Key facts
- Lucid aims to achieve $1.4 billion in cash savings by 2026.
- Savings will be driven by production and inventory cuts, reduced capital expenditure, and lower operating expenses.
- The company reported a second-quarter loss of $2.78 per share, wider than expected.
- Second-quarter revenue increased to $405 million but missed analyst forecasts.
- Lucid expects sufficient liquidity to extend well into 2027 due to recent financing and operational changes.
U.S. electric vehicle manufacturer Lucid announced on Tuesday its intention to save $1.4 billion in cash by 2026. This initiative is part of a broader business review aimed at addressing mounting losses, particularly following a second-quarter earnings report that showed a wider-than-expected loss and revenue below analyst estimates.
The cost-saving plan includes a deliberate reduction in production to align output with anticipated demand, projected to cut inventory by $600 million to $800 million. Additionally, Lucid plans to decrease capital expenditure by approximately $500 million and operating expenses by $200 million, with recent workforce reductions expected to contribute about $158 million annually.
These measures come as U.S. EV makers grapple with decreased demand following the expiration of key tax credits. Lucid is also focusing on developing a mid-size vehicle platform and pursuing a robotaxi service through partnerships, but currently prioritizes cost control until these ventures generate revenue.
Lucid, backed by Saudi Arabia's Public Investment Fund, recently announced workforce reductions and appointed Silvio Napoli as CEO. A regulatory filing also revealed that Saudi billionaire Prince Alwaleed bin Talal Al Saud acquired a 5% stake in the company.
The company stated that recently secured financing, combined with operational actions, is expected to provide sufficient liquidity well into 2027. For the quarter ended June, Lucid reported a 56% rise in revenue to $405 million, while its adjusted loss per share increased to $2.78 from $2.35 a year prior.