Saturday, September 13, 2025

Lucid Group Slices 2022 Production Forecast By 30%-40%

Lucid Group, Inc. (NASDAQ: LCID) recently reported 4Q 2021 and full year earnings results. Given the company’s start-up status, its 4Q 2021 reported revenue of US$26 million and adjusted EBITDA loss of US$300 million are not the drivers of the stock. Instead, the company’s ability to produce its electric vehicles with efficiency and its guidance on future production are the key yardsticks. On these measures, Lucid came up far short versus general expectations and prior guidance.

Lucid delivered only 125 vehicles to customers in the fourth quarter, and as of February 28 had produced a total of ~400 cars since company inception and delivered ~300 of them to customers. Throughout 2021, the company pledged it would produce 520 vehicles in 4Q 2021 alone. No specific reason was cited for the 4Q 2021 production shortfall.

More importantly, Lucid cut its 2022 Lucid Air production forecast to 12,000-14,000 units from the 20,000 unit goal it had articulated as recently as mid-November 2021. The company cited the familiar “supply  chain constraints” and a “focus on quality” — whatever that really means — as reasons for the projected shortfall in 2022. Keep in mind that even to achieve this lower annual 2022 production level, Lucid will need to boost production rates to more than 1,000 vehicles per month from the current ~150 level.

Two points are important to keep in perspective in light of the disappointing guidance. First, even if the cars which Lucid sells this year are fully loaded and have an average sales price of US$100,000, the company’s 2022 revenue would be only around US$1.3 billion. This implies the ratio of its enterprise value (EV)-to-2022 revenue, a key financial measure for any company, is about 31x, an extraordinarily rich figure.

Second, according to the (optimistic?) projections Lucid put out last spring and included in an investor presentation as recently as July 2021,  the company could reach a multi-billion dollar EBITDA cash generation level (US$1.7 billion specifically) by 2025 if it produced and sold 135,000 cars in that year, or about 10x its estimated 2022 manufacturing level. It now seems reasonable to question whether such production can be attained and, if so, by when. Interestingly, Lucid made no mention of delivery projections beyond 2022 in its 4Q 2021 earnings release even though it had published detailed production forecasts through 2026 as recently as July 2021. 

There were a few positives that Lucid announced. For example, the company now has more than 25,000 (cancelable and refundable) reservations for the Lucid Air. If all these booking are converted to sales, that would equate to revenue of ~US$2.4 billion. Total reservations have increased from 17,000 in mid-November 2021 and 13,000 as of late September 2021.

In addition, the expansion of Lucid’s Arizona manufacturing facility is proceeding, and the company plans to commence construction of a new manufacturing plant in Saudi Arabia in mid-2022. That country’s Public Investment Fund owns more than 1 billion Lucid common shares, equivalent to about a 62% ownership stake.

The Lucid Air model is a sleek, well-reviewed vehicle. In addition, Lucid has an impressive US$6.3 billion cash balance, enough to finance electric vehicle development for quite some time. However, Lucid shares look very richly priced. If the company were still able to achieve its prior 2025 vehicle sales and cash flow projections, Lucid shares trade at a robust 24x EV-to-2025E EBITDA ratio.

Lucid Group, Inc. last traded at US$21.50 on the NASDAQ.


Information for this briefing was found via Edgar and the companies mentioned. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.

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