Lucid Motors, the EV startup, recently provided an update on the production of its critical Gravity SUV during its second-quarter earnings report. The company’s CEO, Marc Winterhoff, expressed concerns about the slow ramp-up of production for the Gravity SUV, stating that it was not meeting the company’s targets for the year. Winterhoff attributed this sluggish output to two main factors: capacity constraints from suppliers and a limited supply of magnets from China.
The constrained supply of Chinese magnets was a result of China’s export restrictions on rare earth magnets, which are essential components in electronic motors, including those used in EVs. To address this issue, Lucid was able to source alternative magnets and secure enough supply to support production through the end of the year. As a result, the company revised its annual production guidance to 18,000-20,000 units, down from the initial target of 20,000 units.
Despite the production challenges, Lucid reported a revenue of $259 million for the quarter but also disclosed an adjusted EBITDA loss of $632 million. The company’s shares experienced a 9% decline after the market closed, reflecting investor concerns about the production delays.
The Gravity SUV is crucial to Lucid’s growth plans, as it is the company’s first SUV and is expected to drive higher sales than its current Air sedan. The successful production and delivery of the Gravity are vital for Lucid as it aims to scale up its manufacturing operations and achieve profitability.
Winterhoff reassured investors that Lucid is working to overcome the supply chain challenges and expects production to significantly increase in the second half of the year. Additionally, the company remains on track to introduce a midsize SUV in 2026, priced at around $50,000, with plans to unveil the model next year.
The difficulties faced by Lucid highlight the broader challenges that EV startups are encountering in navigating the shifting policies and trade dynamics under the current administration. Despite these obstacles, Lucid remains focused on expanding its product lineup and increasing production to meet the growing demand for electric vehicles.
In conclusion, Lucid Motors’ efforts to address production challenges for the Gravity SUV reflect the company’s commitment to achieving its growth targets and establishing a strong presence in the EV market. As the industry continues to evolve, Lucid remains determined to innovate and deliver high-quality electric vehicles to its customers.