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EV maker Lucid beats first-quarter delivery estimates as price cuts boost demand

April 9, 2024 9:08 AM

By Zaheer Kachwala

(Reuters) -Lucid reported first-quarter deliveries above market expectations on Tuesday as price cuts helped boost demand for its luxury electric sedans, sending its shares up about 3%. The electric-vehicle startup handed over 1,967 vehicles in the first quarter, compared with estimates of 1,745, according to eight analysts polled by Visible Alpha.

Lucid in February had cut prices of its flagship Air sedans by 1% to 10% to support demand at a time when consumers are rethinking EV purchases and turning to more affordable hybrid alternatives due to high interest rates.

While Rivian Automotive also beat estimates for quarterly deliveries last week, worries about overall EV demand have deepened after U.S. market leader Tesla reported a quarterly decline in deliveries for the first time in nearly four years earlier in April and missed expectations.

Lucid made 1,728 vehicles in the quarter ended March 31, below estimates of 2,123, and compared with 2,391 in the preceding three months.

"In the second half of this year, Lucid is going to continue to ramp up deliveries to Saudi Arabia. I do see them improving both production and deliveries throughout the rest of the year," said Andres Sheppard, senior equity analyst at Cantor Fitzgerald.Lucid said in February it plans to introduce a mid-size car late in 2026 to attract a broader customer base. The vehicle will target a $50,000 price point, a highly competitive pricing range that includes Tesla's Model Y electric vehicle.

Tesla, meanwhile, has scrapped plans for its inexpensive car, Reuters reported last week. Lucid said last month it was raising $1 billion in capital from Ayar Third Investment Co, an affiliate of Saudi Arabia's Public Investment Fund. The capital injection could give the firm an advantage over other cash-strapped EV startups that are dealing with expensive production ramp-ups.

(Reporting by Zaheer Kachwala in Bengaluru; Editing by Vijay Kishore)

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