Some Automakers Soften On EVs, But Lucid Charges Forward

It’s almost as if 2024’s setting up to be a come-to-Jesus moment for EVs, as manufacturers ask what level of growth is truly sustainable for an electrified future. Overspending on development for returns that aren’t happening as fast as expected is leaving manufacturers with a dilemma: Do we press forward, or slow-roll existing plans? GM, Ford, and more are all scaling back their EV plans in the face of softer-than-expected (but growing) demand. Just recently, Elon Musk was candid with shareholders that he does not expect Tesla to be able to sustain the same level of growth it saw in 2023. 

One company is adamant that it has the chutzpah to go the distance: Lucid. Last week, during a candid conversation with Lucid Motors CEO and CTO Peter Rawlinson at its Arizona factory, Rawlinson was very optimistic about Lucid’s position in the face of the rest of the industry. As other manufacturers soften and scale back, it’s full steam ahead at Lucid Motors, even after a year where the brand underdelivered.

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Lucid CEO Peter Rawlinson sees a bright future

Lucid Motors missed its manufacturing and sales targets for 2023, and its stock price faced similar headwinds. However, Lucid’s CEO and CTO Peter Rawlinson insists that a plant expansion, forthcoming new products, smarter communications strategy, and other behind-the-scenes investments are things that have set Lucid up for a stronger future.

“I think it’s a weird time, I think that macroeconomics and high-interest rates are really, really affecting luxury car sales,” said Rawlinson, admitting that Lucid’s missed targets disappoint everyone, including himself. But Rawlinson asks us to reframe Lucid’s numbers. In the US, the Lucid Air outsold cars like the BMW i7 (which was, admittedly, in its first year on sale) and is about one to two thousand units behind cars like the Mercedes-Benz EQS and Porsche Taycan. Although its 6,001 sales for 2023 were below its expectations, year-over-year, the Air has increased by 37%. Rawlinson notes that in the same time period, Tesla Model S sales declined. Likewise, he admitted that a simplified lineup and more competitive price structure for the 2024 model year may help the Air’s sales. 

Rawlinson claims that its factory expansion and other long-term investments will pay off in 2024. 

“There’s undue doom and gloom about electric cars; electric vehicles are the future. There are a lot of subpar EVs out there, and I believe that this is a tech race, and we’re in for the long haul,” said Rawlinson. Rawlinson says that there’s a lot of future-proofing and investment associated with sustainable mobility and electric cars that go beyond just Lucid’s financial statements. The Gravity and Midsize launches are also big opportunties for the brand, with Rawlinson suggesting they’ll put the brand ahead of the pack.

Other OEMs are rethinking the EV revolution, perhaps waffling back toward ICE and hybrid options. Lucid, though, is built to make EVs, and it can now make a lot of them. The company’s expanded factory can produce the Air and Gravity on the same line, which should help satisfy demand in new markets like China and Western Europe.

“Chinese market cars have to have their VINs stamped on the passenger floor, if the stamping isn’t explicitly clear, the cars will be rejected at import,” plant director Steven Inglis said as we toured the Arizona facility, highlighting just one of the challenges the plant faced as it geared up for foreign-market production.

Perhaps these are charitable reads on Lucid’s somewhat lackluster 2023, from leaders who view the company’s success as an imperative. From their hopeful comments, the sky is the limit for Lucid. However, some analysts remain more conservative in the face of market realities. “The Air and Gravity are very neat EVs, but they are priced out of reach for most new car shoppers, “ Ed Kim, president of auto market analysis firm AutoPacific, told InsideEVs via email.

Like Rawlinson, Kim doesn’t see the relative softening of still-growing EV demand as a death knell for electric cars entirely, as some anti-EV pundits suggest. Rather, it’s a symptom of badly planned product lineups, via an overemphasis on high-end luxury products, a problem that Lucid is a part of.

“The softening in the rate of adoption is a reflection of other factors, such as too many EV nameplates clustered at luxury price points (even for non-lux EV nameplates) and a resulting lack of affordable EV models that are needed to keep the rate of adoption going,” wrote Kim. “AutoPacific’s own data from the Future Attribute Demand Study (FADS) show that price is one of the top reasons that EV rejectors cite as a reason for not going electric. When those same people are asked what price point they’ll consider an EV, the data show that demand rises sharply below $35,000. As affordable and appealing new affordable EVs enter the market in the coming years, we expect the rate of EV adoption to soar,” he continued.

The Chevrolet Bolt EV and EUV’s roughly $30,000 price resonated so hard with consumers that they continued to set sales records despite GM announcing its death, prompting executives within the company to make a way for the car to return. The Tesla Model Y is the best-selling car in the world for a reason. It’s very close to the $35,000 price ceiling with the federal tax credit and can slip under it with state-level incentives. Granted, Lucid’s midsize car with a targeted starting price of $50,000 is above that $35,000 sweet spot, but it’s certainly a hell of a lot more affordable than the easily six-figure range of the Air sedan and forthcoming Gravity crossover. “If Lucid’s future midsize products incorporate most of what makes the Air and Gravity so desirable, Lucid has a great opportunity to grow and expand to the mainstream with strong appeal,” wrote Kim. 

Lucid’s mainstream aspirations could seem strange considering its hyper-lux roots. This move downmarket could interpreted by some as a sales-starved brand pivoting to boost its flagging numbers, at the expense of brand image. The announcement certainly raised eyebrows. 

Rawlinson sees it differently. In a relative sense, he says that Lucid has always had affordable products. True, the Air sedan’s not cheap, but when compared to its direct big sedan EV rivals, the Air solidly undercuts the EQE and EQS. “I think we need to do a better job in comms,” said Rawlinson. If it wants to succeed in selling cheaper models, Lucid has to make sure consumers know that it isn’t sticking to the ultra-luxury space. 

Will that be enough to get Lucid from slow trot to full sprint? The path seems treacherous, but the Lucid team’s ready to put up a fight.

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