Lucid to cut 1,300 workers amid signs of flagging demand for its EVs

Lucid Motors CEO Peter Rawlinson poses on the Nasdaq MarketSite as Lucid Motors (Nasdaq: LCID) begins buying and selling on the Nasdaq inventory change after finishing its enterprise mixture with Churchill Capital Corp IV in New York Metropolis, New York, July 26, 2021.

Andrew Kelly | Reuters

Struggling EV maker Lucid stated in a regulatory submitting on Tuesday that it plans to chop about 18% of its workforce, or roughly 1,300 workers, as half of a bigger restructuring to scale back prices as it really works to ramp up manufacturing of its Air luxurious sedan.

Lucid stated it would incur one-time expenses totaling between $24 million and $30 million associated to the job cuts, with most of that quantity being acknowledged within the first quarter of 2023.

Information of the job cuts was first reported by Insider earlier on Tuesday. Lucid’s shares closed down over 7% on Tuesday following the Insider report.

In a letter to workers, CEO Peter Rawlinson stated the job cuts will hit “practically each group and degree, together with executives,” and that affected workers shall be notified over the subsequent three days. Severance packages will embody continued healthcare protection paid by Lucid, in addition to an acceleration of fairness vesting, Rawlinson wrote.

Lucid ended 2022 with about $4.4 billion in money available, sufficient to final till the primary quarter of 2024, CFO Sherry Home informed CNBC final month forward of the corporate’s fourth-quarter earnings report. However there have been indicators that demand for the high-priced Air has fallen in need of Lucid’s inside expectations, and the corporate could also be struggling to transform early reservations to bought orders.

Lucid stated that it had greater than 28,000 reservations for the Air as of Feb. 21, its most up-to-date replace. But it surely additionally stated that it plans to construct simply 10,000 to 14,000 autos in 2023, far fewer than the roughly 27,000 that Wall Road analysts had anticipated.

With Lucid’s manufacturing facility at the moment set as much as construct about 34,000 autos per 12 months, the corporate has warned of continuous losses.

“As we produce autos at low volumes on manufacturing traces designed for greater volumes, we’ve got and we are going to proceed to expertise unfavourable gross revenue associated to labor and overhead prices,” Home stated throughout Lucid’s earnings name on Feb. 22.

Lucid hasn’t but introduced a date for its first-quarter earnings report.

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