It's difficult to build a technologically advanced car without microchips.
The semiconductor chip crisis doesn't discriminate when it comes to affecting the world's various car brands. Everyone has been affected, although some have handled it better than others. Even automotive giants such as Ford have felt the pinch, having to halt the production of its most popular vehicles. But for small brands hoping to make a mark, the crisis has been tougher to navigate.
Deliveries of the attractive Lucid Air electric sedan may have commenced late last year, but the brand recently announced it will have to reduce its 2022 production outlook to 12,000-14,000 vehicles. This is quite the reduction from the original plan of 20,000 units.
"This reflects the extraordinary supply chain and logistics challenges we've encountered and our unrelenting focus on delivering the highest quality products. We remain confident in our ability to capture the tremendous opportunities ahead given our technology leadership and strong demand for our cars," said CEO Peter Rawlinson.
The EV maker announced its revised production outlook in its 2021 financial results. In the fourth quarter, revenue of $26.4 million was recorded, which includes $21.3 million from deliveries of the Dream Edition which began in October. As of February 28, Lucid Motors has produced over 400 vehicles, with 125 deliveries as of year-end 2021, with a total of 300 deliveries to date.
"We have a strong team, strong products, and a strong balance sheet with over $6.2 billion in cash on hand at year-end. We continue to invest in our business; we met our target of opening 20 Studio and Service locations in North America; in 2022 we will expand our footprint in Europe and the Middle East while laying the foundation for a later expansion into the Asia Pacific," said CFO Sherry House.
Aside from the planned expansion of the Casa Grande facility, Lucid also announced plans to build a new production facility in Saudi Arabia which, noted House, could "result in up to $3.4 billion of value to Lucid over 15 years."
The chip shortage isn't the only hurdle facing the carmaker. The sleek Air was recently subjected to a recall for a fault with the front strut damper. Thankfully, just 1% of examples were affected but the brand has said it will repair the issue at no cost to the company. Unfortunately, this minor blip still saw its share value dive by nearly 5% at the time.
With numerous chip suppliers trying to assuage the situation, the crisis should, hopefully, come to an end very soon. Lucid notes it has taken more than 25,000 customer reservations as of February 28, which could net potential sales of more than $2.4 billion. Hopefully, the chip shortage subsides soon, otherwise Lucid will be facing an uphill battle.