has no appeal. I DO THINK Gravity will appeal to some EV SUV buyers.

But the underlying assumptions baffle me. Please help us understand.

 

[hydbob]

To sanity check these numbers:
> if Gravity were to be selling 6X of the Air's volume, using 2023 numbers, that means Gravity would be selling 36,000+ vehicles before the mid-size arrives.
> R1S sold ~25,000 units in 2023. That means 1.5X of the R1S 2023 volume.

Can we sanity check the numbers:

> if Rawlinson said he expects Gravity to be 6X of the Air, (using 2023 numbers) that would be ~36,000+ unis per year
> in 2023, ~25,000 units of R1S were sold

That would mean Gravity would own the entire 7 seater EV SUV market before the mid-size arrives? Perhaps the TAM of the 7 seater SUV might grow some in the coming 2-3 years. Nevertheless, this is a tall order!

> meanwhile, the R2/R3 will arrive in 2026. The mid-size is probably the volume market for SUVs.

I am NOT suggesting the Gravity has no appeal. I DO THINK Gravity will appeal to some EV SUV buyers.

But the underlying assumptions baffle me. Please help us understand.

The number you are missing is the conversion of ICE to EV for 7 seat SUV buyers. No one knows what it will be, hence projections are projections.

 

[BS8899]

The number you are missing is the conversion of ICE to EV for 7 seat SUV buyers. No one knows what it will be, hence projections are projections.

OK, double the numbers of the TAM assuming massive conversion of ICE 7 seater SUVs to EV SUVs. That still means Gravity will be 60-70% of the TAM!
Is that relaistic?!

 

[joec]

To sanity check these numbers:
> if Gravity were to be selling 6X of the Air's volume, using 2023 numbers, that means Gravity would be selling 36,000+ vehicles before the mid-size arrives.
> R1S sold ~25,000 units in 2023. That means 1.5X of the R1S 2023 volume.

Can we sanity check the numbers:

> if Rawlinson said he expects Gravity to be 6X of the Air, (using 2023 numbers) that would be ~36,000+ unis per year
> in 2023, ~25,000 units of R1S were sold

That would mean Gravity would own the entire 7 seater EV SUV market before the mid-size arrives? Perhaps the TAM of the 7 seater SUV might grow some in the coming 2-3 years. Nevertheless, this is a tall order!

> meanwhile, the R2/R3 will arrive in 2026. The mid-size is probably the volume market for SUVs.

I am NOT suggesting the Gravity has no appeal. I DO THINK Gravity will appeal to some EV SUV buyers.

But the underlying assumptions baffle me. Please help us understand.

Start by reading what I wrote.

The addressable market is 6x the size of the market for the Air. Gravity will not get 100% of that market. No one would reasonably expect that. Because no one has ever gotten that.

Peter is simply trying to set the expectation so that people stop crying when Lucid isn’t selling 100,000 or 1,000,000 vehicles per year. He’s saying, the most Gravity would possibly sell, in fantasy land, would be 6x the Air.

Personally, I think they’ll be thrilled to roughly triple their sales with Gravity. That is, continue to sell Air (which is growing) and then sell twice as many Gravity on top of that. Should be plenty to take them to the midsize. And should be achievable, given how many more Americans want an SUV over a sedan.

Lucid does not have to beat Rivian at anything in order to succeed. They don’t have to beat Tesla. There are still plenty of customers to go around.

 

[Batteryman]

OK, double the numbers of the TAM assuming massive conversion of ICE 7 seater SUVs to EV SUVs. That still means Gravity will be 60-70% of the TAM!
Is that relaistic?!

TAM being x6 doesn't mean sales will be x6. We just have to wait and see. Maybe EV negativity will improve, or many potential Tesla Model X would be buyers are waiting for a Gravity like EV. One thing is for sure, Model S and Model X days are done.....unless a major redesign by Tesla. I know of a few people who refuse to buy the Model X, felt the Rivian R1S design wasn't to their liking and are eagerly waiting for the Gravity.

Check this out....

 

[BS8899]

Start by reading what I wrote.

The addressable market is 6x the size of the market for the Air. Gravity will not get 100% of that market. No one would reasonably expect that. Because no one has ever gotten that.

Peter is simply trying to set the expectation so that people stop crying when Lucid isn’t selling 100,000 or 1,000,000 vehicles per year. He’s saying, the most Gravity would possibly sell, in fantasy land, would be 6x the Air.

Personally, I think they’ll be thrilled to roughly triple their sales with Gravity. That is, continue to sell Air (which is growing) and then sell twice as many Gravity on top of that. Should be plenty to take them to the midsize. And should be achievable, given how many more Americans want an SUV over a sedan.

Lucid does not have to beat Rivian at anything in order to succeed. They don’t have to beat Tesla. There are still plenty of customers to go around.

OK, I agree that the ADDRESSEABLE 7 seater SUV market is considerably larger than Air's market. I also agree there will be some ICE 7-seater SUV conversions.

In effect, the R1S is testing this very theory today!
How much can we convert the ICE SUV market to EV SUV is most likely a question of infrastructure and economics. A significant percentage of these ICE SUVs are sold outside of the US/Europe. In these markets, charging infrastructures are lagging.

Thus far, Rivian is the dominant player in this field. At an average cost of ~$80,000 per R1S, to convert ICE SUVs, you are going up against an average ASP of $40,000-$60,000.

There will be some conversions. But the accessible TAM is quite a bit smaller than the raw numbers. The environment will likely be more favorable with the mid size.

 

[scal_air]

Rivian is the "dominant" player is a small electric SUV market that Lucid has yet to enter. Per the sales numbers, the "dominant" R1S had sales of about 25K and you find it inconceivable that the Gravity could surpass those numbers... In 2023, for sales of SUVs in the US alone, the number 20 in volume was the Lexus RX at 115K units. And that's the 20th best seller - https://www.carpro.com/blog/top-20-suvs-sold-in-america-of-all-sizes-in-2023
I don't know how many ICE conversions we'll see - I'm thinking that the CEO's estimate might be optimistic but it's certainly better than my arm chair guess and the number does not seem implausible. Here's something to think about, maybe ICE SUV drivers didn't like the R1S range of 321 miles but will be happier with Gravity range of 440. With over 8 million SUVs sold in 2023, a small fraction of conversions would meet the goal.

Initially I was interested in this topic but it seems to have gotten astray into a Lucid vs Rivian debate...

 

[Buffalo Bob]

Does Lucid want their stock price to skyrocket overnight? Just needs a one-line press release... "Lucid announces plans to develop the first AI-EV". Doesn't have to actually do it. Plans to will be enough.

 

[scal_air]

Does Lucid want their stock price to skyrocket overnight? Just needs a one-line press release... "Lucid announces plans to develop the first AI-EV". Doesn't have to actually do it. Plans to do it will be enough.

Lol, yes throw in partnership with Nvidia somewhere too! Of course another CEO will immediately threaten to sue you because AI cars was his idea

 

[Buffalo Bob]

Lol, yes throw in partnership with Nvidia somewhere too! Of course another CEO will immediately threaten to sue you because AI cars was his idea

Nice touch! For good measure, let's toss in that DDP will not only drive you to and from dinner... It will select the finest restaurant for you, and pick up the bar tab.

 

[BS8899]

Rivian is the "dominant" player is a small electric SUV market that Lucid has yet to enter. Per the sales numbers, the "dominant" R1S had sales of about 25K and you find it inconceivable that the Gravity could surpass those numbers... In 2023, for sales of SUVs in the US alone, the number 20 in volume was the Lexus RX at 115K units. And that's the 20th best seller - https://www.carpro.com/blog/top-20-suvs-sold-in-america-of-all-sizes-in-2023
I don't know how many ICE conversions we'll see - I'm thinking that the CEO's estimate might be optimistic but it's certainly better than my arm chair guess and the number does not seem implausible. Here's something to think about, maybe ICE SUV drivers didn't like the R1S range of 321 miles but will be happier with Gravity range of 440. With over 8 million SUVs sold in 2023, a small fraction of conversions would meet the goal.

Initially I was interested in this topic but it seems to have gotten astray into a Lucid vs Rivian debate...

Yes, in terms of SUVs, most of the Japanese and Korean players are in the 100k units/yr range. However, these numbers include both 5 and 7 passenger SUVs. And the ASP on these ICE SUVs are between $40,000 to $60,000. I used to own a Lexus RX450h, the top-of-the-line RX when I bought it (2017 Model). I trade it in for my R1S.

The Lexus RX is an excellent vehicle. I had ZERO problem with in in my 6 years of ownership. It had 360 degree view, HA, Adaptive Cruise, etc. etc.. Pretty much what my 2012 Lucid Air has today! No, it didn't have FSD!

To make the ICE to EV SUV conversion en mass, the economic gap needs to be narrowed. That, I think is what Rivian is focusing on. As mentioned by others, Rivian is switching to internally designed drive trains, streamlining wiring harnesses to reduce weight and cost, squeezing out more efficiencies "a-tenth-of-a-kWh" at a time, etc.. That said, you've also seen Rivian went from long-reservation and delivery times to now you can shop online for inventory vehicles that can be delivered within 1 week. If indeed there is a massive conversion from ICE SUVs to EV SUVs because it is so darn compelling and the cost difference be damned, Rivian will still be flooded with back orders.

I don't think there is any mystery here. It is economics. EV conversion needs to get much closer to existing ICE offerings before we see the conversion momentum. Again, "Reality, what a concept!"