BENGALURU: Lucid Group exceeded market expectations for third-quarter deliveries on Monday, as discounts and more affordable financing options for its luxury electric vehicles stimulated demand in a volatile economy.
The company's shares saw a modest increase of about 1.5 percent.
Majority-owned by the Saudi Public Investment Fund, Lucid delivered 2,781 vehicles in the quarter ending September 30, surpassing the 2,242 estimates from 8 analysts surveyed by Visible Alpha.
Consumer interest in electric vehicles in the US has been declining due to rising interest rates and the availability of more affordable hybrid alternatives.
EV manufacturers like Tesla, Rivian, and Lucid have responded by cutting prices and offering incentives such as lower financing rates to attract customers.
Lucid experienced a sequential decline in production, manufacturing 1,805 vehicles in the third quarter, down from 2,110 in the previous quarter.
Andres Sheppard, a senior equity analyst at Cantor Fitzgerald, suggests that the reduced production is due to the company clearing out existing inventory.
Lucid is also banking on its upcoming Gravity SUV, slated for production later this year, to fuel growth, although it will face competition from Tesla's Model X and Rivian's R1 models.
Sheppard anticipates that Lucid's cost margins will compress once they start scaling up production of the Gravity.
"We believe Lucid will face challenges in Q4 to meet its 2024 production guidance of 9,000 units," commented Garrett Nelson, a senior equity analyst at CFRA Research.
Rivian recently revised its annual production forecast downward and missed delivery estimates for the quarter, citing weak demand exacerbated by a parts shortage, while industry leader Tesla also reported underwhelming delivery figures.
In August, Lucid announced it had received up to $1.5 billion in cash from the PIF, as it aims to boost production and launch a mid-size car expected to debut in late 2026.
