US electric vehicle maker Lucid is planning $1.4 billion in cost reductions, including cuts to its US workforce, as it responds to widening losses and weaker demand for EVs in the US.
The California-based company, whose major shareholder is Saudi Arabia’s Public Investment Fund, announced the measures alongside its first-half results. Losses increased 50% year on year to $2.4B, up from $1.6B, while Lucid shares fell 9% in after-hours trading.
The initial cost-cutting phase includes $600M to $800M in inventory reductions, $500M in lower capital expenditure and $200M in operating expense reductions. The company also listed $158M linked to US workforce reductions.
Lucid produced 10,274 vehicles in the first half, below the pace needed to reach its full-year target of 25,000 to 27,000 vehicles. The company has struggled to become profitable since starting production in 2021.
The announcement follows a leadership overhaul and comes after Lucid denied reports of an impending bankruptcy. The company said its work with restructuring consultancy AlixPartners focuses on improving execution and operations.
Lucid is also planning to shift large parts of its operations to Saudi Arabia and announced in January that it would begin full-scale manufacturing there this year. The PIF injected a further $550M into the company in April.
Source: Agbi
