Lucid Group finally appears to be coming out of its production ramp-up malaise, with the company reporting a four-digit production total for a quarter for the first time ever. To wit, Lucid Group has now reported that it produced 2,282 new electric vehicles and delivered 1,398 units in the third quarter of 2022. For reference, the company had delivered just 679 units in Q2. Critically, Lucid Group today reiterated its earlier guidance of producing between 6,000 and 7,000 vehicles for the entire FY 2022. As we had noted in a previous post, some of the major hurdles that Lucid Group faced in ramping up production at the AMP-1 included logistics constraints as well as a tribal mentality of sorts where the production line, instead of working in a cohesive manner, was divided into disparate cliques. In order to tackle these two issues, the company has now moved a significant proportion of its logistics operations in-house and implemented sweeping managerial restructuring, which saw at least six key executives on the manufacturing front leave the company in recent days. Back in September, we had cited our internal source to suggest that Lucid Group’s production cadence has now increased to between 40 and 50 cars per day from an earlier run rate of just 5 to 15 cars daily. Assuming 20 working days in a month, Lucid Group can feasibly produce around 1,000 EVs per month. However, the current production run rate is expected to increase further to between 50 and 60 cars per day in short order. Based on today’s disclosure, Lucid Group’s production run rate computes at around 38 cars delivered per day, assuming 60 working days in a quarter. We expect this run rate to increase sharply going forward in light of the company’s reiterated guidance, which entails manufacturing at least 2,313 vehicles in Q4 2022 to satisfy the lower bound of this guidance range. In order to meet the guidance of producing 7,000 vehicles (the upper bound of the range) in the entire 2022, Lucid Group would have to manufacture at least 3,313 vehicles in the ongoing quarter. Bear in mind that Lucid Group’s AMP-1 facility in Casa Grande, Arizona, currently has a production capacity of 34,000 units per annum. The company is adding a second assembly line at the facility to handle the production of the Lucid Gravity SUV that is expected to launch in 2024. Once the upgrade is complete, the facility’s annual production capacity will increase to 90,000 vehicles per year. Separately, Saudi Arabia recently awarded Lucid Group around $3 billion in incentives to establish a 155,000-units-per-year production facility in the Kingdom. The Saudis have also signed an agreement to purchase up to 100,000 electric vehicles from the company over the next ten years. Note:
