Lucid's stock rises, as EV maker says it will cut 400 jobs in restructuring

By Ciara Linnane

Move comes after wider-than-expected first-quarter loss in a weak environment for EVs

Lucid Group Inc.'s stock rose 2.6% premarket Friday, after the EV maker announced a restructuring that will include reducing its workforce by about 400 employees, or 6% of the total.

The disclosure, which came In a regulatory filing, comes after the company's (LCID) mixed quarterly results from early May, which included a bigger-than-expected loss and lower revenue. EV demand is sagging broadly as consumers have turned more cautious and are less willing to pay more for an all-electric vehicle.

Lucid said it expects to substantially complete the plan by the end of the third quarter. The company is expecting to book $21 million to $25 million in charges, mostly related to severance, employee benefits, employee transition and stock-based compensation.

Some $19 million to $23 million will be recognized in the second quarter, the bulk of which should be paid by the end of the third quarter.

"I'm confident Lucid will deliver the world's best SUV and dramatically expand our total addressable market, but we aren't generating revenue from the program yet," Chief Executive Peter Rawlinson said in a letter to workers included in the filing. "As always we must remain vigilant about costs."

The company will refocus on three priorities, he added: selling Lucid Air sedans; staying on track with its Gravity SUV program; and exercising strong cost discipline to ensure its funding gets it to the next phase of the business.

"We must continue accelerating new customer acquisition and expanding awareness for our flagship vehicle," Rawlinson said, referring to the Lucid Air sedan.

Lucid ended the first quarter with about $5 billion in liquidity after successfully raising $1 billion via private placement to an affiliate of Saudi Arabia's Public Investment Fund. Saudi Arabia's sovereign-wealth fund is a major Lucid backer.

The stock has fallen roughly 35% in the year to date, while the S&P 500 has gained 10.4%.

-Ciara Linnane

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05-24-24 0738ET

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