Earnings season rolled around today with notes on Lucid Motors’ fourth quarter results. The company, like other electric vehicle (EV) companies, is nascent in terms of revenue, although it is more advanced than some. The company made its public debut as Company after-sales service in July last year after merging with Churchill Capital IV.
The value of the company had a turbulent day. Shares of Lucid are up nearly 10% in regular trading, adding $2.63 to its value per share. However, after the company released its results, its shares fell, wiping 10.8% of its value, or about $3.14 per share.
In total, Lucid is down a fraction today at the time of writing. Why? Revenues were below expectations. But as with all companies like Lucid that have been busy building in anticipation of future sales, there’s more to the story.
To get a good idea of Lucid’s fourth quarter and full year 2021 results, we’ll start by looking at its non-financial results, including customer bookings and more. Next, we will explore its financial results in detail.
Reservations and capacity
After announcing 17,000 bookings last November for the Lucid Air, the company’s luxury sedan that offers long range and the largest shivers “frunk” in the market, customer reservations topped 25,000 on Monday, reflecting potential sales of more than $2.4 billion.
The first deliveries of the Lucid Air, which TechCrunch first rolled in September, began in November. Only 125 Airs were delivered in the fourth quarter, but to date there have been a total of 300 – a sign that Lucid may be ramping up production and delivery.
The EV company noted that production currently exceeds 400 vehicles and that 2022 should see a range of 12,000 to 14,000 Lucid Air vehicles being produced, which is down from the 20,000 units that Lucid promised at the time. her Third quarter results. The company attributes supply chain issues to the failure and expects those issues to ease in the second half.
Lucid Air production will be fueled by Lucid’s manufacturing facility in Casa Grande, Arizona, where the company’s 2.85 million square foot expansion is well underway, bringing production capacity to its Current 34,000 Lucid Airs per year at 90,000 units, the company says.
Lucid also builds a new manufacturing plant in the Kingdom of Saudi Arabia which it plans to complete by 2025. The company estimates that the Saudi factory could generate up to $3.4 billion in revenue over the next 15 years. For its part, working with Lucid contributes to Saudi Arabia’s goal of transforming and diversifying its economy by developing sustainable energy and transportation.
But the relationship between Lucid Motors and Saudi Arabia goes back further than this recent agreement. Lucid was founded in 2007 as Atieva, a company that was more interested in supplying the burgeoning electric vehicle market than making cars itself. He pivoted to the Lucid Motors mission and brand in 2016, but struggled to raise funds. The company nearly died before being saved by the Saudi sovereign wealth fund’s $1.3 billion investment in 2018.
Lucid also returned to the timing of its Gravity project, its luxury SUV which will also be manufactured in Saudi Arabia. In Q3 2021, Lucid announced it was on track to begin production and first deliveries in 2023, but on Monday the company said it expects production to begin in the first half of 2024.
“I fair want to for make one better product; I am really excited with the way it’s in development,” Peter Rawlinson, CEO of Lucid Motors, said on the conference call. “This is taken a some twists and turns and turns in his development for Craft this same better than Wed anticipated. So I am Great pump, and I think this deserved fair a little bit longer. We also want to for to integrate a parcel of the learning of a production from Lucid Air in this program, to have this healthy feedback loop of integrating those learning.”
The company is exploring additional manufacturing sites in China and possibly Europe, Chief Financial Officer Sherry House said during the fourth quarter 2021 earnings call on Monday.
Lucid generated revenue of $26.4 million in the fourth quarter of 2021. The company sold $21.3 million worth of its Lucid Air Dream Edition vehicles during the period, which, according to its earnings notes , helpfully explains up to 1,111 horsepower, depending on trim selection and other options. The company’s lameest, weakest, slowest, most pokey car has got to slide with just 800 horsepower, we hasten to add.
Either way, delivering 125 cars after building a total of 400 to date may seem like a small thing, but for an EV company, hitting the production ramp is a big milestone.
Deliveries weren’t enough to push Lucid close to breaking even. Indeed, the company remains almost comically unprofitable. Revenue costs were $151.5 million for the fourth quarter, research expenses were $163.6 million, and general and administrative expenses were $197.0 million. In total, Lucid recorded an operating loss of $485.7 million in the fourth quarter of 2021. Or, during the quarter, for every car delivered by Lucid in the last three months of 2021, it lost 3, $9 million in terms of operations.
Investors expected Lucid to report revenue of $36.74 million in the fourth quarter, by Yahoo Finance. The company’s GAAP earnings per share of $0.64 failed to excite the investing public.
In a full year, the pace of scale and R&D investments by Lucid is even more evident. In the calendar year, against revenue of $27.1 million, Lucid had an operating loss of $1.53 billion and a GAAP net loss of $4.75 billion.
You could look at a company with $2.58 billion in negative operating cash flow for a year and say, hey, that’s a lot. But Lucid closed 2021 with cash and cash equivalents worth $6.26 billion, so it remains completely stuffed with cash. The business may be self-financing for some time, even if it fails to cover more of its expenses with gross profit in time. Lucid is carrying about $2 billion in long-term debt, it’s worth saying at this point.
Looking ahead, investors expect the company’s revenue to reach $2.01 billion for the current year, again by Yahoo Finance. Is this number possible? Well, with 125 cars delivered in Q4 2021 and $21.3 million in revenue from those sales, Lucid had an ASP of $170,000 during the quarter. If it manages to build 13,000 cars, the midpoint of its forecast, sells them all, and sticks to its fourth-quarter ASP, then the company would see $2.22 billion in revenue in 2022. is the bull’s business.
Bears might note that the company’s ASP is expected to decrease with scale and that the company won’t sell every car built this year, but, hey, a midpoint charged battery is half full, right , not half empty?