Lucid CEO Says Company Lost Track of Its Own Cars in Q3

What happened

Lucid, the California-based maker of luxury electric vehicles including the Air and Gravity, said logistics and inventory-control problems affected its third-quarter results. CEO Silvio Napoli said on the company's third-quarter earnings call that at the beginning of Q3, "we didn't even know where cars were."

Napoli said some orders took up to two weeks to deliver, causing Lucid to lose orders. He described the fix as "fundamental discipline" and said the company now has "granularity" about what cars are being produced, where they are being shipped, where they are being stored, and when they can be available.

Production and deliveries

Lucid built 2,954 vehicles in the third quarter and delivered 3,806. Deliveries fell 3.7% from the second quarter and 6.7% from a year earlier. In the three quarters to June, Lucid built 18,686 vehicles and delivered 12,391, a difference of 6,295.

Finished vehicle inventory fell to $534.7 million at the end of September, down from $1.38 billion at the end of June, of which $623 million was finished vehicles. Lucid has written down $1.11 billion of inventory and supplier commitments in five quarters.

The fix and other changes

Lucid's presentation names the process "Car Flow," which it says "aligns production, sales, and supports inventory reduction." A new commercial team has "a clear commercial cadence," and can make sure "that we sell the cars that we know can be available on the day for the customers who require it."

Napoli said a Chief Technology Officer, Chief Financial Officer, Chief Customer Officer and Chief Transformation Officer joined early in the third quarter. The company's head of global logistics left for the humanoid robot maker Figure in September. Lucid also deployed an AI sales agent in September.

On service, Napoli said Lucid cut service wait times by about 20%, with 40% more service technicians and 15% more mobile service capacity. Warranty claims fell 70% and warranty costs were 16% lower than a year earlier.

Headcount fell from 10,600 at the end of the first quarter to 7,700 at the end of the third, a reduction of 2,900 that Chief Financial Officer Alexander De Bock put at 28%. Lucid announced job cuts in June that it said would save about $158 million a year together with the shift reduction.

Outlook

Napoli said second-half deliveries would exceed the first half's 7,046. De Bock said he expects deliveries to rise in the fourth quarter. Lucid shares closed up 9.4% at $3.60 on Monday, before the results, and traded at about $3.49 before the market opened on Tuesday.

Sources

• engadget.com: Lucid CEO Says The Company Didn't Know Where Its Own Cars Were
• mezha.net: Lucid CEO says the company sometimes didn’t know where its cars were
• eletric-vehicles.com: Lucid CEO Says 'We Didn't Even Know Where Cars Were' at Start of Q3

This article was drafted with AI assistance and checked against the sources above. Company claims are reported as claims. Cover image is AI-generated.