What happened
Lucid Group (LCID -1.15%) reported its fourth-quarter results last night, and its shares are plunging this morning. The stock was near the morning lows, down 17% as of 10:17 a.m. ET. That's also more than 30% below where the stock traded less than a month ago.
So what
Today's decline comes after the company disappointed investors with its most recent business update. The company produced nearly 3,500 of its luxury electric Air sedans in the fourth quarter to bring its full-year 2022 total to 7,180 vehicles. That beat its prior guidance, but there were also signs of trouble ahead.
Most notably perhaps was the continuing decline in the company's level of reservations. That continues a declining trend after its reservations peaked in August 2022.
Data source: Lucid Group. Chart by author.
Now what
Another problem investors had was Lucid's guidance for 2023 electric vehicle production. The company estimates it will manufacture between 10,000 and 14,000 of its Air sedans in 2023. While that could result in nearly doubling production compared to 2022, it remains below the level Lucid initially believed it would be even last year. The company reduced its guidance for production in 2022 twice from its original prediction of 20,000 units.
Investors are likely also fretting the company will have no choice but to raise more capital soon. Lucid CFO Sherry House said the company's $4.4 billion in cash and $500 million available from lines of credit will only last it through 2023, reports CNBC.
Lucid still has a market capitalization of approximately $15 billion. It generated about $600 million in revenue in 2022, so even doubling production leaves the stock richly valued. It is likely shares won't have much upside unless or until the company outperforms even its most recent guidance.
