California EV maker Lucid's management mentioned "scale" no fewer than 24 times on the company's Q1 results call. The firm, whose strategy has long been to sell its vehicles at higher prices in the premium segment, may be now indicating that it will pursue a higher-volume strategy to unlock profitability.
Lucid's average selling price fell during the quarter amid downward pricing pressure across the wider EV industry. And although the company hailed its Air sedan outselling premium electric sedan rivals Porsche and Tesla's Model S in Q1 in the premium segment, CEO Peter Rawlinson hints that the automaker is now manoeuvring itself towards a volume-based strategy.
"It is all about scale. The more we can scale, the more cars we make, the more volume we can spread the fixed cost. That is the cost of our investment, our incredible factory and facility, our long-term investments across the sale of each car," Rawlinson told analysts on the firm's Q1 results call.
And although the company has yet to produce over 2,000 EVs in any single quarter, Rawlinson emphasises that "we are not production constrained". Rather, with its 1,728 units produced, Lucid managed production in the quarter to be lower than deliveries, in what Rawlinson calls an effort to be "cost conscious". The firm reiterated its 9,000 unit production guidance for full-year 2024.
Management is coy about what precise volume targets the firm has, saying only that the firm's step to profitability is "to get Gravity into production [and] that will have a multiplier effect upon market size". Beyond the Gravity SUV, the automaker is also looking to enter the fray in the midsize vehicle segment, a considerable departure from the company's strategy to-date.
"We need to get a midsized vehicle, our volume vehicle price at around, we believe, about $48,000, and get that into production — and [this] is on schedule for production for late 2026," Rawlinson says.
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Lucid has also long dangled the carrot of lucrative powertrain licensing beyond its current low-scale deal with sportscar maker Aston Martin. The company, though, has as yet given no material updates on negotiations with other automakers about licensing its high-performance EV platform.
However, Rawlinson told analysts that the midsize volume platform could become the focal point of the company's licensing strategy. "Where I speak of our midsized tech platform, this is the tech, that really is going to suit a high-volume family car of the future," the CEO says.
"Our tech is made for affordability at scale. It is designed around reducing the need for battery, which is the biggest cost item of making an EV. So actually adopting Lucid's technology is a route to significantly reducing the cost of making an EV," he adds.
When asked by a retail investor if Lucid was looking to make an affordable EV to compete with industry leader Tesla, Rawlinson puzzlingly maintained that "we are already competing with Tesla", with the $70,000 Air sedan. Even with the 2026 midsize EV priced at $48,000, Lucid would not be competing directly in the most affordable segment but Rawlinson insists that this constitutes a high-volume, mass-market strategy.
"If we envisaged the company would only make a small number of vehicles, we would have purchased less equipment and built a smaller factory," Rawlinson says, "but we have a more ambitious goal to provide affordable, long-range EVs for mainstream mass market consumers."
Ciaran has written about finance, politics and culture. He is passionate about e-mobility and what it means for our way of life.
Ciaran has a Masters in Ancient Philosophy from Oxford University.
