Report suggests reservations aren’t converting, hurting sales
Company expects to build as few as one-third of plant capacity
Electric luxury car maker Lucid may have a problem with demand, according to a new report. That’s with enough demand from consumers, not the problem where the new car company can’t keep up.
The Lucid Air is a luxury electric sedan that offers a maximum power output of more than 1,200 hp, and is also offered with an electric range of up to 845 km. These big numbers come with a big price tag, of course, and the currently available models are the $148,000 Touring and the $212,500 Grand Touring.
But despite having “over 34,000 reservations,” CNBC reports that the company delivered fewer than 2,000 vehicles in the fourth quarter of 2022 and that it plans to build just 10,000-14,000 vehicles in 2023. Fewer than half of what the plant is capable of producing.
“We’ve solved production. That is not the gating issue here now,” CEO Peter Rawlinson told CNBC. “My focus is on sales. And here’s the thing: We’ve got what I believe to be the very best product in the world. … Too few people are aware of not just the car, but even the company.”
The company feels it can fix that lack of buyer knowledge, and the CEO says the company plans to focus on boosting customer awareness this year. He also hinted that the company is having trouble converting non-binding reservations to firm orders. But, the question changes to become one about how long the company has before it can no longer afford to keep producing at low volumes.
“As we produce vehicles at low volumes on production lines designed for higher volumes, we have and we will continue to experience negative gross profit related to labor and overhead costs,” CFO Sherry House said on the company’s earnings call.
While the company has strong backing, Lucid Motors will need to find a strong volume of customers if it wants to keep going.
