What happened
Shares of Lucid Group (LCID 0.83%) fell 9.7% on Thursday after the electric vehicle (EV) company slashed its production forecast.
So what
The Lucid Air has been well-received by car buyers. The luxury sedan's long range, fast charging times, and high-end interior features have helped it win accolades, including being named the 2022 MotorTrend Car of the Year. Lucid, in turn, has received more than 37,000 reservations for the popular electric vehicle that collectively represent roughly $3.5 billion in potential revenue.
Yet the EV maker has been plagued by supply chain bottlenecks that have forced it to cut back its production schedule at its manufacturing site in Casa Grande, Arizona. Management now expects Lucid to build 6,000 to 7,000 vehicles in 2022. That's down from its reduced forecast of 12,000 and 14,000 vehicles in February, and its original estimate of 20,000 in late 2021.
These production shortfalls are resulting in mounting losses for the EV upstart. Lucid generated an operating loss of $559 million in the second quarter. The company also burned through more than $820 million in cash during the period.
Now what
Lucid is shaking up its leadership team to help right its ship. It brought in auto industry veteran Steven David to serve as its new senior vice president of operations. David, who previously worked at Stellantis and Chrysler, will oversee Lucid's supply chain, logistics, and manufacturing operations.
"We've identified the primary bottlenecks, and we are taking appropriate measures -- bringing our logistics operations in-house, adding key hires to the executive team, and restructuring our logistics and manufacturing organization," CEO Peter Rawlinson said.
