EV maker Lucid Motors generated a $1 billion net loss for the first quarter, reflecting both recall problems and the broader slowdown of battery-car sales. With its new CEO suspending full-year production guidance, new questions are being asked about Lucid’s long-term viability, reports Headlight.News.
Lucid CEO Silvio Napoli.
Lucid disappointed investors as it reported first-quarter results on Wednesday, running up bigger losses than expected while also acknowledging that production has gotten out of sync with sales.
The California-based EV company suspended production guidance for the rest of the year as it struggles to lower bloated inventories. Wall Street responded by initially driving down Lucid Motors shares by as much as 5%, though the stock rebounded slightly towards the end of the day.
It was a difficult coming out party for new CEO Silvio Napoli. “An essential objective over time is to build a more cost-efficient company, one that progresses in funding its own growth,” said Napoli, who joined Lucid in April from the Schindler Group. “That means being rigorous in delivering our commitments. In simple words, this means making clear choices on where to invest and, just as importantly, where not to.”
Missing the target
Lucid recently launched the more affordable Gravity Touring package.
There was little doubt Lucid would end the first quarter deep in the red, but it missed analysts’ forecasts by a wide margin. The net deficit of $1 billion was up from $366 million in red ink a year earlier – while the loss per share of $3.46 was substantially worse than the consensus forecast of $2.64 per share. Revenue of $282.5 million were up 20% year-over-year, but still fell well short of the consensus forecast of $440.4 million.
Several factors appeared to work against the company, starting with the slump in U.S. EV sales. They’ve tumbled to barely 6% of the overall American motor vehicle market this year, down from over 8% in 2025, in large part due to the phase-out of federal tax credits in September.
But Lucid also was forced to issue a stop-sale order and recall due to a safety defect with the rear seats of its second model, the Gravity SUV. While it didn’t specifically indicate how much that directly impacted sales, Lucid wound up delivering 3,093 vehicles – including both Gravity and its original Air sedan – during the quarter, even while producing 5,500 of the vehicles.
Uncertain forecast
The Uber Lucid Gravity robotaxi will begin rolling out late this year in the San Francisco Bay Area.
As recently as last month, Lucid reaffirmed an optimistic sales forecast calling for production of 25,000 to 27,000 vehicles for all of 2026. It has now suspended that guidance and indicated it may take time for Napoli to approve any update to the figures.
“With Silvio now on board and conducting his review of the business, we are suspending our prior guidance and will provide a full updated outlook at our second-quarter earnings call,” CFO Taoufiq Boussaid said during an earnings call on Wednesday morning.
Boussaid indicated the seating defect alone resulted in a $200 million impairment for the quarter. But he also indicated Lucid has sufficient liquidity, at about $4.7 billion at the end of the first quarter, to carry it through the end of 2027.
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A critical period ahead
A number of renderings, like this one from Instagram, have popped up purporting to show what the Lucid Earth will look like.
That will be critical for the carmaker as it moves ahead on the development of a new family of midsize vehicles. In January, interim CEO Marc Winterhoff told Headlight.News there will be three models coming off that new platform. The first will be the Cosmos SUV.
It’s expected to start production later this year at a new plant in Saudi Arabia — that country’s sovereign investment fund has been the financial force propping up Lucid over the last several years. It’s uncertain if or when the other two models will follow. Currently, Gravity and Air are produced at the automaker’s only existing plant in Phoenix, Arizona.
The Iran War has caused some challenges with access to equipment needed at the Saudi plant, noted Marc Winterhoff, Lucid’s chief operating officer. He expects to issue an update on the launch of Cosmos production by the end of the current quarter.
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