Lucid Motors was simply months away from releasing its most inexpensive electrical car but, a crossover SUV known as the Cosmos that was supposed to begin underneath $50,000. However this week, the corporate pushed the release of the Cosmos again by virtually a full 12 months to the second half of 2027, a part of an effort by its new CEO to keep away from the standard issues that Lucid has suffered with its current EVs.
It’s the newest setback for the corporate, which has struggled to search out greater than a distinct segment buyer base for its costly, however technologically spectacular, automobiles. And it’s one which CEO Silvio Napoli introduced as essential for the corporate to outlive.
“Whereas there isn’t a query that Lucid introduced main improvements and excellent merchandise to the market, now we have dissatisfied on a number of fronts, and for much too lengthy,” Napoli mentioned this week. “We’ve not executed constantly. We missed commitments, launched merchandise earlier than they have been prepared, underinvested in service, responded too slowly to high quality points, and allowed complexity to gradual choices down.”
Napoli’s sober evaluation, which he provided on the corporate’s second-quarter earnings name, helps clarify why he has taken an axe to the corporate’s management construction and total workforce.
A number of executives have left since he formally took over on June 1, together with Senior Vice President of Finance Gagan Dhingra, whose departure was disclosed on the backside of the corporate’s second-quarter monetary submitting with the Securities and Trade Fee (SEC) on Tuesday. Napoli has changed these outgoing executives with a wholly new C-suite as he embarks on a cost-cutting mission aimed toward reaching $1.4 billion in financial savings by the top of this 12 months.
Napoli additionally lower 18% of Lucid’s overall workforce in June, following a 12% layoff earlier this 12 months earlier than he got here on board. He canceled a second shift at Lucid’s manufacturing unit in Arizona, citing decrease demand for the corporate’s EVs — together with its Gravity SUV, which has not taken off as the corporate anticipated regardless of being a extra well-liked type issue than its first EV, the Air sedan.
The Cosmos had been seen by some as a light-weight on the finish of the tunnel. It’s alleged to be the primary of a number of vehicles constructed on Lucid’s next-generation “mid-size” EV platform, which is smaller and cheaper to construct. The a lot lower cost tag is meant to assist Lucid appeal to extra prospects and attain larger gross sales volumes.
However Napoli appears apprehensive that the upside of getting the Cosmos EV to market might be negated if Lucid doesn’t get the launch proper.
Although he didn’t explicitly title the SUV, Napoli mentioned on the decision this week that he delayed Cosmos as a result of he doesn’t wish to run into the identical type of issues Lucid has had with earlier automobiles, clearly referring to the Gravity.
The corporate has struggled with construct high quality and software program points on the Gravity. Issues received so unhealthy at one level that Napoli’s predecessor, interim CEO Marc Winterhoff, apologized to Lucid house owners.
“We won’t repeat the errors of the previous by bringing a product to market earlier than it’s prepared,” Napoli mentioned on the decision.
The choice to delay Cosmos will possible disappoint some prospects who have been hoping to purchase one by the top of this 12 months. However the delay, mixed with the choice to decrease manufacturing in Arizona, can also be affecting Lucid’s provide base.
Within the firm’s quarterly filing with the SEC, it wrote that “decrease manufacturing volumes or demand, or reductions in our projected manufacturing volumes, have negatively affected, and will proceed to adversely have an effect on, {our relationships} with current suppliers, who might search to extend pricing, assert contractual or different claims, or in any other case fail to carry out or adjust to contractual obligations.”
Napoli’s large “reset” of Lucid Motors means the corporate now has to tread water for an additional 12 months till the Cosmos EV goes into manufacturing. The corporate mentioned Tuesday that it has “ample liquidity runway effectively into 2027.” However it additionally warned Wall Avenue analysts that it’s going to construct and promote fewer automobiles this 12 months than it had beforehand predicted. Because of this, the corporate’s inventory worth plummeted greater than 15% on Wednesday.
With Cosmos delayed, there’ll now be much more consideration on Lucid’s deliberate robotaxi service with Uber and Nuro, which is meant to launch by the top of this 12 months. Napoli known as it a “prime precedence and, certainly, a must-win mission for Lucid” on Tuesday’s name.
As a part of that collaboration, Uber has ordered 10,000 Gravity SUVs that shall be retrofitted with autonomous car tech from Nuro. Uber has additionally ordered 25,000 robotaxis based mostly on Lucid’s mid-size platform, although these aren’t anticipated to enter manufacturing till late 2028.
Uber CEO Dara Khosrowshahi mentioned on his firm’s personal earnings name Wednesday that Napoli is “taking some daring steps to return to the basics” at Lucid, and mentioned he believed the restructuring is “essential” and “constructive.”
Khosrowshahi additionally identified that Lucid’s majority proprietor — Saudi Arabia’s Public Funding Fund — is a significant investor in Uber, and mentioned the Kingdom is “the definition of a long-term elementary investor.”
“We expect the mix of ourselves, Nuro, and the Public Funding Fund backing Lucid, together with the actions that Silvio is taking, are type of the precise method for them to ship on the commitments that now we have on the books with them,” Khosrowshahi mentioned.
If you buy by hyperlinks in our articles, we may earn a small commission. This doesn’t have an effect on our editorial independence.
