Analyst Flags 2 Worries After Tesla Rival's Cash Burn, EV Price Hikes

Analyst Flags 2 Worries After Tesla Rival’s Cash Burn, EV Price Hikes

Lucid (LCID) affirmed its 2022 production target after the aspiring Tesla (TSLA) challenger delivered 360 Lucid Air EVs in the first quarter, amid supply disruptions. Lucid stock edged higher Friday.


For Q1, Lucid posted nearly $58 million in revenue, driven by 360 EV deliveries during the quarter, the startup said in its late Thursday earnings release. That suggests a small ramp from 125 EV deliveries in Q4 2021 amid “global supply chain and logistics challenges, including Covid-related factory shutdowns in China,” according to the company statement. Lucid began deliveries of the luxury Air electric sedan on Oct. 30 last year.

Lucid reported 30,000 Air EV reservations as of May 5. That was up from 25,000 reservations in February and represents a total of $2.9 billion in potential sales.

In addition, LCID maintained its previously lowered 2022 production target of 12,000-14,000 EVs. However, it announced Thursday price hikes by as much as 13% for new reservations starting in June.

LCID’s quarterly cash burn totaled $870 million, leaving it with $5.39 billion of cash at the end of Q1, which will fund the company into 2023, Thursday’s release said.

In a note to clients Friday, CFRA analyst Garrett Nelson flagged Lucid’s “challenges in terms of achieving significant sales volumes given its vehicle pricing and a likely future capital raise.” These offset the quality of the Lucid Air EV, Saudi Arabian support and new factory in Arizona, he said.

Nelson maintained a hold opinion on LCID stock but cut his price target by $5 to $20 a share.

Lucid joined EV startups Fisker (FSR) and Nikola (NKLA) in reaffirming key production and delivery targets, despite the global chip shortage.

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Lucid Earnings

Estimates: Analysts polled by FactSet expected Lucid to lose 33 cents per share on revenue of $55.6 million. There are no year-ago figures.

Results: Lucid lost 5 cents a share on revenue of $57.7 million.

Outlook: Analysts expect Lucid to sharply narrow net loss per share to $1.22 for the full year from a loss of $6.41 a share in 2021. Revenue is seen ballooning to $1.275 billion in 2022 from $27.1 million last year. The 2021 figures are for only three quarters.

Arizona-based Lucid began producing the award-winning, luxury Lucid Air in fall 2021. But it has run into significant supply and logistics challenges, like other automakers.

Starting in June, Lucid will hike price hikes for various Air models by as much as 13%.

“Looking forward, we remain intently focused on ramping production,” Lucid CEO Peter Rawlinson said in Thursday’s release.

On April 26, Lucid announced that Saudi Arabia’s government will buy up to 100,000 Lucid EVs over 10 years. The Saudi sovereign wealth fund is a top LCID stakeholder. Rawlinson called the deal “another pivotal moment” for his company, which Wall Street generally views as a viable Tesla competitor.

Lucid Stock, Nikola Stock

Lucid stock fell 3.8% to 18.14 the stock market today, trading well below key levels of technical support. Shares of Lucid fell nearly 7% Thursday before the earnings report.

Nikola stock fell more than 9% Friday after jumping 6.4% Thursday. Fisker stock jumped 4.7% after losing 6.1% Thursday.

All three new EV stocks remain mired far below their 200-day lines. The relative strength lines for Lucid stock and its EV startup peers show serious lag, a sign of underperformance vs. the S&P 500 index.

Tesla stock initially rallied 1.5% Friday, then fell to narrow losses. Shares fell more than 8% Thursday.

Nikola, Lucid Updates

On Thursday, Nikola announced it began produced the Tre electric semi-truck on March 21. NKLA continues to expect 300-500 EV deliveries this year. The EV startup is testing a longer-range hydrogen-powered Tre truck, due in the second half of 2023.

In Q1, net loss widened to 21 cents a share from 14 cents a year ago. Nikola reported $1.9 billion in services revenue. Analysts were expecting Nikola to lose 25 cents per share on token revenue.

In September 2020, short seller Hindenburg Research targeted Nikola stock, accusing it of “an ocean of lies.” Nikola now runs under new top management.

Late Wednesday, Fisker affirmed it expects to start producing the Ocean SUV Nov. 17. It’s partnering with Magna (MGA) on production. Fisker reported Ocean reservations now stand at more than 45,000, up roughly 50% from February.

In Q1, Fisker lost 41 cents a share vs. estimates for a loss of 39 cents and a loss of 11 cents a year ago.

Find Aparna Narayanan on Twitter at @IBD_Aparna.


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