Electric vehicles maker Lucid Group (NASDAQ:LCID) expects to produce 10,000 to 14,000 vehicles this year, which is way above the 7,180 vehicles it produced in 2022. The increased production outlook comes despite a tough operating environment for automakers as high-interest rates and market uncertainty continue to discourage consumers from spending on cars and trucks.
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The guidance range, however, remained below the analyst expectations of 21,000 units, according to FactSet. Further, in its fourth-quarter earnings, the company disclosed it had produced 3,493 vehicles in Q4 itself, considering which, the production outlook for the full-year 2023 seems disappointing.
Why Did LCID Reduce Delivery Expectations?
Lucid gave a few explanations for its less-than-expected outlook. For one, the company expects production to be disrupted in the first quarter due to a week-long physical inventory count in January and the transition time required before starting to build vehicles for Europe and the Middle East. Further, in Q3, Lucid plans to activate parts of Phase 2 at its AMP 1 production plant, which is expected to hamper production.
Meanwhile, the remaining two quarters will most likely witness no hurdles in production, with Q4 expected to have a greater potential for manufacturing output than the rest of the year.
Regarding order backlog, the company has more than 28,000 reservations, reflecting a decline of 6,000 reservations from the second quarter. This excludes about 100,000 vehicles to be sold to the Saudi Arabian government with deliveries expected to start this year.
Is Lucid a Buy, Sell, or Hold?
LCID stock has a Moderate Buy consensus rating based on three Buy, two Hold, and one Sell recommendations. The analysts’ 12-month average price target of $12.67 represents an upside potential of 27%. The stock has gained over 60% year-to-date.
