Lucid (LCID +2.90%) made a bold announcement at a recent Nvidia event, saying it would launch one of the first truly "eyes-off, hands-off, mind-off" self-driving vehicles in the near future. The company is aiming for what's designated as Level 4 self-driving. The most capable semi-autonomous systems from automakers including General Motors and Tesla are currently at Level 2.
Even with its vague timeline, Lucid's goal is ambitious considering its current advanced driver assistance systems (ADAS) don't have as much real-world testing as GM and Tesla's. Here's what Lucid wants to achieve and why it will have a difficult time pulling it off.
Image source: Lucid.
Lucid wants to achieve something no one else has
Lucid's interim CEO, Marc Winterhoff, says the system will be a truly "mind-off" self-driving system. To get there, Lucid says it will work with Nvidia, using the company's Nvidia AV technology, which pairs with sensors, cameras, and lidar to provide the car with situational awareness.
Lucid's goal of selling Level 4 self-driving is essentially the equivalent of putting an address into your car and the passengers not having to interact with navigating the car at all -- unless something drastic changes, like very bad weather. The company currently has a limited Level 2 automation.
If it achieves this, it would make Lucid the first automaker to offer a Level 4 self-driving vehicle to its customers. For reference, Alphabet's Waymo, which can be used to shuttle passengers around autonomously in a handful of cities across the U.S., is also Level 4. Waymo doesn't sell vehicles to customers.
Winterhoff told CNBC in an interview that the goal is "very ambitious, but at the same time, also we're realistic," and said he believes it will take years to accomplish, as it takes incremental steps.
Why this might not work out the way Lucid wants
Investors should probably be a little bit skeptical of the company's goal of reaching Level 4 over the next several years. For one thing, Lucid isn't even a leader in semi-autonomous systems right now.
GM's SuperCruise semi-autonomous system allows for hands-free driving in some situations where the vehicle is driving on pre-determined maps. Even Tesla, which has plenty of controversies over its semi-autonomous systems, has more experience than Lucid with ADAS tech.
NASDAQ: LCID
Key Data Points
To understand how big the jump is between Level 2 systems and Level 4, consider that Waymo has been developing self-driving technology for more than a decade, has millions of real-world miles driven with its technology, and has billions of simulated miles driven to achieve its Level 4 designation. Even still, Waymo limits its robotaxi service to just a handful of cities and has had its share of mishaps.
In short, this tech is very hard to get right -- and it needs to be right almost all of the time to be safe.
What's more, creating a driving system capable of near autonomy will likely take a lot of money. Sure, Lucid may be saving some money by using Nvidia AV technology instead of starting from scratch. But it will still need to spend years developing the technology and testing it, as well as building it into its future vehicles, and that won't be cheap.
Lucid is already burning through cash as it tries to expand production and its vehicle lineup, resulting in an operating loss of nearly $1.5 billion in the first six months of 2025. It's unlikely that Lucid will be profitable anytime soon, as the company ramps up spending to launch new models over the next few years.
Lucid has already had to issue new shares to raise capital and has received cash injections from its largest investor, the Saudi Arabia Public Investment Fund, to keep it going. With the company already needing financial lifelines and spending heavily to expand its vehicle lineup, it's unclear where the additional money will come from to pursue such an ambitious autonomous vehicle goal.
I applaud Lucid for thinking outside of the box and setting a vision for its future, but shareholders shouldn't get too excited about this goal just yet -- and it's certainly not a reason to buy Lucid stock right now.
