Lucid Motors is hitting a major roadblock. The electric vehicle maker, known for its high-end Air sedan, announced it's retracting its production and sales forecast for the year. This move comes after the company posted a staggering $1 billion net loss in the first quarter and was forced to recall its new Gravity SUV due to a critical safety defect.
During a recent earnings call, Lucid's Chief Financial Officer, Taoufiq Boussaid, described the decision to pull the forecast as a "governance decision." He insisted the company isn't facing production limitations, stating, "We are not constrained by capacity. We are constrained by our own discipline not to build inventory ahead of demand. As market conditions develop, we will scale production accordingly."
This uncertainty marks a significant step back for the EV startup. Just last month, Lucid had confidently reiterated its goal to produce 25,000 to 27,000 vehicles in 2026. While this would have been an increase from the 18,000 cars sold last year, it's a far cry from the hundreds of thousands of vehicles projected when Lucid went public back in 2021.
The new Gravity SUV was positioned as Lucid's "silver bullet"—the vehicle that would propel the brand into the high-volume market. However, its launch has been marred by a recall that halted sales for 29 days. This production pause is being cited as a primary driver for the company's disappointing first-quarter performance.
View Price on AmazonThe recall, issued in April, affects nearly 4,500 Gravity SUVs. The issue stems from an improperly positioned weld on the second-row lap seatbelt anchor, which could rupture in a crash, posing a serious safety risk. Lucid has pointed the finger at its seat supplier, claiming unapproved design changes were made to the component. The company assured that SUVs built after February 14 are not affected by the defect.
The sales halt and subsequent recall have left Lucid with a surplus of vehicles. The company is now in the difficult position of having to carefully manage its production output to avoid an even larger backlog of unsold cars sitting on lots, a costly problem for any automaker.
This setback comes at a critical time. Lucid is planning to launch its first truly mass-market vehicle, a mid-size crossover reportedly named the "Cosmos," with a target price under $50,000. Production is slated to begin at its facility in Saudi Arabia by the end of this year. Despite current challenges, Lucid stated on the earnings call that it is "on track for production ramp-up of the mid-size [model] in 2027."
Source: insideevs.com
