Other EV startups may need to consider actions like Lucid, says Morgan Stanley

After Lucid Group confirmed plans for an 18% workforce reduction in line with the company’s objectives to pursue efficiency and cost cutting actions, Morgan Stanley analyst Adam Jonas said the firm estimates these actions can save in the order of more than $100M of expenses on an annualized basis. While stating that the savings from these actions "by themselves may only have a modest impact on cash consumptions," the savings could be more meaningful if combined with further actions, including reduced capital expenditure and other actions, the analyst tells investors. The firm, which believes other EV startups may need to consider similar actions to what Lucid has announced given the increasingly competitive EV environment and challenging capital raising environment, reiterates an Underweight rating and $5 price target on Lucid shares. However, it says it believes the company has an attractive suite of technologies and "can be a relevant player in the fast growing EV business" with the right cost management.