By Akash Sriram
(Reuters) -Lucid Group reported second-quarter deliveries above market expectations on Monday, as price cuts helped boost demand for its luxury electric sedans.
Demand for electric vehicles has grown at a slower-than-expected pace in the past year, pressured by high borrowing costs, economic uncertainties and consumer preference for hybrid alternatives.
EV market leader Tesla and others, including Lucid, have responded by slashing prices and offering incentives such as cheaper financing options to lure consumers.
Lucid, shares of which rose about 4% on Monday, had cut prices of its flagship Air sedans by as much as 10% in February.
The EV firm produced 3,838 vehicles in the first half of 2024 and needs to make more than 5,162 cars by the year-end to meet its annual output forecast of 9,000 units. It had made 8,428 vehicles in 2023.
“I think at this point, everything is shaping for them to achieve that guidance,” Andres Sheppard, senior equity analyst at Cantor Fitzgerald, said.
Lucid will produce and deliver more cars in the second half of the year, consistent with the automotive industry due to seasonal effects, he added.
The company delivered 2,394 vehicles in the quarter ended June 30, above estimates of 1,940 units, according to eight analysts polled by Visible Alpha.
Rivian Automotive reported upbeat second-quarter deliveries last week, while Tesla posted a smaller-than-expected decline.
Lucid, in which Saudi Arabia’s Public Investment Fund holds a 60% stake, had said in May it expects capital expenditure of $1.5 billion in 2024, up from $910.6 million last year, as it prepares to start manufacturing its Gravity SUV.
The Gravity SUV, priced at around $80,000, is set to go into production later this year and will take on Tesla’s Model X. Lucid’s Air sedan competes against the Elon Musk-led EV maker’s popular Model S.
Lucid is set to report its quarterly results on Aug. 5.
(Reporting by Akash Sriram in Bengaluru; Editing by Tasim Zahid and Shilpi Majumdar)
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