By Akash Sriram and Abhirup Roy
(Reuters) -Electric vehicle (EV) maker Lucid Group Inc reported first-quarter revenue well below Wall Street estimates on Monday and forecast 2023 production at the lower end of its previous guidance as a price war sparked by Tesla (NASDAQ:) Inc hurt sales.
Shares in the maker of the Air luxury sedan dropped about 9% in extended trading.
Tesla’s move to cut prices and increase volume, a strategy which CEO Elon Musk said is part of the EV maker’s recession playbook, as well as lower-priced electric models launched by traditional automakers have hurt startups such as Lucid and Rivian Automotive Inc.
Lucid, faced with mounting losses, has largely shied away from lowering prices apart from a discount of $7,500 on certain variants of its Air luxury sedan bought before March 31.
Instead, it said late March it would lay off 18% of its workforce, or about 1,300 employees across the organization as part of a restructuring plan to rein in costs.
The company reported quarterly revenue of $149.4 million, compared with analysts’ average estimate of $209.9 million, according to Refinitiv. It last month reported first-quarter production and delivery figures lower than in the preceding three months.
“The revenue was actually the weakest that’s been since the second quarter of last year, so there’s a big miss on the top line,” said Garrett Nelson, analyst at CFRA Research. “This could be an indication that this pricing war is having a direct impact on their results.”
Lucid CEO Peter Rawlinson said in a statement on Monday the company was on track to produce over 10,000 vehicles in 2023, compared with an earlier forecast for 10,000 to 14,000 units this year.
“It seems to be a subtle shift in the guidance,” Nelson said.
The first quarter net loss widened to $779.5 million from $604.6 million a year earlier, while cash and cash equivalents fell to $900 million at the end of the first quarter from $1.74 billion in the fourth quarter.
Chief Financial Officer Sherry House said the company had $4.1 billion in liquidity, enough to fund the luxury EV maker at least into the second quarter of next year.
Lucid said in a separate regulatory filing on Monday that it may raise up to $7.4 billion through sales of stock, debt securities, warrants or other offerings from time to time.
The EV maker is set to unveil its Gravity sport utility vehicle later this year ahead of its launch in 2024.
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