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Lucid Group (NASDAQ: LCID) finally managed to get its act together and overcame production bottlenecks that had been hampering the company’s growth trajectory, if the latest delivery numbers are anything to go by.
To wit, Lucid Group has now revealed that it “produced 3,493 vehicles during Q4 at its manufacturing facility in Arizona and delivered 1,932 vehicles during the same period.” On a full-year basis, the company managed to produce 7,180 EVs, materially exceeding its own guidance of manufacturing between 6,000 and 7,000 vehicles during 2022.
For reference, Lucid Group had produced 2,282 new electric vehicles and delivered 1,398 units in the third quarter of 2022. Moreover, in Q2 2022, the company delivered just 679 units.
$LCID Q4 2022 deliveries only 1,932 versus plans of 4,063 units & consensus est of 3,045 units.
Production was 3,493 vehicles. Plenty of inventory on their website and now probably even more.
Q4 inventory should crush FCF. $LCID just had a $600m ATM. They'll do more soon.
— Motorhead (@BradMunchen) January 12, 2023
We had noted previously that Lucid Group continued to face logistics constraints as well as other production line kinks for much of last year. Those hurdles had prevented the company from ramping up production at its AMP-1 facility in Arizona. In order to tackle these issues, Lucid moved a significant proportion of its logistics operations in-house and implemented sweeping managerial restructuring, which saw at least six key executives on the manufacturing front leave the company in the past few months.
Meanwhile, Lucid Group has now commenced the deliveries of the Air EV in the EU and the Middle East. The company’s unique 900-volt-plus electrical architecture allows for the efficient charging of its EVs. For instance, when paired with a 300-plus kW DC fast charger, the Lucid Air Grand Touring edition can add a whopping 400 km of range in just 15 minutes.
Toward the end of December 2022, Lucid Group was able to decisively address the concerns around a possible liquidity crunch that the company was widely predicted to face in 2023. First, the company completed its at-the-market offering announced back in November, raising around $600 million in the process by selling 56.2 million shares. Second, Lucid Group announced that it was raising approximately $915 million by selling some of its shares to the Ayar Third Investment Company, an affiliate of the Saudi PIF, via a private placement of shares. In total, the company has now gained a whopping $1.515 billion in fresh liquidity to bolster its cash position, which stood at $3.85 billion at the end of Q3 2022 and consisted of cash, cash equivalents, and investments.
With a Total Addressable Market (TAM) of just around 15 percent in the US, some analysts have remained skeptical of Lucid Group’s financial sustainability prospects. After all, the company is currently burning around $1 billion in cash every quarter. Without the recent capital raising exercise, the company’s cash position would have declined to an estimated $2.85 billion by the end of December 2022. However, given the infusion of fresh liquidity, the company has likely ended the fourth quarter of 2022 with a cash position of $4.365 billion – more than enough to cover the entire FY 2023.
Of course, 2023 will see the reservations for the Lucid Gravity SUV open up, with deliveries expected to commence in 2024. As a refresher, Lucid Group’s AMP-1 facility in Casa Grande, Arizona, currently has a production capacity of 34,000 units per annum. The company is adding a second assembly line at the facility to handle the production of the Lucid Gravity SUV. Once the upgrade is complete, the facility’s annual production capacity will increase to 90,000 vehicles per year. Separately, Saudi Arabia recently awarded Lucid Group around $3 billion in incentives to establish a 155,000-units-per-year production facility in the Kingdom. The Saudis have also signed an agreement to purchase up to 100,000 electric vehicles from the company over the next ten years.
