Please critique my piece in Barron's

blalpert

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I just wrote about some issues discussed here. I beg you to point out errors. Good journalists care about quality control in their work.

Bill Alpert
[email protected]

Lucid’s High-End EV Is Drawing Safety Complaints. Another Problem for the Stock?​


By
Bill Alpert


Updated Nov. 18, 2022 9:35 am ET / Original Nov. 18, 2022 1:00 am ET
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The Lucid Air, the object of safety complaints, goes for as much as $179,000. Assembling a prototype at company headquarters in Newark, Calif.​

David Paul Morris/Bloomberg
Lucid Group has carved a niche in the luxury end of the electric-vehicle market, with $150,000 sedans that offer the best power, range, and aerodynamics of any car produced. Owners fill online forums with delighted reports of long trips and snapshots of their beautiful, streamlined “Luci.”
The forums and government websites also show dozens of complaints of serious product defects. A year after Lucid (ticker: LCID) started delivering its sole product—the Lucid Air sedan—owners’ forums feature dozens of reports from people who say the cars drove forward when in reverse gear, or lost all power in the middle of the road, to become what one owner called a “5,000 pound brick.” Federal auto-safety regulators have received six complaints of power loss or gear malfunction from Lucid owners since mid-September.
Car-safety experts say the volume of complaints to the forums and to the government are significant for a company that has shipped about 2,500 of its high-price cars through September.
A power blackout in traffic could spell trouble. “If you’re broken down on the interstate where you don’t have room to pull over and get out of traffic, it’s only a matter of time before something bad happens,” says Michael Brooks, the executive director of the nonprofit Center for Auto Safety. He believes that the federal government’s National Highway Traffic Safety Administration, or NHTSA, should investigate the Lucid power-loss complaints.
Lucid didn’t respond to several weeks of queries from Barron’s regarding the problems reported by Air owners. Self-described owners report that the company has replaced failed batteries and electrical components as incidents occur.Barron’s was unsuccessful in attempts to reach several writers who posted complaints on forums. The car-safety experts we consulted found the comments credible.
If the complaints become widely known among prospective buyers, it could affect Lucid’s order book—and orders are a key factor for its stock. At $11.30, the shares are down 80% from their year-ago peak, as the Newark, Calif.–based firm repeatedly cut its production forecast and reported that its order backlog shrank in the September quarter because of cancellations. With September’s 8% sequential drop, to 34,000 cars on order, the number is going in reverse.
The Lucid Air does have a lot going for it. When reviewers test-drove units last year, they raved over the power, range, and luxury—all of which rated higher than those of the top-end Model S from Tesla TSLA –2.48% (TSLA). The $179,000 version of the Air boasts a top range of 520 miles per charge and the highest horsepower of any production car in the world.
User forums, however, are filled with reports of software bugs affecting displays, assisted driving, and charging. Some two dozen writers on the independent social platform Lucidowners.com report a more serious problem: Their new Lucid Airs lost power abruptly—sometimes in busy traffic.
“My plan was a glowing review with a few minor niggles,” said a Lucidowners.com post in September. “Unfortunately, the car was towed to the service center in Riviera Beach last night after it stopped driving in the middle of a six-lane road here in S FL with no warning or error codes.”
Six Lucid owners have reported their power-loss problems on NHTSA’s website. “It seems like this is an obvious safety problem and something that NHTSA needs to look into quickly, before someone stalls and gets themselves killed,” says Brooks of the Center for Auto Safety. His organization has spent five decades securing the passage of lemon laws and the recall of millions of cars prone to exploding gas tanks or air bags.
The National Traffic and Motor Vehicle Safety Act doesn’t require many incidents to trigger a recall of a potentially unsafe product. When Lucid issued a voluntary recall for a faulty suspension part in February, it estimated that the component had gone into just 1% of the 203 cars it produced.
Courts have held that anything more than a “de minimis” number of failure incidents can be enough to oblige a safety recall, says Coleman Sachs, a compliance consultant who retired recently after 33 years as a NHTSA attorney and enforcement manager. While Sachs wouldn’t give an opinion on the merits of the complaints on the owners’ forum and NHTSA’s website, he says that their apparent number, in the dozens, seems more than a de minimis proportion of all 2,500 cars produced.
The complaints come as Lucid is facing a safety-related whistle-blower lawsuit filed in June in a California state court. In the suit, Lucid’s former manager of safety recall, Raul Guzman, alleges he was unjustly fired after telling CEO Peter Rawlinson that he believed Lucid was underreporting various defects to federal regulators. The suit doesn’t mention power loss or gear problems. Lucid and Guzman’s lawyers didn’t respond to requests for comment.
NHTSA wouldn’t discuss whether it was looking into the complaints of Lucid owners. A spokesperson said the agency is committed to ensuring the safety of vehicles on America’s roads and “closely monitors consumer complaints, data, and other resources of information to identify potential defect trends.”
Production problems, safety investigations, and recalls aren’t unusual in the auto industry.
“Tesla’s Model S launch was not without its trials and tribulations,” notes Cory Steuben, president of the auto engineering consultants Munro & Associates. But today’s crowded EV market allows Lucid less margin for error than when Tesla launched a decade ago, says Steuben. Lucid must compete against an ever-growing range of EV alternatives from luxury producers like Mercedes-Benz (MBGYY), BMW (BMWYY), Audi, and its parent Porsche (POAHY).
The crowd of well-capitalized competitors in the premium EV niche is a key reason that Morgan Stanley analyst Adam Jonas has a sell rating on Lucid stock. He thinks the stock is worth no more than $10—and if Lucid continues to struggle with production volumes, as little as $3.
Lucid investors and customers take comfort in the company’s staying power because its 60% shareholder is Saudi Arabia’s sovereign-wealth fund. An affiliate of the Saudi fund recently agreed to buy as much as $915 million more in Lucid shares. But with $3.9 billion in cash on its September balance sheet, and analysts like Needham’s Vikram Bagri projecting $4 billion in cash consumption next year, Lucid will probably need more financing. Lucid told investors on its last conference call that it has enough to tide it over into next year’s last quarter.
Write to Bill Alpert at [email protected]
 
"The $179,000 version of the Air boasts a top range of 520 miles per charge and the highest horsepower of any production car in the world" needs some adjustment to reflect the currently available model lineup. Otherwise the article seems like kind of a hit piece without balance - no mention of the thousands of satisfied owners, or all the awards the various Air version have accumulated. I'm about as jaded as they come for EVs, but the Air is a great car.
 
I am an owner of a Lucid Air GT and a subscriber to Barton’s and WSJ. I read your article before you posted it here. I applaud you for posting but on this forum since it was a major source.

My concern about it is not doubting any individual experiences reported here but since forum membership is open and anonymous the actual validity is uncertain. Being cynical, who knows if some of these reports are posted by people shorting $LCID? Or Tesla stockholders? Fake accounts and bots are rampant on social media. Just ask Elon about Twitter.

My personal experience as a Lucid Air GT owner has been very different than what you reported. I took delivery at the Lucid Scottsdale Service Delivery center on 5/5/22. Since that time I have driven 9,733 miles. The car is my daily driver. I have not had any problems whatsoever beyond cosmetic software display issues and sometimes Bluetooth not pairing to my iPhone. No driving or safety issues at all. My car has not been back to the Lucid delivery center since I drove it home on day one. There was one recall related to a wiring issue in the dashboard. Lucid came to my home and performed the repair in 20 min while the car was in my garage.

I have had no issues with loss of power, phantom breaking, driving in R when in D or anything else.

The version 1.X.X software was problematic mostly in that it was painfully slow and sometimes non essential screen displays froze. The car took way to “boot up”. That was indeed frustrating, but not a safety issue in my view.

The version 2.0.X software is a vast improvement and added hundreds of useful features. The Highway Assist which is part of 2.0.X is surprisingly good for its initial release. Better than the Tesla lane centering I have drive — particularly at night.

So, my experience (n=1) over roughly 10,000 miles in 6 months has been outstanding. It has been the only car I have ever owned that did not need to visit the dealer service center within the first 10K miles. Believe me if this $140K car was problematic, I would have been living in the Lucid Service center and their technicians worst nightmare. But that is not how my ownership experience unfolded.

I have contacted costumer service via the chat in the Lucid app a few times — only to request the latest software update which was not yet pushed to my car and I learned about on this forum.

My only criticisms of your excellent article would be tone and balance. Why not add color with stories like mine? Also emphasis that negative reports need verification beyond a “car expert” telling you that they sound valid.

Again, thank you for your candor in posting the article here for comments. Great journalism.
 
You need to balance it out a bit with:
They just started shipping the less expensive Touring and Pure models.
Other analysts give LCID a buy rating and targets in the $20-30 range.
You may want to reference other large manufacturers with big recalls and software bugs like VW, GM, and Ford. IIRC, Bolts required battery replacements after several fires.
Also, when discussing their finances, you may want to mention why they're spending so much. They're massively expanding their Arizona factory to increase production. Most of that phase should be done in Q1 of next year. Current production is around 60 cars per day, way up from the past year of less than 20.
 
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1. Most of the failures haven’t resulted in “bricks.” The car drives fine after a reboot (this happened to me), but then service wants to see it and replace any parts necessary to ensure it doesn’t happen again. There have been a couple cases of “bricks,” but the vast majority of the ones that occurred were not.

2. “Dozens” is a stretch. “A few” may be more accurate.

3. Given that Lucid has voluntarily done recalls before (at least two I’m aware of), this issue constituting more than a “de minimis” number of failures is pure speculation, as there hasn’t been a recall, so the assumption should be the issue isn’t widespread or frequent. Had Lucid not been forthcoming with previous recalls I could understand the speculation, but that isn’t the case here.
 
While I respect that you are a real journalist, unlike some of the others who have shown up here on the forum, relying on random people posting their experiences, with no validation or even commentary from those owners (even the recent hit piece had multiple owner quotes), is questionable.

$179k is the GT Performance, which has 446 miles EPA. The 520 miles was the Dream Range, which is no longer available. The current range champ is the GT on 19" wheels, which has 516 miles EPA range. This costs $154k. A little research goes a long way...
 
Just FUD.

TLDR.
 
I am an owner of a Lucid Air GT and a subscriber to Barton’s and WSJ. I read your article before you posted it here. I applaud you for posting but on this forum since it was a major source.

My concern about it is not doubting any individual experiences reported here but since forum membership is open and anonymous the actual validity is uncertain. Being cynical, who knows if some of these reports are posted by people shorting $LCID? Or Tesla stockholders? Fake accounts and bots are rampant on social media. Just ask Elon about Twitter.

My personal experience as a Lucid Air GT owner has been very different than what you reported. I took delivery at the Lucid Scottsdale Service Delivery center on 5/5/22. Since that time I have driven 9,733 miles. The car is my daily driver. I have not had any problems whatsoever beyond cosmetic software display issues and sometimes Bluetooth not pairing to my iPhone. No driving or safety issues at all. My car has not been back to the Lucid delivery center since I drove it home on day one. There was one recall related to a wiring issue in the dashboard. Lucid came to my home and performed the repair in 20 min while the car was in my garage.

I have had no issues with loss of power, phantom breaking, driving in R when in D or anything else.

The version 1.X.X software was problematic mostly in that it was painfully slow and sometimes non essential screen displays froze. The car took way to “boot up”. That was indeed frustrating, but not a safety issue in my view.

The version 2.0.X software is a vast improvement and added hundreds of useful features. The Highway Assist which is part of 2.0.X is surprisingly good for its initial release. Better than the Tesla lane centering I have drive — particularly at night.

So, my experience (n=1) over roughly 10,000 miles in 6 months has been outstanding. It has been the only car I have ever owned that did not need to visit the dealer service center within the first 10K miles. Believe me if this $140K car was problematic, I would have been living in the Lucid Service center and their technicians worst nightmare. But that is not how my ownership experience unfolded.

I have contacted costumer service via the chat in the Lucid app a few times — only to request the latest software update which was not yet pushed to my car and I learned about on this forum.

My only criticisms of your excellent article would be tone and balance. Why not add color with stories like mine? Also emphasis that negative reports need verification beyond a “car expert” telling you that they sound valid.

Again, thank you for your candor in posting the article here for comments. Great journalism.
Typo: “Barron’s” not “Barton’s”. Autocorrect…
 
@blalpert : It's a well-written piece but like @GEWC I'm having trouble with this particular sentence, which seems to be overstating the problem.

...owners’ forums feature dozens of reports from people who say the cars drove forward when in reverse gear, or lost all power in the middle of the road, to become what one owner called a “5,000 pound brick.”

I don't believe there are dozens of reports of cars driving forward when in reverse gear. Nor are there dozens of reports of sudden power loss in the middle of the road. This seems exaggerated though no doubt the issue has occurred.
 
I give you credit for posting it here, but I love “journalism” that uses online forums as primary sources. There is no way to critique a hit piece that uses a few anecdotal incidents to pave the way for a pre-determined story. I didn’t see any mention of the fact that there have not been any repeat cases of “bricking” once the repairs were completed on the VERY few cases that it occurred. The “story” is click bait that doesn’t let the facts get in the way of a good story.

It’s funny how there are no stories about how Lucid corrected the large majority of their software issues with the 2.0 updates or how it is changing the EV industry with extended range and unparalleled performance. Like I said, I give you credit for sharing it here.
 
No mention of this car being the Motor Trend car of the year or the fact that the VAST majority of owners say it is the best automobile they have ever driven. Speaking of which - I would recommend you take a test drive and see if you don’t Agee…..? Lastly, I would recommend that you spend some time to focus on the post 2.0 software which seems to have corrected many of the issues associated with this software centric car.

Just my two cents as someone who has read of every issue reported on these forums and is still anxiously awaiting delivery of my Air Touring - hopefully this month.
 
My experience has been similar with many of the people on this forum -- the car has been an absolute wonder to date. I picked up my car starting with the 2.0 updates, and it's been perfect so far. Best car I've owned by far. The experiences you're describing in the article are very far removed from my experience.
 
You put "dozens" into print. Please list each and every unique occurrence.

It's is really hard to have any respect for the piece though when you talk about the reported software bugs without mentioning the software rewrite and Lucid's willingness to engage its' users directly for input. That one omission, at least in my opinion, discredits the entire piece as one written for a purpose. You have told a story which fits a narrative that appears to have been predetermined and left out some significant pieces of the story that future owners might want to consider.

You asked us all to point out "errors". Omissions are as important as errors and can tend to indicate or support intent.
 
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Before I begin, please note that you have come here inviting feedback. I am not providing it unprompted.

Feedback; there are no "errors" in your article that I can see.

Don't take this as an attack on your person, take this as a criticism of your profession of choice; people like you often start with a gut feeling about a topic, search for whatever information can confirm it, completely ignore your own selection bias, and create what are essentially hit pieces like these that carry a strong implication that may or may not actually exist.

You're doing all of this about a car you don't own made by a company that you're writing about for the first time using forum complaints that you can't verify and extrapolating a story that could only be the product of this shaky foundation of factors you've chosen to take into account. Honestly..."Another Problem for the Stock?"? Do you know what one of the major factors of stocks being affected is, outside of investor calls? Articles like these. "Another problem for the stock"...there's surely going to be now that you've written this.

Quantify "dozens" with actual evidence (for each occurance), or do the right thing and delete that wording immediately if you have any journalistic integrity. Or don't. As with many anti-Lucid articles and FUD/scare pieces, you'll be sure to find an audience that wants to believe that Lucid is a failure and will look for articles like yours to confirm it.

Again, remember, you asked for feedback, there's your feedback.
 
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