Lucid Group (LCID 0.11%) reports Q4 and fiscal year 2021 earnings today after market close. The electric vehicle (EV) company became public last July. And after reaching $57.75 per share in mid-November, Lucid's stock has tumbled back down to levels not seen since before its SPAC merger. And with the Nasdaq Composite down over 16.5% from its high, investors are likely concerned about how broader market volatility could affect Lucid even if it produces an impressive report.
If you're looking for a cheat sheet headed into Lucid earnings, you have come to the right place. Production and delivery numbers will take center stage, but investors could be best served by looking beyond the numbers to get a better reading on Lucid's production timeline and customer demand. Here's what to look for in Lucid's earnings press release, its investor presentation, and the subsequent earnings conference call.
Image source: Lucid Group.
1. Production and delivery numbers
In its Q3 2021 conference call, Lucid affirmed its intention to produce and deliver 20,000 vehicles in 2022 and 50,000 vehicles in 2023.
Lucid began mass production of the Air Dream Edition, the most expensive of the four planned Lucid Air electric sedan trims, in late September. In late October, it began delivering the first batch of the 520 customer-configured Air Dream Edition vehicles. Investors should look for a final 2021 production and delivery number, what the company expects to produce in Q1 2022, and any updates to its full-year 2022 guidance.
2. Roll out of Grand Touring, Touring, and Pure trims
In early February, rumors surfaced that Grand Touring customers had begun to receive their vehicle identification numbers, a sign that Grand Touring deliveries could be underway or set to begin in the coming months.
In its Q3 call, Lucid said that it would soon deliver Grand Touring models, followed by the Touring and then the Pure in 2022. If Lucid is weeks away from delivering the Grand Touring, it would show that it has already delivered the first 520 customer-configured Dream Edition vehicles and is one step closer to producing the lower-priced trims that likely make up the bulk of customer reservations.
3. Reservation numbers
Lucid had 9,000 Air reservations in May 2021, 13,000 by September, and 17,000 as of Nov. 15. By now, reservations could very well exceed 20,000. And if that's true, Lucid has one less problem to worry about in 2022 as it can focus on producing and delivering cars instead of drumming up customer demand.
However, Lucid has yet to disclose reservations by trim. All we know is that the 13,000 reservations from last September presented potential revenue of $1.3 billion, or about $100,000 per vehicle.
Lucid is producing the four Air trims in descending order of price. This strategy comes straight out of Tesla's playbook. It should allow Lucid to capture higher margins from lower production volumes from the more expensive trims before moving on to lower margins and higher production volumes from the less expensive Touring and Pure trims.
Investors should watch to see if Lucid breaks down its total reservations by trim. Having a higher number of reservations from its more expensive trims would bolster revenue and limit losses, while also showing that customer appetite for higher-end luxury EVs is strong. More importantly, it would show that there are willing buyers for Lucid vehicles being produced in the coming months, instead of the bulk of buyers waiting for the least expensive Air Pure (which Lucid probably won't begin delivering till late 2022).
4. Manufacturing capacity
Lucid's AMP-1 facility in Casa Grande, Arizona has a current production capacity of 34,000 vehicles per year, which is enough to satisfy 2022 production. In its Q3 conference call, Lucid said that the next step of its manufacturing capacity expansion is underway. The company plans to increase manufacturing capacity to 90,000 vehicles by 2023. The Casa Grande plant could eventually produce 365,000 vehicles per year. Lucid plans to increase total annual capacity to at least 500,000 units by the end of the decade.
5. Updates on Lucid Gravity
In addition to the Air electric sedan, Lucid hoping to make a splash into the electric SUV market with its Gravity SUV. Lucid's manufacturing expansion is intended to increase production of the Lucid Air, as well as pave the way for the production of the Lucid Gravity.
In its Q3 call, Lucid said that it would share more details about Gravity in 2022 even though production isn't expected to start till 2023.
Focus on the big picture
Knowing what to look for will help you filter out the noise and focus on Lucid's compelling long-term investment thesis without turning a blind eye to risks or ignoring potential red flags. Lucid is entering its most pivotal year as a public company. Executing its short-term production and delivery goals while expanding its manufacturing capacity and developing new products is essential for the company's long-term growth.
