Q4 2022 Earnings Preview Article

[NewEnglander]

Tesla is run by Elon Musk who is a master social media influencer. Lucid is run by Peter Rawlinson who only knows efficiency but nothing else. Their only similarity is they both make EVs. That's it.

So are we buying a car or the CEO?

 

[wklglider]

And Tesla still didn't make a time in their 1st year, or their 5th year. That's the point.

Yeah, but Tesla is the pioneer. What was the environment back then? I've never heard a single person talking about EVs 10 years ago. Nowadays, manufacturers are spawning EVs like crazy. Do you think Lucid will have time to spare? Or will these competitors give Lucid a chance?

 

[wklglider]

So are we buying a car or the CEO?

If the company goes out of business, it doesn't matter if the car is good or not.

 

[Drendino]

Did we listen to the same call? He said numerous times there's still some supply chain issues particularly with stealth parts.

Clearly not. Peter talks about a little supply chain constraints regarding stealth trim, but if you go to 43 minutes and listen on, he is crystal clear that the reduced guidance is “not about production constrains”. You simply can’t blame the supply chain for reduced orders and I admire Peter for answering the question, even though it’s not what anyone wanted to hear. I do think it was a bit of a dodge to state that they won’t be reporting on the order log going forward because you know they would broadcast it everywhere if order demand was high. I can’t say that I blame them given the state of affairs.

 

[NewEnglander]

If the company goes out of business, it doesn't matter if the car is good or not.

And why would we want to pass the judgment on a company that is clearly trying hard to not only survive but thrive. It’s always easy to say something will fail or won’t work, it’s much harder to make something Work. We all have a choice on what we deem is right for us but let’s not try to influence others with hard statements. There are many folks in this forum who want Lucid to succeed, many have invested their hard earned money in its cars and do not want Lucid to fail. They may not say it but they all feel bad when someone tries to bring the company they have invested in down. For those who do not have confidence in Lucid, politely leave. This forum is not even for them as many moderators have stated earlier. For the rest, they still enjoy Lucid making progress, fixing the defects, and making more customers happy.

 

[blueice89]

Their price point is still not realistic in environment where car loan is 5%. The used market is screaming to lower the price with used gt and seems going 115-125k

 

[wklglider]

And why would we want to pass the judgment on a company that is clearly trying hard to not only survive but thrive. It’s always easy to say something will fail or won’t work, it’s much harder to make something Work. We all have a choice on what we deem is right for us but let’s not try to influence others with hard statements. There are many folks in this forum who want Lucid to succeed, many have invested their hard earned money in its cars and do not want Lucid to fail. They may not say it but they all feel bad when someone tries to bring the company they have invested in down. For those who do not have confidence in Lucid, politely leave. This forum is not even for them as many moderators have stated earlier. For the rest, they still enjoy Lucid making progress, fixing the defects, and making more customers happy.

Okay, I leave. I didn't think too much about the influence that my statement makes. Neither did I want to hurt anyone's interest. I just wanted to express my thoughts. Nothing more than that. Hope you enjoy your Lucid!

 

[NewEnglander]

Their price point is still not realistic in environment where car loan is 5%. The used market is screaming to lower the price with used gt and seems going 115-125k

I agree with you and this is what I mentioned in earlier post that there are alternatives available. But Lucid has lowered the price point by $7500. In the end demand and supply mechanics drive prices to the equilibrium.

 

[blueice89]

The other part that is frustrating was listening how complex their production line up is they kept saying oh we need to produce all these combinations. They honestly need to slim Down choose and create drastic cost cut measures.
Lesser models, lesser colors, lesser parts, lesser labor. They seemed to hint at cost cutting occurring but let’s see if they implement it.

 

[NewEnglander]

The other part that is frustrating was listening how complex their production line up is they kept saying oh we need to produce all these combinations. They honestly need to slim Down choose and create drastic cost cut measures.
Lesser models, lesser colors, lesser parts, lesser labor. They seemed to hint at cost cutting occurring but let’s see if they implement it.

I agree with your assessment. I will have to say Rivian has managed this aspect better than Lucid. They cut down on Ocean interior immediately and delayed it when they realized they needed to get more cars out. Similarly, now, they have delayed quad motor R1S in favor of dual motor reservations even though dual motor reservations were taken later. This helps them to get more dollar for the car and use fewer motors - major profitability driving lever for them. Lucid would need to do something to turn the corner. Their goal needs to be to first save the company even if they end up disappointing existing or future customers. I expect Lucid May need to cut a few things out and drive prices down, even if temporarily.

 

[Drendino]

I agree with your assessment. I will have to say Rivian has managed this aspect better than Lucid. They cut down on Ocean interior immediately and delayed it when they realized they needed to get more cars out. Similarly, now, they have delayed quad motor R1S in favor of dual motor reservations even though dual motor reservations were taken later. This helps them to get more dollar for the car and use fewer motors - major profitability driving lever for them. Lucid would need to do something to turn the corner. Their goal needs to be to first save the company even if they end up disappointing existing or future customers. I expect Lucid May need to cut a few things out and drive prices down, even if temporarily

Speaking from experience, Lucid has never tried to screw their customers over like Rivian and I doubt they will ever use Rivian as the model. Rivian’s order log is through the roof because there are no other viable options. I can’t wait for the day that this is no longer true. I really wish that Lucid would amend their Gravity plan to take dead aim at the R1S.

 

[DBV]

Tesla did not make any money for a long time either. However, the markets wanted it to succeed. It was a pioneer. Lucid has a great power train that enables a very spacious and comfortable luxury car. Nothing else is close so fear of Lucid going under is a bit exaggerated.
Buy the car if you like it and don’t buy it if you find a better value for money with other brands if that’s what appeals to you. Hope this helps.

Tesla was the first EV back then and had plenty of time to do it, as no one else was making them. This is not even close to the same market place now or same scenario. Lots of competitors now and Tesla is really profitable and can lower prices again if it wants too. Another thing is it is a SUV market now. Dynamics have totally changed. I am still a sedan person, but everyone else around me has SUV’s.

 

[3rdMotor]

Finance chief Sherry House said Lucid would not publish quarterly reservation numbers going ahead.

That… is concerning. Why else would they cease providing that info unless they forecast it will be “bad news” and would rather not disclose it?

 

[quantum]

I recently test drove the AGT twice. Really, really like the car and am seriously considering getting it. I’d lie though if I said I wasn’t slightly concerned with putting that much money on a vehicle whose maker still has to prove its long term viability. The car is so well designed though!

Lucid not going anywhere....the best EV out there. Once economy improves, I see them flourising....but will take 3-4 years. Also , the Saudi factory will be up in 2024, that will give them a lot of sales from the rich Gulf countries.

 

[quantum]

Finance chief Sherry House said Lucid would not publish quarterly reservation numbers going ahead.

That… is concerning. Why else would they cease providing that info unless they forecast it will be “bad news” and would rather not disclose it?

Reservations do not transform into buys...I reserved a Hyundai ioniq 6, never bought, cancelled. Whats the point in giving that number?

 

[3rdMotor]

Reservations do not transform into buys...I reserved a Hyundai ioniq 6, never bought, cancelled. Whats the point in giving that number?

If Lucid’s output is X and their reservations (approximate consumer backlog) are Y, then (Y minus X) is a good indicator of potential future sales in the pipeline.

If the reservations continue to decline as expected, that’s bad press. If the reservations were increasing, best believe they wouldn’t be dropping that info from future earnings calls.

 

[NoseyReporter]

Every single analyst focused on one question. Can you explain the production projection of 10-14k. They pounded this question from every angle, and the little morsels of info seem to elude a drop in demand. It makes honest sense. It's an expensive car, in a time when people have several options, and a financial landscape that is causing many to tighten their spending.

The low production projection coupled with 4.9b only last into Q1 of 24 is eye opening.

I still own shares but reduced my position significantly. Probably will only swing until after the q3 or q1 raise, which is undoubtedly coming.

 

[NoseyReporter]

Reservations do not transform into buys...I reserved a Hyundai ioniq 6, never bought, cancelled. Whats the point in giving that number?

It's your sales funnel. Given enough time you will start to develop of feel for the funnel and what your conversion rate is. They are obfuscating this for a reason.

 

[Shuasha]

Today the stock goes down, tomorrow they announce going private at $12/share. The company isn't going anywhere.

I have to say that Peter didn't do a great job at answering the questions about production targets. He should have anticipated it and had a solid answeer in place instead of stammering through bad non-answer.

 

[joec]

I have to keep reminding myself it’s very early days for Lucid. This week alone, I had more than six people stop me on the street to ask “What’s a Lucid?” And that’s in a very EV-aware town. (Last night, driving around in the snow, I saw a Rivian, a Bolt, and six Teslas within five minutes of leaving my home.)

Rawlinson isn’t wrong about needing to get the word out about the car. That’s going to require a lot of press, maybe some advertising, and more satisfied customers. Which means getting service under control.

But when I got home from dinner last night, I sat in my garage for more than 20 minutes listening to flac files with a huge smile on my face. So I do think more word of mouth is well within reach.

Until they get Gravity out the door (and then eventually the lower-priced sedan and SUV) all they can do is capture more sales from folks who are currently looking at BMW and Mercedes. And yes, some more Model S buyers. That doesn’t mean getting into a pointless pricing war with those brands. (That’s exactly what Elon is hoping for, since he has the clear advantage there.) It means making the case for why the Air is worth the extra money.