Lucid, another Tesla competitor not resisting mass layoffs

Lucid Motorsone of Tesla’s competitors in the electric vehicle market, lay off 18% of their employees. The measure affects about 1,300 workers and is part of a broader effort to cut operating costs. As reported Wall Street MagazineThe decision also aims to preserve the company’s cash reserves ahead of a new vehicle launch in 2024.

The aforementioned environment ensures that the staff cuts will impact Lucid’s operations in the United States and will be completed by the middle of this year. Curiously, layoffs are so common that They will also cover some of the California company’s executives..

The redundancy decision was communicated via an email signed by Peter Rawlinson, CEO and CTO of Lucid. Thus, the company is starting to effectively cut the costs it promised last month, after the disappointing forecast for the total number of electric vehicles that will be produced this year was known.

Lucid Motors plans to produce no more than 14,000 units of Airits luxury sedan, during 2023. This figure goes hand in hand with declining car orders, indicating wsjwhich is down 24% as of February compared to August 2022.

Before proceeding to lay off 18% of its workforce, the electric car maker tried to cut costs in other ways. Especially when it comes to shipping and spare parts. However, this effort it wouldn’t be enough balance your economy for the purpose of future projects.

Lucid is following the path of Rivian, who also announced his layoffs

The Lucid Motors case is not an isolated case in the world of electric vehicles.. In early February, it became known that Rivian would cut 6% of its workforce – about 840 employees – to cut costs. From which it becomes clear that the panorama of startups dedicated to the production of electric vehicles is far from ideal today.

At Lucid, they assure that the uncertainty of the automotive market is one of the most important issues they face. Added to this is the shocking “leakage” of cash and cash equivalents. Same fell more than 45% between September and December last yearwhen they went from $3.860 million to $1.740 million.

In fact, Lucid came out in December to raise funding. The company closed a $1,500 million investment round, of which more than $900 million was contributed by the State Investment Fund (PIF). That is, the Saudi sovereign wealth fund, which already owns 62% of the company.

Lucid Motors plans for the future are ambitious. In addition to continuing production of Lucid Air, attention is focused on the arrival of the Gravity, its first electric SUV.. The company promises that it will be available to customers from 2024, although its technical specifications are not yet known exactly; its price was also not disclosed.

Of course, the success of Lucid Gravity will depend on how strong its producer is during this year. The California firm ensures that the funds available today are sufficient. to finance its activities until the first quarter of next year.