(Reuters) -Lucid Group posted a nearly 4% rise in third-quarter deliveries on Tuesday compared to the prior three months, benefiting from a special lower price to promote the sale of its Air luxury electric sedan.
Backed by Saudi Arabia’s Public Investment Fund, Lucid cut prices of its cars by as much as $12,400 in August as part of a special offer, mirroring moves by larger rivals such as Tesla whose price war has put pressure on companies across the sector.
Electric-vehicle demand in the United States has slowed in recent quarters as sticky inflation and high interest rates force consumers to pull back on big-ticket purchases.
“We find Lucid’s cash burn rate highly alarming and see the company facing daunting headwinds for the foreseeable future from a combination of weak demand and ongoing pricing pressures,” CFRA Research analyst Garrett Nelson said.
Lucid said it produced 1,550 vehicles and handed over 1,457 in the quarter to Sept. 30, compared with the production of 2,173 vehicles and deliveries of 1,404 units in the previous three months.
The loss-making startup also said more than 700 additional vehicles were in transit to its new plant in Saudi Arabia for final assembly.
Lucid’s shares were down more than 3% on Tuesday. They have lost more than a fifth of their value this year over concerns that EV startups will bear the brunt of Tesla’s price war.
The startup launched a cheaper variant of its Air Pure sedan earlier this month starting at $77,400, but the car is still more expensive than Tesla’s Model S luxury sedan which starts at about $75,000.
Lucid now needs to make about 4,000 cars in the fourth quarter to meet its annual production target of 10,000 vehicles, a goal it reiterated in August.
The company will report its third-quarter results on Nov. 7 after markets close.
(Reporting by Jaspreet Singh and Akash Sriram in Bengaluru; Editing by Shilpi Majumdar)
