Even the Saudis cry. After Faraday, Nikola, Arrival and Rivian does Lucid also lose energy?
Despite the Saudi Public Investment Fund being the first shareholder (in 2018 it invested 1 billion dollars to acquire 61% of the shares), Lucid also inaugurates a season of cuts
The ecological transition seemed to revolutionize the automotive market forever, allowing many startups , born out of nowhere or almost (almost all boasting famous investors and substantial investments behind them) to break into the market to compete on equal terms with the famous brands, more reluctant to seize the opportunities of electrification. But the war in Ukraine, the world that is once again dividing into blocs, the increase in raw materials, the chip crisis are putting a strain on these very young and aggressive startups, which also have to contend with the boldness of their Chinese counterparts, often financed from Beijing. So much so that Rivian, on which Ford and Amazon had bet (it will use EV vans to renew its fleet) announced the cut of about 6% of the 14,000 employees, Nikola by 7%, Arrival even intends to halve them while Faraday at the moment it will cut wages by a quarter. The latest to announce the start of a season of cuts is Lucid, which also boasts not only the know-how of the CEO Peter Rawlinson, known for being a top engineer at Tesla, but above all the Saudi petrodollars.
THE SAUDI LIKES LUCID
Yes, because to build the factory in Saudi Arabia, on the outskirts of the capital, Lucid was able to count on funding and incentives for over 3 billion euros (3.4 billion dollars). Mind you, it hasn't confiscated all of them: they will in fact be spread over a 15-year time horizon and are already tied to production at a site of 155,000 cars a year.
The futuristic gigafactory will only be ready in 2026, and will have a capacity of 155,000 cars a year. The “Advanced Manufacturing Plant #2 (AMP-P)” will be located in the King Abdullah Economic City. The Saudi Arabian government has already pledged to buy up to 100,000 Lucid vehicles over 10 years to electrify its public fleet, which will naturally consist of top-of-the-line sedans.
With the Saudi Arabian Public Investment Fund (PIF) as the first shareholder (in 2018 it invested 1 billion dollars to acquire 61% of the shares), Lucid seemed to bet everything on Middle Eastern scrooges more than Europe, Asia and the USA, so much so that few months ago he opened his first concessionaire in the capital, precisely in a shopping center in the Al Nakheel district.
CUTS COMING SOON
But, as we said, the storm also reached the desert oasis where Lucid had found shelter, forced to lay off about 1,300 workers, equal to 18% of the entire workforce, an adjustment that is part of a restructuring program which should be completed by the end of the second quarter.
After all, the Californian startup from Newark closed 2022 with a red account of 2.6 billion dollars and revenues of just over 600 million. For a startup to have more liabilities than assets isn't great, but those losses have, evidently, gone too far.
Especially since, exactly as happened to many innovative realities that have flourished around the bet of the electric car, Lucid too is unable to satisfy the orders: compared to 28,000 luxury EV cars already booked, the company expects to succeed by 2023 to deliver between 10,000 and 14,000 vehicles. Very little, but still a marked improvement over the previous year when it stopped at 4,300; In addition, the company recently announced a recall of 600 vehicles. The Saudis' money, as we know, is unlimited, but what about patience?
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/smartcity/tagli-lucid-pif-sauditi/ on Fri, 31 Mar 2023 05:56:03 +0000.