Lucid Group, Inc. (NASDAQ: LCID) yesterday announced disappointing 3Q 2023 production and delivery statistics. The company produced just 1,550 vehicles in the quarter, down notably from 2,173 in 2Q 2023. As a partial offset, Lucid did say that more than 700 additional vehicles are in transit to Saudi Arabia for final assembly. Lucid delivered 1,457 cars to customers in 3Q 2023, up from 1,404 in 2Q 2023.
Lucid delayed released of the data several days beyond its typical end-of-quarter schedule, so the light figures were not a complete surprise to the market.
The data points are especially concerning for two main reasons. First, after factoring in the 3Q statistics, Lucid has produced 6,037 vehicles over the first nine months of 2023. This sluggish pace suggests the company may not reach its goal of producing 10,000 cars in the full year 2023. Lucid did not discuss this oft-stated full year production target in its October 17th release, which could suggest a downward revision may be made when the company releases its 3Q 2023 financial results on November 7th.
READ: Lucid Motors Investors Feel The Pressure As Q3 Delivery Data Delayed
Second and more importantly, Lucid delivered about as many cars in 3Q 2023 as in the previous quarter, while producing and partially producing more cars, in aggregate, in 3Q 2023 versus 2Q 2023 (2,250 vehicles in total versus 2,173). The figure implies the company’s cash burn could be at least as high in the just-completed quarter as the US$904 million burned in 2Q 2023.
By our calculations, Lucid’s gross margin (revenue less cost of revenue) in 2Q 2023 was negative US$288,000 per vehicle delivered. Cash burn is defined as operating cash flow minus capital expenditures.
Since Lucid had US$5.25 billion of cash and US$3.17 billion of cash net of debt as of June 30, 2023, it is reasonable to assume the comparable figures will be about US$4.2 billion and US$2.1 billion, respectively, as of September 30, 2023. This magnitude of cash appears low for a company with such enormous near-term cash needs. As a result, Lucid’s announcing another significant equity or convertible debt offering in the next few months seems quite likely.
LUCID GROUP, INC.
| (in thousands of US $, except production/delivery unit statistics, revenue and gross profit per vehicle delivered, and for shares outstanding) | 2023 Management Guidance | Twelve Months Ended 6-30-23 | September 30, 2023 | June 30, 2023 | March 31, 2023 |
| Lucid Air Vehicles Delivered | 6,140 | 1,457 | 1,404 | 1,406 | |
| Lucid Air Vehicles Produced | > 10,000 | 10,262 | 1,550 (A) | 2,173 | 2,314 |
| Revenue | $753,476 | $150,874 | $149,432 | ||
| Revenue per Vehicle Delivered | $122,716 | $107,460 | $106,282 | ||
| Gross Profit (Revenue less Cost of Revenue) | ($1,410,627) | ($404,931) | ($351,092) | ||
| Gross Profit per Vehicle Delivered | ($229,744) | ($288,412) | ($249,710) | ||
| Operating Income | ($3,047,108) | ($837,685) | ($772,161) | ||
| Operating Cash Flow | ($2,719,603) | ($700,358) | ($801,264) | ||
| Capital Expenditures | ($1,100,000) to ($1,300,000) | ($1,025,437) | ($203,715) | ($241,770) | |
| Adjusted EBITDA | ($2,530,753) | ($710,342) | ($643,898) | ||
| Cash – Period End | Sufficient liquidity at least into 2025 | $5,249,294 | $5,249,294 | $2,978,415 | |
| Debt – Period End | $2,083,167 | $2,083,167 | $2,082,197 | ||
| Shares Outstanding (millions) | 2,282 | 2,282 | 1,833 |
A key reason why Lucid burns so much cash is the continuing large gap between its production and deliveries — due to a combination of weak demand and logistics problems. As of December 31, 2022, Lucid had produced 2,686 more vehicles than it delivered (7,180 versus 4,494) since the establishment of the company.
This differential has now widened to 4,456 as of September 30, 2023 given the 6,037 Lucid Air models produced over the first nine months of 2023 versus just 4,267 deliveries to customers over the same timeframe. Given that the average Lucid model sells for more than US$100,000, if Lucid had been able to deliver as many cars as it produced since company inception, it would have perhaps US$5 billion more in cash on its balance sheet than it currently does.
Lucid is a very expensive stock. Factoring in its 2.282 billion shares outstanding and the net cash on its balance sheet, Lucid’s enterprise value (EV) is about US$8.2 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 11x.
Lucid Group, Inc. last traded at US$5.00 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.
