Lucid opts for cost-cutting as financials dim EV prospects

Lucid’s deepening losses triggered a cost-cutting strategy amid growing scrutiny of its EV ambitions. The EV manufacturer extended its net loss to USD 1.26 bn in 2Q from USD 739.3 mn a year earlier, according to the company’s financials (pdf). Revenue increased, however, 56% y-o-y to USD 405.3 mn during the quarter on the back of higher deliveries and a better product mix and pricing. Meanwhile, production levels rose 24% y-o-y to around 4.7k vehicles, despite dropping 13% q-o-q.

The half-year performance tells the same story, with Lucid’s net loss reaching USD 2.39 bn, up from USD 1.47 bn in the same half last year, and revenue rising 39.1% y-o-y to USD 687.8 mn, according to the firm’s earnings release (pdf). Total liquidity stood at USD 3 bn by the end of 1H, according to a separate announcement.

REMEMBER- The company has been striving to recover from a turbulent 2025, bringing in new CEO Silvio Napoli and enlisting consulting outfit AlixPartners to improve operations. It previously denied reports that it is weighing a take-private bid or bankruptcy filing, saying that it has enough funding through next year. The report — denied by Lucid as “completely false” — wiped over 50% off its stock in a record one-day plunge.

The company plans to trim USD 1.4 bn in expenses to reduce its losses and fund its pipeline. The cuts include around USD 600-800 mn from inventory, USD 500 mn from capital expenditure, and USD 200 mn from operating expenses. The latter includes savings from the 18% US workforce reduction announced in June, which is expected to generate USD 158 mn in annual savings.

The operational strategy shifted to focus on financial sustainability, reducing production to align output with demand and transform inventory into a liquidity boost, after uncovering a USD 300 mn impairment. Lucid is investing to improve customer service, including a 35% increase in technicians, more than a 20% increase in mobile service capacity, and a 30% or more reduction in service appointment wait times.

The company will also simplify its organizational structure, halving the number of executives reporting directly to Napoli and placing experienced new leaders across finance, technology, customer experience, transformation, and digital execution to accelerate decision-making. Lucid created a new chief customer officer role and appointed Billy Hayes to the position.

So…where will the money go then? Lucid earmarked its top priorities for capital deployment, including autonomous EV taxi project Robotaxi, the King Abdullah Economic City manufacturing facility, and its Midsize vehicle program. The Robotaxi program with Uber and Nuro is currently going through testing and validation, while the AMP-2 facility is moving into industrialization, with manufacturing systems being installed. The Midsize program is also progressing, with Atlas drive units and prototype vehicles undergoing validation and testing.

The EV maker is capitalizing on fresh investments to fund this expansion. Prince Alwaleed bin Talal acquired a 5% stake in the company in a USD 129.5 mn transaction. The EV maker previously received USD 550 mn in backing from the Public Investment Fund’s Ayar Third Investment and USD 200 mn from Uber in April.

LOOKING AHEAD- A Saudi EV is in the works, but localization and supply chain constraints remain obstacles. Lucid’s push to build a true Saudi EV in 2026 faces operational hurdles, with its plant still reliant on imported components. Efforts to build a local supply chain remain constrained by a lack of suppliers, critical mineral processing, and automotive vendors, leaving it exposed to logistics disruptions, rising freight costs, and assembly delays. Regional conflict affecting shipping, alongside trade tensions over critical minerals, also adds external pressure.

Worth Watching: Lucid’s operational timeline will depend on how quickly Saudi’s industrial ecosystem matures. This mainly involves whether the PIF’s push to localize the automotive sector, including supply-chain momentum from sister brand Ceer, can cultivate enough domestic suppliers to reduce Lucid’s exposure to Red Sea freight disruptions. The company’s cost-cutting runway could run out before its investments start delivering results if local sourcing remains limited.