Lucid Motors Offers Discounts As Demand Reduces

  • Lucid Motors is trying to keep its existing customers and increase employee orders by offering deep discounts, as the total number of orders dropped to 34,000 in September.
  • The company offers a 10% discount for customers to reset expired orders; an $18,000 discount for employees who purchase a Grand Touring model before the end of the year; and an internal financing rate of 2.81% for precast units.
  • Production targets for 2022 were set at 7,000 units, down from the original figure of 14,000 cited in February, but the company has only produced around 4,000 units this year.

    As the auto industry turns toward electrification, the cost of producing electric vehicles remains high compared to their internal combustion counterparts, a result of rising material costs and new manufacturing processes. That cost is built into the retail price of every EV in today’s market, and legacy manufacturers hope to recoup costs from early adopters willing to pay luxury prices. Emerging EV makers are betting heavily on a different demographic: the wealthy but anti-Tesla buyer. Or, in other words, a Lucid Air owner.

    There can only be so many $100,000 EVs out there, and Lucid Motors jumped on the electric luxury performance bandwagon a few years too late. At least that’s what it seems, as the California-based EV maker continues to inching through its 34,000 order book. Slow enough that the company seems cash-starved now, as it offers discounts to customers who previously abandoned their orders.

    Lucid Motors electric car demo on Capitol Hill

    Kent Nishimurafake images

    Specifically, Lucid sent an email to customers with expired orders saying the company would reset these orders to the original legacy price of $139,000 for the Lucid Air Grand Touring, according to barrones. That’s 10% off the current price of $154,000. This same email claims that the reinstated orders could be completed within a few weeks as the company works to complete 7,000 orders by the end of the year. For reference, Lucid had shipped fewer than 4,000 units as of the end of September.

    It’s not just customers that the company is trying to keep. In fact, the brand has initiated an employee purchase program, in which employees will receive an $18,000 discount on the Air Grand Touring model. If the purchasing clerk can take delivery by December 31, Lucid will inject an additional $500 each pay period until the total amount reaches $18,000, according to Business Insider.

    Despite the slower-than-projected delivery rate, Lucid sales have been trending in the right direction, as the company’s website now features models ready for delivery. Incentivizing less demanding customers by offering a subsidized annual interest rate of 2.81% through internal financing is not bad either. With average auto loan rates trending in the double digits, this direct low rate would be the equivalent of paying $15,000 less in interest.

    the Lucid Air Dream edition can go up to 503 miles on a charge

    Lucid’s Arizona factory is built on 500 county-leased acres.

    Lucid

    Despite this, it remains to be seen how many people actually have $150,000 to spare on a luxury EV, with overall auto market and economic trends indicating such customers are rare. While stock prices have fallen 54% in the last six months and the company is on track to spend billions of dollars on production, the true indicator of a positive investment from a consumer standpoint is value. model market.

    Used sales on auction sites like Bring A Trailer show 2022 model year Lucids with less than 500 miles selling for $118,000, while an identical unit with just 200 miles sold for $124,500. In other words, both sold for much less than the cost of the model coming out of the dealership.

    As the company continues to ramp up production at its Casa Grande, Arizona factory and construction begins on its Saudi Arabia plant, the rate of deliveries should grow exponentially, increasing revenue by $3.2 billion, according to estimates from the company. That number is contingent on Lucid maintaining or adding to its current 34,000 orders, and the addition of Instagram ads indicates Lucid is eager to do just that.

    However, in a high-priced market dominated by Tesla, competitors are constantly in an uphill battle. As manufacturers work to make EVs more accessible, the price of Lucid’s Air sedan and incoming Gravity SUV could make these models even more of an outlier in the future.

    Should Lucid make an entry level EV? Please share your thoughts below.

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