Written by Cláudio Afonso | LinkedIn | X
The cash burn rate of the EV maker Lucid Motors remains “extremely troubling” while the company is forced to “resort to steep price cuts to sell units,” CFRA analyst Garrett Nelson said in a new research note released on Monday.
A few hours after the California-based carmaker reported a new quarterly record in vehicle deliveries and an annual production exceeding the 9,000-unit guidance communicated in early 2024.
“We maintain our 12-month target of $1. We raise our adjusted EPS [earnings per share] views to -$1.12 from -$1.15 for 2024 and to -$1.10 from -$1.20 for 2025. LCID reported Q4 vehicle production and deliveries of 3,386 units and 3,099 units, respectively,” the analyst wrote. “These totals were ahead of our respective production and delivery forecasts of 3,357 units and 2,400 units.”
Despite admitting better-than-expected production and delivery figures, CFRA’s price target, based on Monday’s closing price, suggests a 70% downside for Lucid’s stock.
The analyst says Lucid’s cash burn rate averages between $700 million and $800 million per quarter, adding the company “lacks the size and scale to compete with larger automakers” citing a production rate of “only 37 vehicles per day” between October and December.
In the research note, Garrett Nelson also said the company “had to resort to steep price cuts to sell units” noting that the “average vehicle price realizations dropped by almost $16,000 between Q1 and Q3.”
“Following the record-high quarterly deliveries total, LCID managed to hit its 2024 production guidance of 9,000 units,” the analyst noted before commenting on the stock performance. “LCID shares have rebounded sharply since hitting a record low of just under $2/share in mid-February, and we lower our opinion one notch to Strong Sell,” he wrote.
Lucid produced 3,386 vehicles in the fourth quarter of 2024, marking a 42% year-over-year increase compared to the same period in 2023 (2,391 units) and allowing the company to exceed its annual production guidance of 9,000 units, with a total of 9,029 vehicles produced in 2024.
In the U.S., its main market, Lucid set a new monthly sales record in December, marking its second consecutive monthly high with 780 units sold, an increase from the 712 vehicles sold in November.
Lucid’s chief executive, Peter Rawlinson, ended 2024 by taking delivery of his own Gravity SUV, becoming one of the first owners of the company’s second model. The EV maker shared the moment on social media, calling it an “extra special delivery” to close out the year.
Once additional units are shipped to showrooms and made available for test drives, the company will begin customer deliveries in the U.S. while European deliveries are planned to start in early 2026.
Written by Cláudio Afonso | LinkedIn | X
