Combined with a slowing economy, Lucid has to deal with Tesla's price cuts.
Lucid Motors is suddenly facing increasing pressure to possibly lower the price tag of its recently launched, luxurious, and technology-packed Air electric sedan due to Tesla's recent price cuts, rising interest rates, and a slowing economy. Per Automotive News, Lucid finds itself in this difficult position with few good options. In addition, it's facing new EV rivals coming to market.
Last year, Lucid delivered 4,369 vehicles, which fell behind production numbers for the Air. The vehicle only launched in 2021, and despite receiving solid reviews, it carries a hefty starting price of $170,500 in its top form, which was the first trim available to the public. Right at the tail-end of 2022, the base Air Pure began deliveries with a retail price of $87,400. But while that previously would've been enough to convince buyers to opt for the Lucid, after the recent price cuts, the Model S now starts at just $94,990 - close enough to make buyers think twice about the Air Pure.
For 2023, the top-of-the-line Air Sapphire will go on sale, but given current economic conditions, the $250,000 EV's launch timing may not be ideal. In its defense, Lucid CEO Peter Rawlinson said that for it to lower prices in long run, it needs to launch its most expensive vehicles first. That's the price startups typically have to pay.
Remember, Tesla did not launch the Model 3 and Model Y until the pricier Model S and Model X had been on sale for a few years. But Tesla is not Lucid's only problem. Mercedes and BMW both launched their flagship EV sedans, the EQS and i7, last year, and already the former sold over 8,000 examples.
On the one hand, Lucid has done a better job of catering to wealthy customers who want something more luxurious than a Tesla, but competition in the segment is heating up.
Legacy automakers have identified this market space and have the production capacity to move faster. Also not helping Lucid is that it has lost the $7,500 tax credit following the passing of the Inflation Reduction Act, which sets a $55,000 price cap for electric sedans to qualify.
Lucid has already removed some features from the Grand Touring trim, such as DreamDrive Pro driver-assistance, 21-inch Aero Blade wheels, and a better stereo, to help bring the price down following the IRA's passing.
Time will tell if the now $139,650 Grand Touring (instead of the previous $155,650) will see a sales increase. Lucid, because of its startup status, is in a weaker position to be flexible on pricing compared to its growing list of rivals. Combined with growing economic recession concerns, Lucid could be facing some tough times ahead.