Stellar bonafides, muted reception
Lucid is exactly the type of EV startup that you’d think had a chance to replicate some of the alchemy that’s taken Tesla from longshot to EV domination. Executive ranks rife with ex-Tesla stars, headquartered in the heart of Silicon Valley, and well-capitalized after cashing on the EV market hype, with billions in reserves. On the technology front, they’ve already developed some substantial innovations in efficiency and miniaturization, and they seem to have a fine sense of taste. And yet… And yet, thus far they’ve not been able to capture the zeitgeist of the marketplace. Their sales are off to a slow start, nearly 2 years after the Air started rolling off the production line in Arizona. So what is the problem with Lucid?
Brilliant product but perhaps a little off-target
With Lucid’s launch car, the Air, they’ve created something that while magnificent, does not deliver a product that fundamentally stands out. The Air doesn’t challenge notions of what defines luxury or tech in the way the Model S did 10 years ago. The design is handsome – modern but formal, yet it does not turn heads. Unlike the Rivian R1T, which so far has been able to cash in with a relatively conservative but beautifully executed design because it was The First EV Pickup, the Air is one of many luxury sedans buyers can choose from in 2023.
The EV tech is fantastic but perhaps just a small step ahead of Tesla, again not the paradigm shift from legacy carmakers that Tesla leveraged with the Model S. Further, the Air’s sedan layout is pretty traditional, in contrast to the Model S which cleverly paired the look of a sporting luxury sedan with the fun & utility of a hatchback, further distinguishing it from most competitors.
What’s more, while the Model S arrived (way back in 2012) at a time when SUVs were only beginning to assert their market dominance, the Air arrived after the tide had shifted. To make an impact in 2023, Lucid (or any other aspiring marque) needs a credible SUV model. In every segment and price point, SUVs are essential to market relevance.
Based on their quarterly sales and production updates, while Lucid continues to ramp production numbers, data indicates they are building a lot more cars than they’re selling.
Is there any hope for Lucid?
Lucid is set to launch the large Gravity SUV late next year, still a fairly long wait for a company currently posting annual lossses in the billions. No doubt the Gravity has the potential to find a bigger audience than the Air has so far (just 2800 sold in the first half of 2023). A big, stylish, and exclusive SUV is sure to tickle the fancy of plenty of EV buyers. Hope is on the horizon but there is no denying Lucid’s sense of urgency.
Meanwhile, the market isn’t standing still. Kia just launched the 3-row EV9, Mercedes is rolling out the EQS SUV, and of course, Rivian’s R1S SUV is already leading the tide of large EV SUVs. Suffice it to say, it looks like Lucid, which just a year ago seemed primed to claim a slice of the EV market, might be caught in the pinch of high interest rates, slower-than-needed growth, and a fundamental miscalculation of how to enter the market. I am still intrigued by their brand and their potential but I can’t say I’m convinced they are going to make it. Perhaps the bottomless pockets of their Saudi owners will keep them alive long enough to launch a compact crossover. But in the meantime, it seems hard to see how Lucid is going to make it.