Lucid Motors Start-Up
December 23, 2021
Whenever the word “EV” or electric vehicle is mentioned, the remarkably successful technology company, Tesla is the first thing to come to mind. It grew exponentially over a decade under its brilliant founder Elon Musk, popular for its vehicles’ ability to go from 0-60 in 2.07 seconds. However, a promising electric car start-up has introduced itself to the market: Lucid Motors.
Since the company went public through a special purpose acquisition companies (SPAC) deal in July, its stock price increased 80% by the week’s end. Lucid Motor’s market value overtook that of Ford Motors (valued at $89.9 billion) and came close to surpassing General Motors ($90.9 billion). At its peak, one share was worth $65, though it did not come close to the $1 trillion market cap of Tesla or the $140 billion market value of another electric car start-up, Rivian (went public in November). However, some within the company project their value to amount to more than that of Tesla in the future. This surge in stock price indicates that Lucid is being regarded as an advanced technology company like Tesla, rather than a traditional car company such as Ford.
A contributing factor to this start-up’s success from the onset is its first vehicle called the “Air Sedan,” which won the MotorTrends Car of the Year award. Priced at $169,000, the Dream Edition of this model (one of three versions) has a range of 520 miles, the longest in the industry and besting Tesla by over 100 miles (only 520 units of this edition is projected to be manufactured). The other two versions, the Air Grand Touring Edition priced at $169,00 and the Air Pure base version priced at $77,400, have a range of 516 miles and 406 miles respectively (compared to the 405-mile range and $95,000 Model S).
Although it may seem like it, Lucid Motors is not trying to compete head-to-head with Tesla, which has goals of accessibility and affordability to all. On account of their emphasis on quality and luxury, Lucid is jumping into the ring with big luxury car brands such as Mercedes-Benz, Audi, BMW, and Land Rover. With more than 17,000 pre-orders having already been placed on their first model, Lucid expects to produce more than 20,000 Air Sedans in 2022 and projects revenue of at least $2.2 billion.
Yet, despite all these promises, they are just thatーpromises. This young company has yet to generate a significant amount of revenue and turn profitable. In the first nine months of this year, they reported a loss of up to $1.5 billion, $534.4 million of which was lost in the third quarter alone. In comparison, it made a measly $232,000 in the third quarter from a battery deal with the Formula E electric racing league. The company has not been without challenges, faced with supply chain disruptions and manufacturing issues, they may be hard-pressed to maintain a steady stream of production in the near future. CEO Peter Rawlinson said himself that the production “target was not without risk.” But then again, as that age-old saying goes, “if there is no risk there is no reward.”
Works Cited
https://www.cnbc.com/2021/11/16/lucid-ceo-says-the-company-could-eventually-be-valued-like-
https://fortune.com/2021/10/25/lucid-motors-air-dream-tesla-model-s-rival-ev/