Q4 2022 Earnings Preview Article

[Drendino]

I missed the first 30 minutes and only caught the Q and A. Long shot, but did they mention anything about the following?

1. CarPlay
2. New Dream Drive releases
3. Gravity pre-order date

 

[Adnillien]

I missed the first 30 minutes and only caught the Q and A. Long shot, but did they mention anything about the following?

1. CarPlay
2. New Dream Drive releases
3. Gravity pre-order date

None of the above

 

[DBV]

What would have been good in your opinion? What would have been good numbers? Peter described continuing supply chain issues. So what do you think they could have done better in this climate?

I'm not saying the numbers were good, but they weren't awful either. Gravity reveal is still on track for this year, and shipments to Europe and the Kingdom are on track for Q2.

The Seeking Alpha article I posted summed it, as how an investor is thinking. I just think they needed a lower priced EV in this market to really have a shot at making it long term. Like you said the climate/market is going to be really tough right now, especially for a startup. Even makes it worse that the Lucid Air is so high priced.

Only such a small percentage of people can afford them and the market is more competitive now than ever. It is always hard to start any company from scratch, but an auto company is even tougher. Just being realistic on the above, as I think Lucid is awesome.

Even with my statements, I am still strongly considering going forward with my order on a Touring, as I talked with my Lucid advisor today!

 

[Drendino]

Peter described continuing supply chain issues. So what do you think they could have done better in this climate?

Peter was very clear in the Q&A that supply chain issues are no longer an issue. His reason for the lack of orders was lack of brand awareness, which he feels is solvable. We can debate all day if that’s really the reason for the reduced order book, but it was actually refreshing to hear a CEO stop hiding behind supply chain issues for a change.

 

[Drendino]

None of the above

Not unexpected, thanks.

 

[Coltonw011]

I think a more mass produced vehicle to start with would’ve doomed them. They’ve had production issues with the limited amount they’ve gotten out thus far. Starting off with a cheaper car could’ve sank them right out of the gate.

 

[Adnillien]

What would have been good in your opinion? What would have been good numbers? Peter described continuing supply chain issues. So what do you think they could have done better in this climate?

I'm not saying the numbers were good, but they weren't awful either. Gravity reveal is still on track for this year, and shipments to Europe and the Kingdom are on track for Q2.

I found the comment that production was not a bottleneck at odds with 28k reservations. I was disappointed that they did not identify the real bottleneck. I hope it is not demand but rather their ability to scale deliveries and service. Absent a statement about it, people will assume that it is demand. Weak demand will hurt Lucid's ability to scale to profitability. Hence, the outlook was diappointing.

 

[Pwmac]

What would have been good in your opinion? What would have been good numbers? Peter described continuing supply chain issues. So what do you think they could have done better in this climate?

I'm not saying the numbers were good, but they weren't awful either. Gravity reveal is still on track for this year, and shipments to Europe and the Kingdom are on track for Q2.

I know I was hoping for better guidance that showed strong demand for the product and they pretty much said production wasn't the issue. It does seem like they are still having supplier issues which could be hurting their ability to produce. It's also strange that they have 28K reservations and the production capacity to do more but are only going to produce 10-14K. I think people were hoping to hear about some kind of partnership selling their motors or licensing technology and also Gravity reservations opening because I think those were promised for January back in October but now won't be open until the summer. I'm a big fan of my car and invested for the long term but that was not a very good earnings call.

 

[BACamster]

What would have been good in your opinion? What would have been good numbers? Peter described continuing supply chain issues. So what do you think they could have done better in this climate?

I'm not saying the numbers were good, but they weren't awful either. Gravity reveal is still on track for this year, and shipments to Europe and the Kingdom are on track for Q2.

It is all about meeting shareholders expectations.

 

[unTesla]

Peter was very clear in the Q&A that supply chain issues are no longer an issue. His reason for the lack of orders was lack of brand awareness, which he feels is solvable. We can debate all day if that’s really the reason for the reduced order book, but it was actually refreshing to hear a CEO stop hiding behind supply chain issues for a change.

Most importantly--Did he say anything about Apple CarPlay?

 

[NoseyReporter]

Unfortunately. I sold everything I added and was green in. Will buy back lower.

The project production is bad. No way around that.

 

[joec]

The Seeking Alpha article I posted summed it, as how an investor is thinking. I just think they needed a lower priced EV in this market to really have a shot at making it long term. Like you said the climate/market is going to be really tough right now, especially for a startup. Even makes it worse that the Lucid Air is so high priced.

Only such a small percentage of people can afford them and the market is more competitive now than ever. It is always hard to start any company from scratch, but an auto company is even tougher. Just being realistic on the above, as I think Lucid is awesome.

Even with my statements, I am still strongly considering going forward with my order on a Touring, as I talked with my Lucid advisor today!

I totally agree, this is a very niche product at present. The Gravity will help a little, but even that will be a tiny market, given the price.

But I think in terms of several years out, not right now. Most people who know car companies know Lucid has no shot of making real profit in the short term. The question is, how many will stick with them until they get to that more reasonably priced car?

The fact is, a cheaper model Y type product is years out. Just no way to make that happen anytime soon. So how do they survive in the meantime? More investment. Customer satisfaction for their current small owner base. Finding more customers short term.

The Saudis will take care of the investment portion. Customer Sat will depend on how quickly Lucid can hire and lease new service center space. And how much they can improve production to avoid service necessity. Finding more high-end customers will take some serious brand awareness, marketing, PR, and word of mouth. I’m betting there are a good number of Mercedes and BMW customers who want to go electric and are underwhelmed by the EQS and the i7. They need to reach those people.

International expansion will help a bit.

We’re still talking about a niche, but they need to grab a bigger portion of that niche.

 

[Babyrocko1908]

It is all about meeting shareholders expectations.

What were shareholders expectations? I haven't seen numbers only numbers from "Analysts."

What I heard was nothing that gave me serious pause:


1. Gravity still on track for 2024 production w/mid 2023 official reveal.
2. $4.9B in liquidity
3. Europe & Kingdom deliveries starting in Q2 2023
4. 28,000 reservations, 100k Saudi reservations
5. Burn rate flattened
6. Discussions about selling battery technology

 

[wklglider]

I found the comment that production was not a bottleneck at odds with 28k reservations. I was disappointed that they did not identify the real bottleneck. I hope it is not demand but rather their ability to scale deliveries and service. Absent a statement about it, people will assume that it is demand. Weak demand will hurt Lucid's ability to scale to profitability. Hence, the outlook was diappointing.

An analyst asked why so few cars being produced. Is it a demand or production limitation? I think Peter has implicitly confirmed it was a demand issue by answering it was not a production issue. I guess more cancellations come from Pure reservation holders since they are more cost conscious then DE/GT folks especially in this economic environment.

 

[steveairgt]

That lot of cars isn't static.. cars are moved in and out all the time. I think it was last week, Bear's workshop did a flyover and zoomed in on a bunch to see which ones were dusty and clean. He said a car will get covered with dust in 2-3 days in AZ, and there were a bunch of cars with clean roofs mixed in with the dusty ones.

Not saying the 2000 cars sitting there isn't a problem, but it's not like they're just sitting.

I was hoping someone would ask about the over 2000 cars sitting in the parking lot. It seems that those are primarily AGT that people ordered then either cancelled or downgraded. Can’t we assume that every car there was built to actual order? I didn’t think they were building cars on speculation.

 

[Babyrocko1908]

I was hoping someone would ask about the over 2000 cars sitting in the parking lot. It seems that those are primarily AGT that people ordered then either cancelled or downgraded. Can’t we assume that every car there was built to actual order? I didn’t think they were building cars on speculation.

They didn't say but I think a bunch of those cars are heading to Europe. Peter stated GT and Dreams were going there first.

 

[steveairgt]

I was also disappointed in Peter’s presentation. He always does this. It’s supposed to be an earnings call. But it seems like h gives the same sales pitch such saying best technology, range, quality, efficiency etc. The audience at this type of meeting wants numbers, plans, why things happened, not marketing hype.

 

[Babyrocko1908]

I was also disappointed in Peter’s presentation. He always does this. It’s supposed to be an earnings call. But it seems like h gives the same sales pitch such saying best technology, range, quality, efficiency etc. The audience at this type of meeting wants numbers, plans, why things happened, not marketing hype.

I listened to Sherry talk for almost 30 minutes about numbers.

 

[steveairgt]

They didn't say but I think a bunch of those cars are heading to Europe. Peter stated GT and Dreams were going there first.

Ok “a bunch”, I’ll agree with that but why are there over 2000 cars sitting in the AZ sun for several months now? I bet he can’t or won’t say “…. we had 2000 cancellations after the order was made…..” Maybe interest rates effected some buyers. When they made their order interest rates were in the 2s, now it’s in the 5s, etc. I would like more transparency.

 

[joec]

Ok “a bunch”, I’ll agree with that but why are there over 2000 cars sitting in the AZ sun for several months now? I bet he can’t or won’t say “…. we had 2000 cancellations after the order was made…..” Maybe interest rates effected some buyers. When they made their order interest rates were in the 2s, now it’s in the 5s, etc. I would like more transparency.

I think batching is a more likely explanation than cancelations. They get five orders for a White GT with Tahoe interior. They do a run of 200. Because a run of 5 would be ridiculous.

That’s an extreme example. But you get the gist. Sooner or later, you end up with some leftover cars.

Also, remember, they were desperate at the end of last year to meet or beat 7,000 cars “produced.” The easiest way to achieve that by far was to produce more GTs, which they were already successfully making. Rather than switching over to Touring and Pure before they were ready.