Lucid EV, the embattled electric vehicle (EV) maker, reported its second-quarter earnings, which fell short of Wall Street estimates. However, despite missing expectations, the company’s results were strong enough to boost its shares in after-hours trading on Monday.
The company posted a per-share loss of 40 cents on sales of approximately $151 million for the second quarter. Analysts had anticipated a per-share loss of 34 cents on sales of $182 million. Following the earnings announcement, Lucid’s stock initially dropped by 3.2% during regular trading hours but rebounded with a 3.9% gain in late trading, while the broader market saw modest gains.
While the second-quarter earnings were noteworthy, the more significant news from Lucid was its confirmation that it remains on track to produce over 10,000 units. This aligns with its recent guidance, although earlier this year, analysts had expected the company to manufacture closer to 20,000 units. The downward revision in production estimates has contributed to the challenges faced by Lucid, as evidenced by the stock’s year-to-date decline of around 6% and a staggering 64% drop over the past 12 months.
In terms of financials, Lucid ended the quarter with more than $5 billion in cash reserves. The company utilized roughly $900 million in cash for business operations during the second quarter. Analysts project that Lucid will continue to consume around $1 billion per quarter. Positive free cash flow is not anticipated until later in the decade, and its realization is contingent upon increasing sales.
Regarding sales figures, Lucid sold 2,810 vehicles in the first half of 2023 and produced 4,487, leaving approximately 5,500 units to fulfill its guidance. The lag in sales compared to production is not favorable for any automaker.
Overall, while Lucid’s second-quarter earnings fell short of expectations, the optimistic forecast for production numbers provided some support to the company’s stock price. As Lucid continues to navigate the EV market, its ability to deliver on its revised production guidance and achieve positive cash flow will be critical for restoring investor confidence and driving long-term success.
