Lucid to start deliveries of electric cars with a range exceeding that of Tesla in October

CASA GRANDE, Ariz., Sept. 28 (Reuters) – U.S. start-up Lucid Group Inc (LCID.O) announced on Tuesday that it will begin shipping luxury electric sedans with greater range to Tesla in late October, posing a major challenge for the leading market, whose sales of premium models have stagnated.

California-based Lucid on Tuesday began production of its delayed Lucid Air cars at its Arizona plant and said it aims to increase plant capacity to 90,000 vehicles per year over the next two years. years.

The high-end Lucid Air Dream Edition will be available at the end of October, followed by cheaper models: Grand Touring, Touring and Air Pure. The company said it has received more than 13,000 reservations for Lucid Air models and has increased the total planned production of the Lucid Air Dream Edition to 520 vehicles.

A version of the Lucid Air Dream Edition, priced at $ 169,000, received an official U.S. government rating with a range of 520 miles (837 km), more than 100 miles longer than its closest rival, the Tesla’s Model S, which is priced at $ 89,990. The upper range contributed to a 23% jump in Lucid shares this month.

Speaking at the production site, Lucid CEO Peter Rawlinson, former Tesla Model S chief engineer, said his company’s cars had a battery technology and cost advantage over the Model S.

“We have relieved clients of the fear of independence-related anxiety,” he said. “The next big hurdle is the profitability of electric cars. We need to cut costs.”

He said the Air Pure, the cheapest version with a price tag of $ 77,400, will go into production at the end of next year.

EXECUTION CHALLENGE

The company, founded in 2007, received funding from the Saudi Arabia Public Investment Fund in 2018 before going public through a shell company in July.

“(20) 17 and (20) 18 were brutal. The business was in a shaky state. And then I have to say we met a perfect partner,” he said.

Rawlinson, who left Tesla in 2012, faces similar tasks to Tesla in his early days, including how to tackle manufacturing challenges and increase production.

“I think the big challenge for Lucid will be execution,” said Sam Abuelsamid, senior analyst at Guidehouse Insights. “I think they have a very good car. It’s very attractive.”

Tesla CEO Elon Musk said in June that Tesla had canceled plans to launch a Model S Plaid +, with a target range of 520 miles, saying the Model S Plaid itself was “so good.”

Musk reiterated this month that “production is difficult.”

“Producing with positive cash flow is extremely difficult,” he said, citing the very slim margins of automakers.

Tesla’s combined sales of luxury Model S and Model X models were just 1,890 in the second quarter of this year, up from 22,300 in the same period three years ago. Tesla does not release figures for the two top-of-the-line models.

“The Model S doesn’t look fundamentally different from a Model S from nine years ago,” said Abuelsamid. “In the high end market, customers are looking for the latest and greatest.”

Musk in October 2020 reduced the price of its Model S, shortly after Lucid announced the price of its base model. “The glove has been cast! The prophecy will be fulfilled,” he tweeted at the time.

Electric vehicle maker Rivian, backed by Amazon.com Inc (AMZN.O) and currently preparing for a stock market listing, began production of electric pickup trucks this month. The move preceded similar moves expected from Tesla, General Motors Co (GM.N) and Ford Motor Co (FN).

Reporting by Hyunjoo Jin in Casa Grande, Arizona; Editing by Matthew Lewis and Kenneth Maxwell

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