Shares of Lucid Group Inc. slumped on Monday as part of a broader selloff in the electric-vehicle (EV) sector. The California-based EV maker, Lucid, announced the launch of a sales event aimed at attracting buyers with "special pricing and lease offers."
Lucid's Earnings Report and Recall Acknowledgement
The announcement precedes Lucid's earnings report, which is scheduled to be released after Monday's closing bell. In addition to the sales event, Lucid also addressed a recall of 59 Air EVs. The recall was initiated due to a faulty rearview-camera image.
Recent Performance and Stock Decline
As a result of recent developments, the stock of Lucid, traded as LCID, experienced a decline of 6.4% in morning trading. This decline puts the stock on track for its lowest close since June 27. Over the past five days, Lucid's stock has tumbled by 18.5% in a nonwinning streak.
Lucid's Pure Summer Event
On August 4, Lucid unveiled its Pure Summer Event, which brings "limited-time" offers available until August 31. Below are the updated prices and lease options for Lucid's Air models:
- Air Pure all-wheel drive: Starting at $82,400 with a 36-month lease option of $749 per month and $7,699 due at signing.
- Air Touring: Available for $95,000 or a 36-month lease option of $1,149 per month with $9,814 due at signing.
- Air Grand Touring: Prices starting at $125,000 or a 36-month lease option of $1,399 per month with $10,899 due at signing.
Purchasers can also take advantage of 72-month financing at an annual percentage rate of 4.99%.
No Immediate Response from Lucid
Following Tesla's Lead
Lucid's price cuts mirror those implemented by industry leader Tesla Inc. Tesla reduced its prices to boost sales and experienced positive results, with second-quarter sales soaring by 47% compared to the previous year. However, this move also resulted in a decrease in profitability for Tesla.
Lucid's Second Quarter Results and Vehicle Recall
Lucid, an electric vehicle (EV) manufacturer, is set to release its second-quarter financial results after the market closes on Monday. Analysts surveyed by FactSet anticipate that the company's per-share losses will widen slightly from 33 cents to 34 cents compared to the previous year. However, revenue is expected to rise significantly by 86.6% to $181.6 million.
In a separate announcement, Lucid revealed a recall of 59 of its Lucid Air vehicles from model years 2022 to 2023. The National Highway Traffic Safety Administration highlighted concerns regarding the rearview camera image, which fails to display when in reverse. This issue limits the driver's visibility, potentially leading to accidents or injuries. The company has promptly addressed this safety concern by releasing a free over-the-air software update. Lucid plans to send notification letters to affected vehicle owners on September 25.
This news of the recall and the upcoming financial report has impacted the EV sector as a whole, leading to a decline in stock prices. Tesla, one of the major players in the industry, experienced a 4.2% drop in its shares after announcing the resignation of its chief financial officer. Similarly, Rivian Automotive Inc., Nikola Corp., Fisker Inc., and Mullen Automotive Inc. all saw decreases in their stock values, reflecting a general decrease in investor confidence in the EV market.
It is worth noting that amid this decline, the Global X Autonomous & Electric Vehicles exchange-traded fund only experienced a modest 0.7% decrease, while the S&P 500 saw a slight increase of 0.5%.
Lucid's second-quarter results and the vehicle recall are pivotal moments for the company, as they will greatly impact its future direction and market perception within the EV industry.
