Lucid Delays Affordable EV to 2027, Announces $1.4 Billion in Cost Cuts Amid Widening Losses

Lucid Group is delaying the launch of its more affordable electric vehicle platform to the second half of 2027 and implementing a significant cost-reduction plan as it navigates production issues and mounting financial losses. The company's shares fell as much as 11% in after-hours trading following the announcements and a second-quarter earnings report that missed analyst expectations.

Strategic Shift and Cost Cutting

Lucid announced a major business review focused on tightening cost controls and ensuring product quality. The company is delaying its planned mid-size, lower-priced vehicle from its original late-2026 target to the second half of 2027. CEO Silvio Napoli told Reuters that the company's luxury Air sedans and Gravity SUVs were launched "a bit in haste" and that he did not want to "repeat the mistakes of the past."

As part of the review, Lucid is targeting $1.4 billion in cash savings this year. The plan includes:

• $600 million to $800 million reduction in inventory by aligning production with demand.
• $500 million cut in planned capital expenditures.
• $200 million reduction in operating expenses.

These savings are in addition to an expected $158 million in annual savings from recent job cuts that affected about 18% of its U.S. workforce, the company stated.

Q2 Financials Miss Estimates

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For the second quarter ending in June, Lucid reported revenue of $405 million, a 56% increase from the prior year but below the LSEG consensus estimate of $416 million. The company's losses widened, posting an adjusted loss of $2.78 per share, compared to a loss of $2.35 per share a year earlier and significantly worse than the $2.42 per-share loss analysts had anticipated.

The company attributed some of its challenges to supplier-related issues that have disrupted production, particularly for its new Gravity SUV. Despite the headwinds, Lucid stated that recently secured financing and its cost-cutting measures are expected to provide a "sufficient liquidity runway well into 2027."

Market Context

Lucid's strategic pivot comes as the broader U.S. electric vehicle market faces softening demand after changes to federal tax credits. The company, which is backed by Saudi Arabia’s Public Investment Fund (PIF), is focusing on shoring up its finances until its more affordable models can fuel future growth.

The cost-saving measures follow weeks of market speculation, during which Lucid denied reports of a potential take-private deal or bankruptcy filing. The company's financial stability remains a key focus for investors, though its significant backing from the PIF provides a substantial financial cushion.