EV maker Lucid sticks to annual production target

(Reuters) -Luxury electric vehicle maker Lucid Group stuck to its annual production target after it missed quarterly revenue estimates, sending its shares higher by about 4% in extended trading.

Lucid’s deliveries in the second quarter were unchanged from the prior three months at 1,404 units, while its production fell 6% from the first quarter as it struggled to ramp up.

Electric vehicle makers have been battling supply chain challenges to ramp up production.

Competition from Tesla (NASDAQ:)’s Model S, whose prices were cut earlier this year, and rising borrowing costs have posed a threat to Lucid’s growth. In response, Lucid slashed prices for its Air luxury sedan as part of a special offer on Saturday.

Tesla’s price war and rising interest rates sent ripples through the EV industry, making it difficult for money-losing startups such as Lucid, which also face competition from traditional automakers launching electric models, to grab market share.

Lucid has also been struggling with rapid cash burn, prompting it to raise $3 billion through a stock offering, nearly two-thirds of which came from majority-owner Saudi Arabia’s Public Investment Fund.

Lucid reported revenue in the April-June period of $150.9 million, missing estimates of $175 million, according to seven analysts polled by Refinitiv.

Electric vehicle companies such as Lucid are burning crucial capital at a rapid pace as they look to ramp up production.

The company had trimmed its 2023 production forecast in May and now expects to produce over 10,000, a projection it reiterated on Monday.

Lucid’s loss in the second quarter stood at $764.2 million, compared with $555.3 million a year earlier.

The company’s cash balance at the end of the second quarter stood at $2.78 billion, compared with $900 million, at the end of the year’s first three months.