Lucid reported its first earnings under incoming Chief Executive Silvio Napoli on Tuesday, with results missing Wall Street estimates.
The Saudi-backed EV maker delivered 3,093 vehicles, generated $282.5 million in revenue, suspended its full-year guidance, and disclosed a gross margin of negative 110.4%.
It also confirmed that pro-forma liquidity stands at approximately $4.7 billion after the $1.05 billion April capital raise and the expanded delayed draw term loan from the Public Investment Fund.
The quarter ended with a net loss of $1.03 billion and a free cash flow of negative $1.44 billion.
Lucid missed estimates compiled by LSEG on both loss per share ($3.46 vs. $2.64) and revenue ($282.5 million vs. $440.4 million).
Behind those numbers sits a story of operational disruption, a leadership handover, an expanded autonomy partnership, and a midsize program that management continues to position as the route out of structural unprofitability.
The Stop Sale
The dominant operational event of the quarter was the temporary halt of Lucid Gravity deliveries in February.
The pause was triggered by a defective second-row seat-belt anchor traced to seat supplier Camaco Automotive, which had altered its manufacturing process without authorization.
As EV reported in early April, the recall affected more than 4,000 Lucid Gravity SUVs built before February 14.
The disruption produced a 2,407-vehicle gap between production and delivery in the quarter.
Lucid produced 5,500 vehicles, up 149% year over year, but delivered only 3,093 — flat against Q1 2025.
Chief Financial Officer Taoufiq Boussaid said finished vehicles “sat in inventory pending validation rather than converting to revenue.”
Inventory swelled to $1.47 billion at quarter end, up from $1.1 billion in December, and the company recorded more than $200 million in inventory impairments.
Order intake recovered sharply once deliveries resumed, according to the EV maker.
Lucid announced a 144% sequential increase in North American orders in March, with the Gravity driving the majority of demand.
March deliveries were the highest for any March in company history, up 14% year over year.
“First quarter results demonstrated the strength of our technology and product portfolio. A supplier issue resolved during the quarter had an impact, but January and March deliveries were ahead of the same periods in the prior year,” interim Chief Executive Marc Winterhoff said in the press release.
On the call, Winterhoff returned repeatedly to the framing that the disruption was contained.
“When Gravity deliveries were temporarily impacted by a supplier issue, we acted quickly, resolved it and resumed deliveries with additional quality controls,” he said.
“As deliveries resumed, we saw improving momentum through the quarter, including the highest March deliveries in Lucid history, up 14% year-over-year. We also experienced a strong rebound in order intake, up 144% in North America in March from February, with Gravity driving the majority of demand.”
He added that the company “regained our position among the best-selling EVs in our segments” in March.
Margins Worsen
Gross margin came in at negative 110.4% in the quarter, compared with negative 80.7% in the fourth quarter and negative 97.2% a year earlier.
Boussaid attributed the sequential decline to three factors: lower delivery volume against a fixed manufacturing cost base, underabsorption of fixed costs, and the absence of the large regulatory credit revenue that boosted Q4.
Partial offsets came from refunds tied to IEEPA tariffs and a smaller inventory write-down than the prior quarter.
“I want to be precise about the walk because the composition matters more than the headline,” Boussaid said while noting that they are temporary.
“These costs were tied directly to the stop sale. With that resolved, they don’t carry forward.”
“What remains and what we are focused on is the structural trajectory, which includes, as shared at Investor Day, an average of 50% to 60% reduction in unit cost over the coming years,” Boussaid said.
He added that unit cost spiked during the quarter due to the temporary disruption but “trended back towards the targeted trajectory in March.”
“As volume scale into the second half and with the launch of the Midsize vehicle platform, we expect continued structural improvement in unit economics,” the CFO told analysts.
“I want to be clear, the underlying midterm trajectory of unit cost improvement that we described at Investor Day remains intact, and Q1 does not alter it.”
The CFO repeated the medium-term framework laid out at the March Investor Day — gross margin breakeven within three years and free cash flow positive by the end of the decade.
The Napoli Transition
Tuesday’s call was the first earnings appearance for Silvio Napoli, the Swiss-Italian executive who spent nearly 31 years at Schindler Group before being appointed Lucid’s permanent chief executive last month.
Napoli kept his remarks brief and explicitly declined to comment on the outlook.
“At the risk of stating the obvious, I’m not in the position to comment on results reached prior to my joining,” he said. “Accordingly, I trust you will understand that today I will not comment on any specifics, including the outlook.”
The new chief executive outlined what he had observed in his first weeks at the company.
“What stands out immediately is the incredible domain competence and outstanding motivation of the Lucid team and the strength of our product,” Napoli said.
“At the same time, it’s clear that realizing Lucid’s full potential will require sharper focus and consistent execution, particularly around simplification, prioritization and speed.”
He mentioned four near-term priorities: recentering activities around customers, ensuring organizational clarity and accountability, focusing resources on the highest-impact areas, and embedding stronger cost and capital discipline.
“A central objective over time is to build a more self-sufficient company, one that progresses towards funding its own growth,” Napoli said.
“And that means being rigorous in delivering on our commitments and how we allocate capital to few vital priorities. In simple words, this means making clear choices on where to invest and just as important, where not to.”
The new CEO confirmed he visited the Casa Grande factory on his first day and travelled to Saudi Arabia the following week to inspect the AMP-2 plant under construction.
“Last week, I traveled to Saudi Arabia to witness a strong brand recognition in this fast-growing market and to see firsthand the progress of our new factory under construction,” Napoli said.
“As you know, this manufacturing center is an essential part of our commitment to drive scale, profitability and to position Lucid on the world stage.”
His compensation package, as previously reported by EV, includes a $1.5 million base salary, a 200% target bonus, a $9.5 million equity grant, and up to one million performance-based stock options tied to market capitalisation hurdles ranging from $5 billion to $17.5 billion.
Asked when investors should expect a strategic update, Napoli pointed to upcoming discussions with the board.
“As of Q2, we should start somehow getting a sense of where we are. Now in terms of by when I’ll be ready to give a plan, et cetera, this, I think, is something I’ll discuss with the Board at the earliest opportunity.”
Guidance Suspended
The most consequential financial decision disclosed Tuesday was the suspension of full-year guidance.
Boussaid framed the move as “a governance decision” tied to Napoli’s ongoing review.
A full updated outlook is expected at the second-quarter earnings call.
Lucid had reiterated the production guidance of 25,000 to 27,000 vehicles for this year on April 3rd.
The company said on Tuesday that it is introducing a new production reporting methodology, moving to a “process complete” definition that counts vehicles once they have completed the factory gating process — regardless of whether they ship as complete units or in semi-knockdown form.
The change is intended to align reporting with industry peers and reduce volatility tied to shipment logistics.
Boussaid said it has no impact on inventory or days-on-hand reporting.
“Under the new methodology, the normal auto industry seasonality, Q2 strongest based on working days, Q1 and Q4 softer due to holidays and planned shutdowns will appear more visibly in our reported numbers,” the CFO said.
Capital Raise
The April capital raise was central to management’s framing of the quarter.
Lucid closed three transactions: a $550 million convertible preferred stock investment from Ayar Third Investment Company, a $300 million registered common stock offering, and a $200 million additional equity investment from Uber.
The PIF affiliate also agreed to expand the delayed draw term loan, allowing Lucid to draw $500 million in April while retaining roughly $2 billion of undrawn capacity.
Pro forma for these transactions, total liquidity at quarter end would have been approximately $4.7 billion against $700 million in cash and equivalents on the balance sheet at March 31.
Boussaid said the company has runway “into the second half of 2027.”
He added that the convertible preferred structure was selected deliberately to balance liquidity needs against dilution.
“On the question of dilution, which I know is on investor minds, the recent financing was structured deliberately to balance liquidity needs against dilution considerations,” the CFO said.
“The convertible preferred structure with PIF reflects that balance as does the sizing of the common equity component.”
“On dilution, we are deliberate in how we approach capital raising. We have consistently favored structures that limit near-term dilution and preserve optionality,” the CFO said.
Boussaid framed the relationship with Lucid’s strategic backers as a structural advantage.
“The strategic stockholder base around this company, anchored by PIF and now meaningfully reinforced by Uber gives us a structural advantage in how we think about capital over the medium term,” he said.
“We will continue to evaluate all financing options, including the public markets when the appropriate conditions materialize. And our bias is toward disciplined capital deployment and with opportunistic raises.”
The company spent approximately $253 million on capital expenditures in the quarter, with operating cash burn of $1.19 billion bringing free cash flow to negative $1.44 billion — sharply higher than the negative $590 million reported in Q1 2025.
The Uber Partnership Becomes a Pillar
The April 14 expansion of the Uber deal was repeatedly highlighted on the call as a structural addition to Lucid’s revenue and capital architecture.
The ride-hailing giant increased its purchase commitment to at least 35,000 robotaxi vehicles, up from the 20,000-unit deal originally announced in July 2025.
The expanded fleet will include both the Lucid Gravity and the upcoming midsize platform.
Uber’s Chief Product Officer Sachin Kansal has been nominated for election to Lucid’s Board of Directors.
Boussaid called the Uber commitment “a durable addition to the capital structure and to the revenue outlook, not a onetime transaction.”
He cited three reasons it matters: improved long-term revenue visibility, derisking of the volume ramp into the midsize era, and validation of Lucid’s vehicle platform as a reference for commercial autonomy deployment.
Winterhoff used his call remarks to mention the strategic value of the expanded deal.
“This represents a meaningful increase in both scale and long-term visibility for the program, which generates a new revenue stream through a partnership approach that enables rapid speed to market in a new and rapidly growing market with minimal CapEx,” the COO-designate said.
“I’m excited to share that we have met all milestones so far in our joint project with Nuro to provide autonomous Lucid Gravities to Uber for commercial launch by the end of the year, and remaining milestones are on track.”
Winterhoff said all engineering vehicles for the program had been delivered, with 75 cars in the field accumulating mileage in multiple US cities.
Nuro received its California DMV permit for driverless testing in April, and Uber and Nuro employees began end-to-end test rides through the Uber app the same month.
“Our partners at Nuro have also received approval from the California DMV for driverless testing of the Lucid Gravity in the state, making it one of the only a handful of vehicles that have received such approval,” Winterhoff said.
“This is a key step in paving the way for launching commercial autonomous operations later this year,” he added.
Production validation builds for the robotaxi-spec Gravity will begin this quarter, with regular production of robotaxi vehicles for commercial sale targeted for early Q4 at the AMP-1 plant.
Commercial launch remains scheduled for late this year.
“As you can see, we are well on our way to achieving our goals with our robotaxi program and commercial launch is on track for late 2026,” Winterhoff said.
The Midsize Platform
Lucid’s midsize platform — anchored by the Cosmos and the upcoming Earth — was again presented as the catalyst for structural margin improvement.
Winterhoff confirmed that the bill of materials for the platform is tracking below initial cost estimates.
“The Midsize platform brings Lucid’s signature range, efficiency and driving experience to a much larger TAM and broader set of customers and is key to unlocking scale, affordability and improved unit economics,” he said.
“At our recent Investor Day, we provided a clearer view of the future product portfolio with the expected pricing starting below $50,000, reinforcing Lucid’s entry into a more accessible segment of the market.”
“I’m pleased to be able to share that our BOM cost position remains favorable, still tracking below our initial cost estimates.”
“During the quarter, construction on M2 and installation of capital equipment continued, and we remain on track for production ramp-up of the Midsize in 2027,” the COO-designate said.
Pricing will start below $50,000.
Boussaid has previously described the midsize unit cost as “up to 70%” lower than Lucid’s current models.
When Citigroup’s Michael Ward asked whether the start-of-production timing was being delayed by the guidance suspension, Winterhoff drew a distinction between SOP and ramp.
“The targets on the volume, we actually revealed at the Investor Day, and they have not changed. They have not changed. No, no. We are really laser-focused on that ramp,” Winterhoff told Ward.
He elaborated on why the company was being cautious about timing.
“We’ve seen this, you probably remember with the Gravity where we had an SOP, but then we weren’t able to ramp as we intended to. And that is something that we definitely absolutely want to avoid, and that’s why we want to review everything and make the right decision for the business,” he said.
The Saudi facility — which will produce the Cosmos and the Earth — has continued construction without interruption, despite what the company described as “unforeseen geopolitical tensions and logistical obstacles in the region during Q1.”
“Even all the development and the certifications are moving as we expected,” Winterhoff said when asked about progress in Saudi Arabia.
When Cantor Fitzgerald’s Andres Sheppard pressed on whether construction delays were possible, Winterhoff was direct.
“So far, I mean, it is going and we have never stopped doing it. I mean we had a few delays when it comes to arrival of equipment to be installed, but our team was able to mitigate that,” he said.
Cost Reduction and Headcount
Lucid recorded $37.9 million in workforce reduction charges during the quarter and disclosed an aggressive cost reduction program targeting savings across all geographies.
Boussaid said previously announced headcount actions are expected to generate $500 million in savings over the next three years, with the near-term impact most significant.
R&D expenses came in at $336 million, down sequentially from $361 million.
SG&A increased $22 million sequentially to $304 million, partly due to the absence of a prior-quarter provision reversal.
“Our posture on operating expenses is straightforward: protect the investments that build long-term competitive advantage, Midsize, autonomy, software and drive discipline everywhere else,” Boussaid said.
The CFO also addressed the noncash items that distorted the bottom line.
“Net loss in any quarter reflects noncash and nonoperating items that move significantly with our stock price. The operating loss and cash consumption metrics give a cleaner read on trajectory,” Boussaid said.
“Our focus remains on improving operating leverage as we scale volumes and continue to drive cost discipline across the business.”
Winterhoff used his closing remarks on the call to defend his two years as interim CEO.
“It has been a privilege to serve as Interim CEO. We delivered 2 years of consecutive record quarters when it comes to deliveries until the end of 2025. We ramped the Gravity throughout 2025, resulting in a production increase of about 100% last year,” he said.
“We’ve navigated real headwinds and the team’s ability to keep moving through them is something I’m proud of.”
“I’m confident in this team and Silvio’s leadership and in where Lucid is headed. And I’m looking forward to continue to contribute as Chief Operating Officer.”
Demand Signals
Asked about the second half of 2026, Winterhoff was cautious but identified several potential tailwinds.
“Apart from seasonality, which historically drives greater deliveries in second half, there are numerous other factors which may deliver a lift, including high gas prices, which tilt demand towards vehicles with more attractive operating costs, competitive dynamics, including exits from the Air and Gravity segments, lease cycles, Lucid software updates, potential tariffs on European imports and potential improvements in macroeconomic and geopolitical conditions,” he said.
The reference to “exits” implicitly captures the discontinuation of the Tesla Model X/S and the ongoing reshuffling at the upper end of the EV segment.
Lucid also confirmed that hands-free Dream Drive — long-flagged for the Gravity — and the rollout of new ADAS features remain on track to support second-half order intake.
When Morgan Stanley’s Andrew Percoco asked about commodity cost pressures that have surfaced across the industry, Winterhoff played down the impact.
“Actually, right now, that is very limited. I mean yes, there have been increases over the last couple of months on certain raw materials like aluminum. But very recently, for instance, we haven’t actually seen an increase,” the interim CEO said.
“And the other topic is the DRAM, which hits the whole industry. But even that, I mean, is compared to the rest of the BOM cost of the vehicle, a small amount. So we don’t see a major impact compared to where we ended end of last year right now.”
A subscription-based autonomous driving offering is targeted for 2027.
When asked by retail investors via Say Technologies when Lucid plans to turn a profit, Boussaid laid out the levers.
“At our Investor Day, we laid out a clear path to profitability. The target is gross margin breakeven in the midterm, building towards the mid-teens by late decade. And on cash flow, we expect to reach positive free cash flow on a similar horizon,” the CFO said.
“The levers to get there are straightforward. It starts with improving fixed cost absorption as volume grow, continuing to bring down bill of material and manufacturing costs, scaling Gravity, launching the Midsize platform and developing higher-margin recurring revenue from software, ADAS and autonomy.”
On the runway question, the CFO added: “Based on our current cash burn and the recent financing activities we have taken, including the capital raise and the extension of the DDTL, we have funding runway into the second half of 2027.”
“During this period, our focus is on executing the operational milestones that moves us towards breakeven and reduce our reliance on dilutive capital.”
“At the same time, we are actively pursuing top line diversification through higher-margin software and services particularly around ADAS.”
“Ultimately, the strongest answer to dilution is accelerating our path to breakeven because this is what opens up a much broader range of financing alternatives.”
Winterhoff faced a separate retail investor question on bankruptcy and take-private speculation, which he rejected directly.
“We do not speculate on market rumors or hypothetical strategic alternatives. Our focus is on executing the plan we laid out, strengthening the company and creating long-term value for our shareholders,” he said.
“First, I want you to know that we hear your frustration and restoring your confidence is of our utmost importance to us. We are focused on rebuilding your confidence through disciplined execution, transparency and measurable progress against key operational and financial milestones.”
International Distribution
The company highlighted the official launch of its first authorized retail partnership in Europe.
Winterhoff said Lucid currently has twelve letters of intent for additional partnerships, and the agency model has already added two cities in Germany.
“It allows us to much faster grow within the areas and the countries we are already in, for instance, in Germany or in the Netherlands or expand into new countries through an importership where you then use existing infrastructure and existing business relationships of those importers to scale much faster,” he said.
The pivot reflects a meaningful shift from Lucid’s historical direct-to-consumer-only model.
It also follows the delayed UK launch, which Lucid pushed to 2027 with the Cosmos as the launch vehicle.
When Percoco asked about the cash flow outlook in light of the suspended guidance, Boussaid pointed to seasonality.
“You need to recall that there is a typical seasonality in the company and that we see a significantly improved cash flows during or on the back end of the year. So we shouldn’t do any read-through of the cash performance as of Q1 because of 2 specific events,” the CFO said.
“The first one is the stop sales, so which has led to higher cash burn, and we are saying that we will be recovering that. And the second element that you need to take into account is the typical seasonality with a step-up in the sales towards Q3 and Q4, which is helping us to manage the cash burn.”
“We haven’t guided specifically for the cash burn. We have guided for the runway. The statement still remains unchanged.”
Stock Perfoemance
The company’s market capitalisation has remained near record lows, with PIF having now invested roughly four times what Lucid is worth on the public market.
The stock closed 6.6% lower on Tuesday at $6.25 with the decline extending in the after hours trading session as the first quarter results were published.
As of press time, the stock was trading 4.2% lower at $5.99.
A string of senior departures — including the Senior Director of Product Management Zach Walker, Head of North America Sales, and Head of Growth Marketing — has continued in the weeks since Napoli’s appointment.
Boussaid closed the call by reiterating that the framework outlined at Investor Day “holds.”
“The path to profitability runs through scale from Midsize cost reduction through M2 and improved mix and operating leverage. Q1 does not change that trajectory,” he said.
“It reinforces the importance of disciplined execution, and that is where our focus is. The fundamentals of this business, the technology, the product and the strategic position we have built are intact.”
“We are managing this period with discipline, and we intend to emerge from it in a stronger competitive position.”
The next test arrives at the Q2 earnings call, when Napoli is expected to share his initial read on the business and Boussaid is expected to reinstate guidance.
