Electric vehicle (EV) company Lucid drastically slashed its production outlook for 2022 by 50% citing supply chain issues, which sent the stock tumbling more than 12% in pre-market trading on August 4.
“Our revised production guidance reflects the extraordinary supply chain and logistics challenges we encountered,” Peter Rawlinson, Lucid’s CEO and CTO, said in an earnings release on August 3. “We’ve identified the primary bottlenecks, and we are taking appropriate measures – bringing our logistics operations in-house, adding key hires to the executive team, and restructuring our logistics and manufacturing organization. We continue to see strong demand for our vehicles, with over 37,000 customer reservations, and I remain confident that we shall overcome these near-term challenges.”
Lucid now set its 2022 production volume outlook to a range of 6,000 to 7,000 vehicles, compared to its May outlook of 12,000 to 14,000-vehicle production, as GOBankingRates previously reported. This is the second time the EV company revised its production outlook. In March, it slashed its outlook to 12,000 to 14,000 from initial expectations of 20,000 vehicles in 2022, as GOBankingRates previously reported.
Shares are down 49.7% year-to-date.
In addition, the company said that it had “strong customer demand for Lucid Air with reservations over 37,000 as of today,” and that it had delivered 679 vehicles during the second quarter.
“I do have to say that this quarter has proven to be a very challenging period. And whilst we have experienced supply chain and logistics challenges along with the entire industry, the limitations of our logistics system have compounded the challenge,” Rawlinson said during an investor call, according to a Seeking Alpha transcript.
Following the announcement, CFRA Research said it was maintaining a Hold opinion on the shares, while cutting down its 12-month price target $2 to $18 per share.
“Revenue totaled $97M on deliveries of only 679 units, well short of the $157M consensus. We remain at a Hold, with positives such as the quality and specs of the Lucid Air, Saudi Arabia supply agreement, and new factory in Arizona balanced by operational issues, uncompetitive pricing, and a likely future capital raise,” Garrett Nelson, vice president at CFRA Research, wrote in a note sent to GOBankingRates.
“The EV manufacturer appears to be in the “production hell” stage of its development, a phrase coined by Elon Musk when describing the multi-year period of operational struggles Tesla experienced before achieving scale,” he continued.
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The company also announced the appointment of Steven David as Senior Vice President of Operations, reporting directly to Rawlinson. David previously held positions at Stellantis and Chrysler, according to the release.
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This article originally appeared on GOBankingRates.com: Major EV Company’s Stock Nosedives – Time to Invest or Sell?