The EV maker still remains one of a few promising startups making progress in their race to dominate the trying world of electric vehicles — but that doesn't mean the company has been exempt from the many hurdles hobbling today's auto industry.
As it has ramped up, the company has had to rethink its approach to logistics, bringing those operations in-house and shifting around leadership. It's since had a number of software challenges, has several complaints published on the National Highway Traffic Safety Administration site, and has dropped its production guidance for the year twice. Much like many other EV upstarts, Lucid's stock has dropped around 80% this year.
There's still a lot going for the startup: Lucid is among the most financially-secure startups in the space and holds a major EPA-range milestone on the Air sedan.
But Lucid's bid to best Tesla — and other upcoming EV competition — hinges on its ability to right its production process and sidestep those industry-wide challenges that almost once took Elon Musk's company out.
While Lucid is a strong player in the world of EVs, many challenges — both specific to the company and industry-wide — could stand in the way of its long-term success.
Supply-chain issues have wreaked havoc on major automakers across the globe. Lucid has struggled to build relationships with suppliers that don't necessarily want to place their bets on a risky startup.
Quality control may prove vital for any EV startup trying to outdo Tesla. It's no easy feat to build an all-star team, ramp up brand-new manufacturing processes, and deliver the most efficient EV in the world.
It took several months for Lucid to begin to get a handle on its production. That required a major logistics overhaul and a leadership reorganization.
Still, as the end of 2022 wrapped up, the company faced other challenges: delivering fewer vehicles than it built, an increasing number of software bugs, and racing to get inventory out the door by the end of the year.
At the helm of Lucid is Peter Rawlinson, a former chief engineer of the Model S under Elon Musk, Tesla's CEO. He left Tesla after three years, feeling frustrated and limited in his work there.
Rawlinson is a mechanical engineer by training. He joined Lucid as CTO in 2013 and rose to power as CEO in 2019. He's determined to lead in the same space that's seen the rise and fall of other EV startups, such as Nikola, Lordstown, and Faraday Future.
Sources told Insider that Rawlinson's primary motivation was beating Tesla and one-upping his old boss. He said he wanted to build the "best car in the world."
The company made its debut with its flagship luxury sedan, the Air, and started production on it in fall 2021. First up was the $169,000 Dream Edition that offers a 520-mile range. The automaker has since released less expensive versions, and it's also developing an SUV, the Gravity.
Sources told Insider that the Air was everything Tesla's Model S wasn't: It's got 115 miles more range, and a different take on a minimalist interior. As a result, many found the vehicle — and the company — an impressive contender.
But some of that has been overshadowed by software challenges that the company has yet to publicly address. It is, however, releasing regular software updates.
Lucid has made many headlines throughout the past few years.
Investors and industry experts are generally bullish about the company, saying it's built to last and a good place for budding entrepreneurs and engineers to start their careers. It will be important to keep an eye on the company's cash situation as it continues to undergo a costly expansion. Experts are also interested in how well the company continues to ramp up production.
In 2021, Lucid followed the footsteps of many other EV startups and went public via a reverse merger with a special purpose acquisition company. The deal with Churchill Capital IV brought in a whopping $4.5 billion — the largest SPAC deal the industry has seen.
Still, Lucid has also seen a sinking stock price, shareholder suits, and an SEC probe.
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