Lucids Electric Vehicle target puts it at half Tesla’s current level.
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The electric car company has a production plan that shows how speculative its nearly $70 billion valuation is.
Tesla’s market cap exceeds $1 trillion. That’s a high valuation for a company with a rough annual production of 1 million cars.
General Motors produced 6.83 million vehicles in 2020, down from a peak of 10 million in 2016, and has a market value of nearly $89 billion, according to Statista.
Toyota, valued at $342 billion and earning some valuation premiums thanks to its main business in hybrid vehicles, sold 8.6 million vehicles in 2020, down about 10 percent from the previous year.
Ford, with a market value of $100 billion, sold just under 4.2 million vehicles in 2020, down from 5 million the year before.
Lucids Electric Vehicles are a potential Tesla competitor with a market cap of nearly $70 billion but largely no sales.
The data suggests that Electric Vehicles carry a substantial valuation premium. It also shows that Lucid has benefited a lot from investor good faith. It may not need to hit the millions of cars sold by traditional automakers to justify its current valuation, but it currently commands a much higher premium per car than Tesla actually sells.
Lucid achieved the valuation without recognizing any revenue from the sale of vehicles. It did start delivering vehicles in October, but the number was in the dozens, maybe even hundreds, but still basically zero.
In the third quarter results, you’ll see costs associated with starting production in September. However, you won’t see vehicle revenue until the fourth quarter, given that customer deliveries begin on October 30. During the third quarter, Lucid recognized revenue of $232,000, primarily related to the use of battery packs in the Formula E series.
Lucids Electric Vehicle production will be ramped up, and CEO Peter Rawlinson seems excited about interest in the company’s first car, the Lucid Air
The fantastic experience these customers and media have had with the Lucid Air thus far has only increased interest in the brand, with the result that the pace of new bookings has picked up, currently at 17,000 units, and climbing rapidly.
Lucids Electric Vehicles requires a $3,000 deposit to pre-order the Lucid Air. That’s a lot more than the $100 Tesla asks for when people preorder the Cybertruck.
If all goes well with Lucid, it expects to have produced half as many cars as Tesla in about eight years over the past 12 months.
Currently, the company and the entire management is laser focused, on expanding to 20,000 and 50,000 units next year. But it plans to produce 500,000 units by the end of the century. They have plans to expand Casa Grande to that level.
They also achieved manufacturing localization. Since Lucid manufactures the entire technology suite, the battery, the motor, the inverter, the entire electric powertrain in-house, it is also incredibly valuable in terms of manufacturing. They don’t just buy parts here and get value that way. Cars have a lot of built-in added value. The capacity plan for Casa Grande is 365,000 units.
To be clear, “end of the decade” refers to 2030. That means Lucid Investors will have to wait a long time until there is a link between car production and valuation. And, of course, 17,000 reservations suggest that demand will need to grow significantly to get anywhere close to actually selling 500,000 cars in 2030.
Founded in 2007 as Atieva, Lucid initially focused on making electric vehicle batteries and powertrains for other automakers.
Lucid’s CEO Peter Rawlinson was previously Tesla’s Vice President of Engineering, and Vice President Derek Jenkins was formerly Design Director for Mazda’s North American operations. The company has received investments from Qingjin, Mitsui, Wenlock, Jifu, etc.
The company changed its name to Lucid Motors in October 2016 and officially announced its intention to develop an all-electric high-performance luxury vehicle.
On November 29, 2016, state and company officials announced plans to build Lucid’s $700 million manufacturing facility in Casa Grande, Arizona, which is expected to employ as many as 2,000 workers by the mid-2020s, initially producing 20,000 vehicles, and Expanded to 130,000 vehicles per year. The plant is designed to support up to 380,000 vehicles per year. As of November 2016, the company plans to break ground in 2017 and start car production in early 2019. The first vehicles will roll off the assembly line on September 28, 2021.
On September 17, 2018, Lucid Motors announced that they were in talks with Saudi Arabia’s Public Investment Fund for more than $1 billion worth of funding.
The investment was completed in April 2019. The investment will fund: final engineering and testing of the Lucid Air model; first phase construction of its manufacturing facility in Casa Grande, Arizona; commercial production of the Lucid Air; and Lucid’s global retail strategy, in North America.
Construction of the factory started at the end of 2019, and the first phase of the project was completed in December 2020. The construction of the second phase is underway, and the annual production capacity will be increased from 34,000 to 90,000. The completed plant (Phase IV) will have a combined manufacturing capacity of approximately 400,000 vehicles per year.
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