What happened
Shares of Lucid Group (LCID 0.41%) fell 17% on Wednesday after the electric-vehicle (EV) company reported a downturn in reservations and a need to raise more funds from investors.
So what
Lucid produced 2,282 vehicles and delivered 1,398 in the third quarter. Those figures were up more than threefold and twofold, respectively, compared to the prior-year quarter.
The EV-maker said it was on track to hit its annual production target of 6,000 to 7,000 vehicles in 2022. "I'm also pleased to announce that we've now proven our ability to produce 300 cars a week, with a visible pathway to our next incremental ramp up," CEO Peter Rawlinson said in a press release.
The increase in deliveries drove Lucid's revenue to $195.5 million, up from $232,000 in the third quarter of 2021. However, the heavy costs incurred by rapidly expanding production resulted in an operating loss of $687.5 million, compared to $497 million in the year-ago period.
Now what
A reduction in reservations was more concerning to investors. Chief Financial Officer Sherry House said Lucid had over 34,000 vehicle reservations as of Nov. 7. That's down from more than 37,000 in the second quarter. Those reservations now represent sales of over $3.2 billion, down from roughly $3.5 billion.
Still, Lucid expects sales of its new sport-utility vehicle to help fuel its expansion. "We plan to open reservations for Project Gravity SUV in early 2023, which we believe will unlock a very large and incremental addressable market for us," House said.
Yet the cost of that expansion won't be cheap. To fund its growth initiatives, Lucid intends to raise an additional $1.5 billion from investors. That includes a $915 million stock sale to Saudi Arabia's sovereign wealth fund and a $600 million public share offering.
