Despite reassuring comments regarding customer demand expressed by Lucid Group’s (NASDAQ: LCID) CEO throughout much of 2023, hard data continues not to back up such rhetoric. The most recent example is U.S. vehicle registration data compiled by Automotive News.
In July, U.S. customers registered only 348 Lucid Air models, down 40% from a monthly average of 574 registrations over the first half of 2023. While July data of course represents only one-third of 3Q 2023, the decline in registrations suggests that Lucid may struggle to deliver as many vehicles in 3Q 2023 as it did in the first two disappointing quarters of 2023. After all, average U.S. monthly registrations of 574 in the first six months of this year translated into average monthly deliveries of 468 units.
Registration, Production and Delivery Data for Lucid and Rivian
|July 2023||1H 2023 Monthly Average||1H 2023|
|New Electric Vehicle Registrations||348||574||3,441|
|Vehicles Delivered to Customers||468||2,810|
|New Electric Vehicle Registrations||2,750||2,602||15,609|
|Vehicles Delivered to Customers||3,431||20,586|
It appears that Tesla’s aggressive 2023 price cutting policy has significantly affected Lucid’s sales For example, Tesla, Inc.’s (NASDAQ: TSLA) Model S sedan, which has an estimated driving range of 405 miles and has a base price of around US$75,000, is about US$7,400 less expensive than the Lucid Air’s US$82,400 sticker price. The Lucid Air’s range is 410 miles.
In contrast, Rivian Automotive, Inc. (NASDAQ: RIVN), another electric vehicle startup with a large market capitalization, is experiencing rising vehicle registrations. In July, U.S. customers registered a total of 2,750 R1T electric pickup trucks and R1S electric SUVs, up 6% from the 2,602 monthly average over the first half of 2023.
The R1T and R1S models carry base prices of about US$75,000 and US$78,000, respectively. The Rivian pickup truck has a range of about 270 miles, and the SUV can travel around 300 miles on a full charge.
Lucid burned US$904 million of cash in 2Q 2023 (defined as operating cash flow less capex). Over the twelve month ended June 30, 2023, aggregate cash destruction exceeded US$3.7 billion. Lucid expects to produce roughly the same number of vehicles in 2H 2023 as it did in 1H 2023, and the July registration data does little to suggest that estimate could be exceeded. Consequently, there are few reasons to believe that Lucid’s quarterly cash burn rate will deviate greatly from a US$0.9 billion-US$1.0 billion pace in 3Q 2023 — and in 4Q 2023.
Despite its single-digit share price, Lucid remains a very expensive stock. Factoring in its 2.282 billion shares outstanding and US$3.15 billion of net cash on its balance sheet, Lucid’s enterprise value (EV) is about US$10.4 billion. The company’s revenue over the twelve months ended June 30, 2023 totaled just over US$750 million, meaning the stock trades at an EV-to-revenue multiple of around 14x.
Phrased another way, Lucid’s adjusted EBITDA loss over the last twelve months is more than US$2.5 billion, and quarterly losses have been steepening: US$710 million in 2Q 2023; US$644 million in 1Q 2023; US$624 million in 4Q 2022; and US$553 million in 3Q 2022. Given this worrying trend, investors’ assigning a US$10+ billion EV to Lucid is difficult to justify.
Lucid Group, Inc. last traded at US$5.92 on the NASDAQ.
Information for this story was found via Edgar and the sources and 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.