Lucid Motors (LCID) is gaining momentum as more former Tesla (TSLA) owners trade in their vehicles for Lucid’s luxury electric models.
The California-based EV maker has officially launched its second product, the Gravity SUV, with deliveries set to begin in April. The Gravity is expected to attract a broader range of customers compared to Lucid’s niche Air sedan, which has struggled to achieve mass-market appeal.
Interim CEO Marc Winterhoff confirmed an increasing number of Tesla owners are shifting to Lucid, citing recent changes in Tesla’s brand perception and customer preferences. “Tesla buyers were always a key source of our sales because they were already used to electric drivetrains and were looking for something better,” Winterhoff said. “Since the beginning of the year, we’ve seen a clear uptick of interest in Lucid from Tesla buyers.”
The Gravity SUV, priced at $79,900, enters a competitive luxury EV space dominated by Tesla’s Model X, Cadillac’s Escalade IQ, and premium offerings from BMW, Audi, and Mercedes. Despite the price point, leasing options may allow buyers to take advantage of federal EV tax credits, making the vehicle more attractive.
Challenges Ahead: Production and Market Competition
Lucid aims to produce 20,000 EVs in 2025, doubling its 2024 output but falling far short of its earlier projections. The company’s struggles with supply chain disruptions, production delays, and competitive pricing pressures have forced it to scale back its ambitions. Since going public in 2021, Lucid has failed to meet its initial aggressive targets, contributing to a stock decline of over 95% from its peak.
Adding to the uncertainty is the lack of a permanent CEO. Winterhoff stepped in as interim CEO following the abrupt departure of Peter Rawlinson, who led the company for over a decade. Investors are watching closely to see if Lucid can appoint an experienced leader capable of scaling operations while balancing costs.
A Key Advantage: Avoiding Tariff Pressures
One of Lucid’s biggest advantages over foreign competitors is its U.S.-based manufacturing. Unlike Chinese and European automakers facing President Trump’s proposed 25% tariffs on imported EVs, Lucid produces its vehicles in Arizona, making it immune to these new trade barriers. The company has also localized production of key powertrain components, ensuring a higher degree of vertical integration.
“We are very highly vertically integrated,” Winterhoff said. “We’re building our battery modules, our battery packs—all in Arizona. We’ve been committed to bringing manufacturing stateside even before the tariffs.”
Despite its challenges, Lucid has the potential to carve out a significant space in the luxury EV market. With strong financial backing from Saudi Arabia’s Public Investment Fund and an expanding product lineup, the company remains a compelling, albeit risky, investment opportunity. Investors will be watching how well Lucid navigates its production ramp-up, leadership transition, and competitive pressures in the coming months.
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