Lucid beats sales estimates and confirms annual production

(Reuters) – Lucid beat Wall Street's third-quarter sales expectations on Thursday and reiterated its annual production forecast as it benefits from strong demand for its luxury electric sedans.

Lucid shares rose 8% in after-hours trading.

The company reported third-quarter revenue of $200 million, narrowly beating estimates of $198 million, according to data compiled by LSEG.

Lucid's buoyant earnings come as the company lowers prices and offers incentives like cheaper financing to attract customers who are gravitating toward cheaper hybrid vehicles because of high interest rates that are squeezing their budgets.

The company, backed by Saudi Arabia's sovereign wealth fund, still expects to produce 9,000 vehicles for the full year. That means the company would need to produce 3,357 cars in the last three months of the year to meet its target.

The company delivered 2,781 vehicles in the third quarter, but experienced a sequential production decline, producing 1,805 vehicles.

“We continue to see improvements in gross margin as our cost reduction efforts gain momentum,” said interim CFO Gagan Dhingra.

The company reported a gross margin of negative 106.2%, compared to negative 134.5% in the previous quarter, while its net loss was wider year-on-year.

The electric vehicle company is still losing tens of thousands of dollars per vehicle, even as rivals like Rivian dramatically cut costs to become profitable.

Lucid placed orders for its Gravity SUV on Thursday as it seeks to enter the lucrative SUV market and capture market share from Rivian and EV titan Tesla.

Last month, Lucid announced a public offering and private placement of about 637 million shares, raising $1.75 billion, providing the company with liquidity well into 2026, CEO Peter Rawlinson said.

Cash and cash equivalents were $1.89 billion in the third quarter, compared to $1.35 billion in the previous three-month period.

(Reporting by Zaheer Kachwala in Bengaluru; Editing by Anil D'Silva)