Purchase Decision Time - Not So Straight Forward when All Things Considered. Need your opinions

[GMan]

Background ... I put in a reservation in Dec 2021 for a Touring and my number is up. I have about a week left to decide on whether to purchase or not. I have been taking the normal due diligence steps in order to make a decision, which are things like:

1. Getting input from current owners. It's clear that most everyone who has a vehicle is very happy with them based on this discussion board
2. Digging into the "issues". It's become pretty clear to me that most of the more serious issues have been addressed with tech updates, leaving only minor concerns.
3. Reassessing personal financials. Clearly the stock market has taken a hit since last year, and we have inflation.
4. Test driving the vehicle. I test drove a GT version and loved it. I'm not a "speed" guy so I don't thing the GT vs T version really mattered for the test drive. No red flags on the test drive and extremely impressed with driveability, performance, handling, etc... just a pleasure.

So over the past few weeks since my reservation became available to order, I could not help but hearing about the company stock and viability. And quite honestly I do not care what the stock value is - so long as Lucid Motors will be around long enough for me as car owner. I have been asking myself whether or not the company will be around in a year or two. If the company is not around, what happens to me as an owner? How do I service my car? Who do I call for roadside assistance? What happens if my glass canopy breaks and how would I even get a part to get it fixed? Will I need to buy another car and have just lost the $120K for the Lucid? Could Lucid go bankrupt or be acquired, and what would that mean for current owners (are warranties gone, etc...)

So at this point, I love the car and am ready to move forward but find myself stalled pondering these very important questions. I have done some due diligence here as well.

1. Based on the company financials (publically available), the company has enough cash to get through "most" of 2023.
2. Elon keeps stoking the fire, trying to convince the general public Lucid is going bankrupt. This seems like a good way for Musk to try to squash a competitor but his words matter and he's making things worse.
3. The company has the facilities in place now, to raise another 8 billion in capital. Some say this is what is causing the stock price to sink (dilution)
4. The company is backed by the Saudi Sovereign fund (very deep pockets)

So, what do you think about the stability / viability of the company? Likely you own or are close to owning a vehicle - to what extent, if any, does this concern you?

 

[DJL]

Background ... I put in a reservation in Dec 2021 for a Touring and my number is up. I have about a week left to decide on whether to purchase or not. I have been taking the normal due diligence steps in order to make a decision, which are things like:

1. Getting input from current owners. It's clear that most everyone who has a vehicle is very happy with them based on this discussion board
2. Digging into the "issues". It's become pretty clear to me that most of the more serious issues have been addressed with tech updates, leaving only minor concerns.
3. Reassessing personal financials. Clearly the stock market has taken a hit since last year, and we have inflation.
4. Test driving the vehicle. I test drove a GT version and loved it. I'm not a "speed" guy so I don't thing the GT vs T version really mattered for the test drive. No red flags on the test drive and extremely impressed with driveability, performance, handling, etc... just a pleasure.

So over the past few weeks since my reservation became available to order, I could not help but hearing about the company stock and viability. And quite honestly I do not care what the stock value is - so long as Lucid Motors will be around long enough for me as car owner. I have been asking myself whether or not the company will be around in a year or two. If the company is not around, what happens to me as an owner? How do I service my car? Who do I call for roadside assistance? What happens if my glass canopy breaks and how would I even get a part to get it fixed? Will I need to buy another car and have just lost the $120K for the Lucid? Could Lucid go bankrupt or be acquired, and what would that mean for current owners (are warranties gone, etc...)

So at this point, I love the car and am ready to move forward but find myself stalled pondering these very important questions. I have done some due diligence here as well.

1. Based on the company financials (publically available), the company has enough cash to get through "most" of 2023.
2. Elon keeps stoking the fire, trying to convince the general public Lucid is going bankrupt. This seems like a good way for Musk to try to squash a competitor but his words matter and he's making things worse.
3. The company has the facilities in place now, to raise another 8 billion in capital. Some say this is what is causing the stock price to sink (dilution)
4. The company is backed by the Saudi Sovereign fund (very deep pockets)

So, what do you think about the stability / viability of the company? Likely you own or are close to owning a vehicle - to what extent, if any, does this concern you?

It seems to me that you are asking all of the right questions and your level of due diligence is very noteworthy. I wish I had a glassball and could answer the ones regarding the future of Lucid for you with real certainty. However, that is not possible. With Lucid Motors being so tightlipped and having a history (albeit short) of missing each of their quarterly projections, no one, outside of the executive management team and their Board of Directors, really knows what their future will be after 2023.
With that said, I do believe they have a reasonable chance of surviving and growing and being a major player after 10 years. In fact, I have put my money where my mouth is as I and my wife both own a reasonable amount of their stock and are viewing it as a long term investment (5 to 10 years).
If it fails, I do not think its assests will just disappear. Their technology is so much more advanced than most, if not all, of their competitors. I would think that the Saudi's would negotiate a deal with another manufacture to take over the huge plant that Lucid is spending billions on to built (and is getting closer to being completed each day).
Life is a risk, no one can assure you that you will be alive tomorrow. Thus, my philosophy is to enjoy today but plan for tomorrow. Only you can decide what is right for you. However, I am loving my Lucid each and everyday as it is simply to the best driving experience I have every had. Good luck, gman, with whatever you decide.

 

[DJL]

It seems to me that you are asking all of the right questions and your level of due diligence is very noteworthy. I wish I had a glassball and could answer the ones regarding the future of Lucid for you with real certainty. However, that is not possible. With Lucid Motors being so tightlipped and having a history (albeit short) of missing each of their quarterly projections, no one, outside of the executive management team and their Board of Directors, really knows what their future will be after 2023.
With that said, I do believe they have a reasonable chance of surviving and growing and being a major player after 10 years. In fact, I have put my money where my mouth is as I and my wife both own a reasonable amount of their stock and are viewing it as a long term investment (5 to 10 years).
If it fails, I do not think its assests will just disappear. Their technology is so much more advanced than most, if not all, of their competitors. I would think that the Saudi's would negotiate a deal with another manufacture to take over the huge plant that Lucid is spending billions on to built (and is getting closer to being completed each day).
Life is a risk, no one can assure you that you will be alive tomorrow. Thus, my philosophy is to enjoy today but plan for tomorrow. Only you can decide what is right for you. However, I am loving my Lucid each and everyday as it is simply to the best driving experience I have every had. Good luck, gman, with whatever you decide.

I wanted to include this significant recent (October, 2022) development in my post above, but I could not readily find it. I am surprised that the financial market has not appreciated its significance so maybe something that we don't understand or know about is giong on. Nevertheless, it should be good news for Lucid and its chance of long term survival. To read the article, just click HERE.

 

[LucidBrit]

There is no telling what will happen. If I could do so I would be very rich and have a Sapphire on order not an AT. That being said, the business plan looks sound, the product is great and the opportunity is there. All Lucid needs is to execute the plan - just the same as every other business - make product, continuously improve quality, reduce costs and market effectively. Oh, and they need some luck - just like every other business.

 

[borski]

Background ... I put in a reservation in Dec 2021 for a Touring and my number is up. I have about a week left to decide on whether to purchase or not. I have been taking the normal due diligence steps in order to make a decision, which are things like:

1. Getting input from current owners. It's clear that most everyone who has a vehicle is very happy with them based on this discussion board
2. Digging into the "issues". It's become pretty clear to me that most of the more serious issues have been addressed with tech updates, leaving only minor concerns.
3. Reassessing personal financials. Clearly the stock market has taken a hit since last year, and we have inflation.
4. Test driving the vehicle. I test drove a GT version and loved it. I'm not a "speed" guy so I don't thing the GT vs T version really mattered for the test drive. No red flags on the test drive and extremely impressed with driveability, performance, handling, etc... just a pleasure.

So over the past few weeks since my reservation became available to order, I could not help but hearing about the company stock and viability. And quite honestly I do not care what the stock value is - so long as Lucid Motors will be around long enough for me as car owner. I have been asking myself whether or not the company will be around in a year or two. If the company is not around, what happens to me as an owner? How do I service my car? Who do I call for roadside assistance? What happens if my glass canopy breaks and how would I even get a part to get it fixed? Will I need to buy another car and have just lost the $120K for the Lucid? Could Lucid go bankrupt or be acquired, and what would that mean for current owners (are warranties gone, etc...)

So at this point, I love the car and am ready to move forward but find myself stalled pondering these very important questions. I have done some due diligence here as well.

1. Based on the company financials (publically available), the company has enough cash to get through "most" of 2023.
2. Elon keeps stoking the fire, trying to convince the general public Lucid is going bankrupt. This seems like a good way for Musk to try to squash a competitor but his words matter and he's making things worse.
3. The company has the facilities in place now, to raise another 8 billion in capital. Some say this is what is causing the stock price to sink (dilution)
4. The company is backed by the Saudi Sovereign fund (very deep pockets)

So, what do you think about the stability / viability of the company? Likely you own or are close to owning a vehicle - to what extent, if any, does this concern you?

These are very personal choices, but also very good questions. I don't think Lucid is going anywhere, despite the present stock price. As you mentioned, the entire market is down, for many reasons. For a new automaker it's even harder, because of supply chain issues, the pandemic, etc. However, those things are easing up; Lucid has ramped up production and it will only get better from here. The used car market used to be insane but is now self-correcting as more cars and parts become available and means of production once again increases. Once the war in Russian invasion of Ukraine ends things will also get quite a bit better as the world will be able to divert resources back away from that to other issues.

Basically, we're in a bad spot as a world right now, and if you believe it's not going to end the world, it's only going to get better... eventually. That rising tide will lift all ships, and I think Lucid is well-built and well-capitalized to take advantage of that rising tide. Companies built in bear markets tend to outperform those built in bull markets in the long run, and though Lucid wasn't founded in a bear market, it started producing in one.

As for personal finances, that's a very important personal consideration and only for you to be able to decide.

Just my $.02

 

[MoniputerLM]

Background ... I put in a reservation in Dec 2021 for a Touring and my number is up. I have about a week left to decide on whether to purchase or not. I have been taking the normal due diligence steps in order to make a decision, which are things like:

1. Getting input from current owners. It's clear that most everyone who has a vehicle is very happy with them based on this discussion board
2. Digging into the "issues". It's become pretty clear to me that most of the more serious issues have been addressed with tech updates, leaving only minor concerns.
3. Reassessing personal financials. Clearly the stock market has taken a hit since last year, and we have inflation.
4. Test driving the vehicle. I test drove a GT version and loved it. I'm not a "speed" guy so I don't thing the GT vs T version really mattered for the test drive. No red flags on the test drive and extremely impressed with driveability, performance, handling, etc... just a pleasure.

So over the past few weeks since my reservation became available to order, I could not help but hearing about the company stock and viability. And quite honestly I do not care what the stock value is - so long as Lucid Motors will be around long enough for me as car owner. I have been asking myself whether or not the company will be around in a year or two. If the company is not around, what happens to me as an owner? How do I service my car? Who do I call for roadside assistance? What happens if my glass canopy breaks and how would I even get a part to get it fixed? Will I need to buy another car and have just lost the $120K for the Lucid? Could Lucid go bankrupt or be acquired, and what would that mean for current owners (are warranties gone, etc...)

So at this point, I love the car and am ready to move forward but find myself stalled pondering these very important questions. I have done some due diligence here as well.

1. Based on the company financials (publically available), the company has enough cash to get through "most" of 2023.
2. Elon keeps stoking the fire, trying to convince the general public Lucid is going bankrupt. This seems like a good way for Musk to try to squash a competitor but his words matter and he's making things worse.
3. The company has the facilities in place now, to raise another 8 billion in capital. Some say this is what is causing the stock price to sink (dilution)
4. The company is backed by the Saudi Sovereign fund (very deep pockets)

So, what do you think about the stability / viability of the company? Likely you own or are close to owning a vehicle - to what extent, if any, does this concern you?

Ok, here are my thoughts:

I am almost 72 and wanted an EV but don't like the Tesla interiors so I ordered a Dream Edition Performance and took delivery 12/31/2021. I have enjoyed driving an EV, I very fast one at that. There have been a lot of mostly minor issues with my car and Lucid's service here in Houston is great. The software will be "good enough" in a few months and much better next year. Also, I have other cars so if the Lucid is in the shop it's not a big issue. I also have Hummer and Rivian SUVs on order and will keep my Lucid until I see if I like either of those then I will trade the Lucid or give it to one of our children.

I obviously don't want to see Lucid go out of business and my car become an orphan but will take my chances.

Now, if I was much younger, I would wait for EV technology to get better, newer batteries, better charging networks and not buy any of the current cars. If you can/want to wait 2-3 years then I think that you will have a great selection of EVs that are much better than what's available now. And if Lucid makes it through their current issues, their cars will be better also.

Just my 2 cents.

 

[stratus]

Since receiving my vehicle in September, I have thought about these issues on a daily basis. Honestly , I get a bit worried , but I don’t think anyone can make accurate predictions and not many people outside of the executives at Lucid really know about the company’s long term viability.

Here is what I personally feel very strongly about. I absolutely love this car. I have never been much of an automobile enthusiast, until I received the Lucid. It is incredibly fun, a wonder to drive and an absolute mood enhancer. I regularly go out of my way after work to extend my time in the vehicle before I get home ( not that I don’t love being home, but sometimes I just need a few more minutes of Lucid and me time ). I find the driving experience almost meditative!

There is another plus to owning the Lucid and that is being a part of this extremely fun community that is so willing to share their time and knowledge to help other members have a heightened experience. That has been a huge plus for me and I have learned a tremendous amount from reading this forum.

Go with your heart on this one. I did and I don’t regret it all. That being said, I think Lucid has such an outstanding product that they will survive, even in this horrible economic macro environment .

Good luck and hope to see a photo of your vehicle soon.

 

[LucidBrit]

Since receiving my vehicle in September, I have thought about these issues on a daily basis. Honestly , I get a bit worried , but I don’t think anyone can make accurate predictions and not many people outside of the executives at Lucid really know about the company’s long term viability.

Here is what I personally feel very strongly about. I absolutely love this car. I have never been much of an automobile enthusiast, until I received the Lucid. It is incredibly fun, a wonder to drive and an absolute mood enhancer. I regularly go out of my way after work to extend my time in the vehicle before I get home ( not that I don’t love being home, but sometimes I just need a few more minutes of Lucid and me time ). I find the driving experience almost meditative!

There is another plus to owning the Lucid and that is being a part of this extremely fun community that is so willing to share their time and knowledge to help other members have a heightened experience. That has been a huge plus for me and I have learned a tremendous amount from reading this forum.

Go with your heart on this one. I did and I don’t regret it all. That being said, I think Lucid has such an outstanding product that they will survive, even in this horrible economic macro environment .

Good luck and hope to see a photo of your vehicle soon.

I especially agree with your comment on nobody outside of execs at Lucid knowing what is going on. Anyone who is or has been a senior leader in a publicly traded company knows that nothing of much significance normally gets disclosed in earnings calls. Typically the statements are deliberately vague and non-committal. Necessarily so or you will end up it court accused of being misleading. The analysts try to take apart the published results, but they really don’t know much about what is going on even in established companies let alone relatively new ones. They do have to sound convincing and they are well paid for doing so, but they haven’t a clue.

 

[ikonos]

Apart from the cash on hand, if Lucid delivers their 6000 cars this year that an added $600m-$725m added cash to their buffer plus whatever they can deliver next year. They are burning through cash now but it is also because of opening up new lines in the plant along with whatever they are spending on the Saudi plant. which are potentially revenue generating investments. Unless they have to recall and constantly fix the cars they have already been delivering, they should have cash to last for the next 2 years.

 

[stealthpilot]

It’s also worth noting that the company has good product and very good IP. I think it will be an acquisition target unlike Fisker which just disappeared.

 

[Slam08]

It’s also worth noting that the company has good product and very good IP. I think it will be an acquisition target unlike Fisker which just disappeared.

The IP is the difference between Lucid and most other EV startups.

The power to weight ratios of their motors and wunderbox is unique.

I think they got started as a formula E battery company as well.

In addition, it doesn’t take a large portion of car market to be viable. Alfa Romeo and Fiat keep sticking around.

Lucid will be fine for the time you will own the car I think.

 

[Steveinarizona]

The IP is the difference between Lucid and most other EV startups.

The power to weight ratios of their motors and wunderbox is unique.

I think they got started as a formula E battery company as well.

In addition, it doesn’t take a large portion of car market to be viable. Alfa Romeo and Fiat keep sticking around.

Lucid will be fine for the time you will own the car I think.

I think Lucid will survive and continue to produce sound cars. But Alfa and Fiat are not good examples of your point as both of them are part of a larger automotive group (Stellantis).

 

[xponents]

@gman What do you mean by you have a week? Will it go away after that, or are you talking about the delivery(not confirming the design)

 

[Mr_rhythm]

@gman What do you mean by you have a week? Will it go away after that, or are you talking about the delivery(not confirming the design)

You have 30 days to decide to finalize your order from date of notification.

 

[xponents]

You have 30 days to decide to finalize your order from date of notification.

What happens after that?

 

[DeaneG]

What happens after that?

You lose your reservation date and agreed-on price. Starting over if you decide you wanted an Air after all.

 

[Slam08]

What happens after that?

You are dead to them. It’s like you never made a reservation.

 

[cwang089]

I have reservations for Pure and this is also a serious consideration for me. Based on their financials they have some major issues especially around their profit per vehicle sold. They are currently losing money on each vehicle produced. The amount of gross profit loss per vehicle is a little murky because they have it as cost of revenue which isn't excactly COGS. But anyhow the number doesn't look good.

Tesla at the same point in their production lifecycle was making a healthy gross profit per vehicle even if you strip out the Tesla credits.

This situation is going to compound going into next year because they are shifting more of their sales to lower priced/lower margin vehicles AND they are mostly losing tax credits so future demand will wane somewhat versus when they had $7,500 tax credit.

On top of this, people have been focusing on them ramping up production but they seem to have a demand problem. The cars they are producing are not getting sold and they have available inventory that they are willing to sell at a discount before year end.

Tesla was making a gross profit, so scaling up made sense especially with economies of scale. If the number estimates are right Lucid is in trouble as they can't scale out of this issue. They need to raise prices or cut costs per vehicle and/or both.

So it really is an issue as a prospective buyer worrying if the company will be around to support your vehicle. Think Fisker Karma and how those vehicles tanked.

The Saudis back Lucid, but for how long. Lucid keeps pushing the narrative that they have better cars than say Tesla but 1 upping categories here and there. But Teslas have better charging network and will probably be around as they can maintain themselves at the current run rate.

On top of that, all of the ICE legacies are now having decent cars as an alternative to Tesla. I trust a porsche, benz, or BMW to be around in 5 years to support the vehicles they sell. Rivian and Lucid are up in the air.

I love the tech of the Lucid especially the efficiency and the rear seat room sans the trunk. But I don't think a lot of people appreciate efficiency as much as I do.

/rant

 

[vraj83]

I’m a believer in the technology. Lucid is leaps and bounds ahead of the competition - at least today.

I’m less confident in their ability to execute and deliver. Supply chain management is an entirely different animal under the best circumstances - and I feel like we are facing a worst case scenario in the global supply chain. Lucid can have the best IP around, but if they can’t get cars out the door, it may not matter. And I haven’t seen anything that gives me confidence in their ability to scale and sustain production.

I still very much want this car. And my personal answer to all of this is to lease. I debated purchasing outright, but I’m choosing to hedge by leasing - even at a relatively high money factor. And if all goes well with Lucid, I’ll just purchase a Gravity in 3 years.

 

[cwang089]

i thought they were far ahead in efficiency technology but the highway tests of both BMW and Mercedes and even porsche have been surprisingly efficient. Whereas Lucid real world efficiency tests have underperformed EPA.

What has been really horrible for efficiency is the Rivian, but I guess that was to be expected. While Lucid is trying to get their act together others are constantly improving, even Tesla's. The OTA updates continue to impress.

Where I have my Pure ordered and with 7500 rebate, it is still a relative bargain. As long as Lucid is around in 10 years