Lucid’s $227,802 EV Loss Leader

The electric-vehicle startup is struggling to find buyers for its cars

WSJ editorial. 

"Ford Motor Co. lost $62,016 on each electric vehicle it sold during this year’s third quarter. But that looks like a business success compared to

Lucid

Motors, the luxury electric-vehicle maker. On Tuesday the EV startup reported losing $227,802 per car sold in the latest quarter. 

Like several other EV startups, Lucid went public during the pandemic through a merger with a blank-check company. In November 2021, it reached a stunning market value of $91 billion despite having delivered only 125 cars in its history. It’s been downhill since. Lucid’s stock price has fallen 93% from its peak as losses mount.

In the third quarter, it reported a $630.9 million net loss and $227,802 per car sold, not accounting for its overhead costs. It also cut its production forecast “to prudently align with deliveries”—which in plainer English means demand for its pricey EVs is flagging.

Who would have thought that millions of Americans would not be lining up to pay $125,000 for an EV? Lucid last week slashed prices to jolt demand, but its “affordable” EV still costs $74,900, which is beyond the budgets of most households. The high prices also disqualify buyers from tapping the $7,500 federal tax credit for EVs.

Lucid nonetheless assured investors that it still has $5.5 billion in cash to burn on making cars that consumers don’t seem to want. Lucid’s largest shareholder, Saudi Arabia’s Public Investment Fund, has poured billions into the company to keep it afloat. It’s no small irony that oil profits are financing an EV unicorn.

By the way, Lucid recently opened a new production facility in Saudi Arabia, whose government has pledged to buy 100,000 of its vehicles. These will run on electricity produced almost entirely by oil and natural gas power plants. Remind us, again, how EVs are supposed to benefit the climate?

This week another EV unicorn, Rivian, reported a $30,648 loss in the third quarter, which was down from $67,329 in the first quarter and $124,162 in the one before that. So maybe there’s hope that Lucid can cut its losses. Still, as the chief financial officer of

Mercedes-Benz

noted recently, EVs are “a pretty brutal space” and “I can hardly imagine the current status quo is fully sustainable for everybody.”

Brutal indeed. Rarely has an industry been so heavily subsidized to make a product that so few consumers want or can afford to buy."