Please ensure Javascript is enabled for purposes of website accessibility

Lucid Motors Tops 10,000 Reservations, Accelerates Manufacturing Plan Thanks to Strong Demand

By Evan Niu, CFA - Jun 23, 2021 at 10:00AM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The nascent EV start-up enters the final stretch before launching the Air sedan.

The marketing blitz seems to be working. Over the past several months after announcing that it will merge with special purpose acquisition company (SPAC) Churchill Capital IV (CCIV), electric vehicle (EV) start-up Lucid Motors has been opening more studios around the U.S. while also ramping up advertising campaigns to raise brand awareness. Lucid even cleverly bought an ad spot during Elon Musk's appearance on Saturday Night Live last month, knowing that the Tesla CEO would attract a receptive audience.

Lucid is heading in the final stretch before both entering production as well as closing its de-SPAC transaction with Churchill Capital IV. The company has now added over 2,500 reservations in four months.

Workers assembling a Lucid Air sedan

Image source: Lucid Motors.

10,000 and counting

When Lucid announced the merger, it had approximately 7,500 reservations for its Lucid Air sedan. The company provided investors with a handful of updates this week as it opens a new flagship store in New York City. Among the more pertinent updates was that Air reservations have now topped 10,000.

Here's a timeline of Lucid's disclosures regarding reservations, which includes all trims.

Date

Total Reservations

Feb. 19

7,500

Feb. 28

8,000

May 13

9,000

Jun. 22

10,000

Data source: Lucid Motors and SEC filings.

Additionally, Lucid says that it has now completed all of its preproduction builds and has started producing quality validation builds. In a follow-up interview with CNBC, CEO Peter Rawlinson noted that those units will be delivered to customers once the quality is confirmed to meet Lucid's rigorous standards. The chief executive called the milestone "a big step forward" toward launching the Air.

In fact, Lucid has even decided to accelerate some of its plans due to robust demand. The company is accelerating around $350 million of planned capital expenditures that will be used to expand manufacturing capacity at its Arizona factory. That budget is being pulled forward from future periods into 2021 through 2023, translating into 6% to 7% more capital spending during 2021 through 2026, according to Lucid.

The money will be used to combine the next two phases of the factory expansion into "one expedited phase," implementing a general assembly line for the Gravity SUV that is in the pipeline. As a reminder, Lucid already completed Phase 1, which has capacity of approximately 34,000 units per year. The new plan will provide an additional 2.7 million square feet of manufacturing space, which will facilitate up to 53,000 Air units per year by 2023.

The Gravity SUV is mostly on schedule, but Lucid expects to release the vehicle near the end of its projected timeline in the second half of 2023. The company reiterated its delivery outlook for 2023 and 2024, which calls for 49,000 units and 90,000 units, respectively.

Evan Niu, CFA owns shares and warrants of Churchill Capital Corp IV, shares of Tesla, and has the following options: long January 2023 $15 calls on Churchill Capital Corp IV and long January 2023 $20 calls on Churchill Capital Corp IV. The Motley Fool owns shares of and recommends Tesla. The Motley Fool has a disclosure policy.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Churchill Capital Corp IV Stock Quote
Churchill Capital Corp IV
CCIV
Tesla, Inc. Stock Quote
Tesla, Inc.
TSLA
$927.96 (3.10%) $27.87

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
400%
 
S&P 500 Returns
128%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 08/16/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.