EV Startup Lucid Cuts 18% of Workforce, Including Some Executives

Chief Executive

Peter Rawlinson

wrote in an email sent to employees Tuesday that the cuts would occur across the company’s U.S. operations and include executives. Lucid expects to incur a cost of $24 million to $30 million related to the workforce reductions. Messages would be sent to employees over the next three days, he wrote.

The company’s stock closed down 7.25% on Tuesday. 

Lucid is the latest car company to make deep cuts to its workforce, as demand for new cars and trucks softens following interest-rate increases and growing concerns about the economy. 

Rival EV startup

Rivian Automotive Inc.,

along with

Ford Motor Co.

and

General Motors Co.

, have also taken steps in recent months to reduce staff. 

Rivian, a maker of electric pickup-trucks and sport-utility vehicles, conducted two rounds of layoffs and slashed or delayed some programs to ensure it had enough cash to fund operations for the next few years. 

The Lucid cuts come in the wake of a promise to trim spending in February, after its production target for this year of building up to 14,000 vehicles disappointed analysts. Mr. Rawlinson said the production target reflects mounting uncertainty in the car market. 

Buyer reservations for Lucid cars have been in decline lately. The company reported 28,000 reservations for its Air sedan as of Feb. 21, a 24% drop from August last year. The company has said that long wait times for its vehicles prompted some early reservation holders to cancel.

Many electric-vehicle startups that went public in the past few years have struggled to spool up factory production and get their vehicles into the hands of customers, leading to heavy cash burns in recent quarters. 

Lucid plans to roll out its second model next year, an electric SUV called the Gravity, which it plans to build at its plant in Casa Grande, Ariz.

Lucid pointed to a number of cost-cutting measures when it released its full-year results, including cutting down on parts and shipping costs, as well as deferring some spending on the expansion of its Arizona factory. 

In his Tuesday email, Mr. Rawlinson said those cost reductions alone weren’t enough to hit Lucid’s targets, which led to the layoff announcement.

Lucid had $1.74 billion in cash and cash equivalents as of the end of December, compared with $3.86 billion at the end of September. The company raised $1.5 billion from investors in December, with the lion’s share coming from its majority owner, Saudi Arabia’s Public Investment Fund.

The auto maker has said it had sufficient cash to fund operations through the first three months of 2024. 

Write to Sean McLain at [email protected]

Chief Executive

Peter Rawlinson

wrote in an email sent to employees Tuesday that the cuts would occur across the company’s U.S. operations and include executives. Lucid expects to incur a cost of $24 million to $30 million related to the workforce reductions. Messages would be sent to employees over the next three days, he wrote.

The company’s stock closed down 7.25% on Tuesday. 

Lucid is the latest car company to make deep cuts to its workforce, as demand for new cars and trucks softens following interest-rate increases and growing concerns about the economy. 

Rival EV startup

Rivian Automotive Inc.,

along with

Ford Motor Co.

and

General Motors Co.

, have also taken steps in recent months to reduce staff. 

Rivian, a maker of electric pickup-trucks and sport-utility vehicles, conducted two rounds of layoffs and slashed or delayed some programs to ensure it had enough cash to fund operations for the next few years. 

The Lucid cuts come in the wake of a promise to trim spending in February, after its production target for this year of building up to 14,000 vehicles disappointed analysts. Mr. Rawlinson said the production target reflects mounting uncertainty in the car market. 

Buyer reservations for Lucid cars have been in decline lately. The company reported 28,000 reservations for its Air sedan as of Feb. 21, a 24% drop from August last year. The company has said that long wait times for its vehicles prompted some early reservation holders to cancel.

Many electric-vehicle startups that went public in the past few years have struggled to spool up factory production and get their vehicles into the hands of customers, leading to heavy cash burns in recent quarters. 

Lucid plans to roll out its second model next year, an electric SUV called the Gravity, which it plans to build at its plant in Casa Grande, Ariz.

Lucid pointed to a number of cost-cutting measures when it released its full-year results, including cutting down on parts and shipping costs, as well as deferring some spending on the expansion of its Arizona factory. 

In his Tuesday email, Mr. Rawlinson said those cost reductions alone weren’t enough to hit Lucid’s targets, which led to the layoff announcement.

Lucid had $1.74 billion in cash and cash equivalents as of the end of December, compared with $3.86 billion at the end of September. The company raised $1.5 billion from investors in December, with the lion’s share coming from its majority owner, Saudi Arabia’s Public Investment Fund.

The auto maker has said it had sufficient cash to fund operations through the first three months of 2024. 

Write to Sean McLain at [email protected]