Lucid’s turnaround plan hinges on $1.4B in cash savings, robotaxis

Lucid Motors said Tuesday that its “operational reset” will focus on $1.4 billion in cash reductions along with three other “must win” and potential money-making priorities that include robotaxis, its factory in Saudi Arabia, and launching a mid-sized electric vehicle.

The turnaround plan, led by its new CEO Silvio Napoli, aims to pull Lucid out of its spiral of growing EV inventory and unchecked spending. To reach that $1.4 billion in cash savings, Lucid said it will reduce capital expenditures by $500 million and projected savings of between $600 million and $800 million in inventory, according to its second-quarter earnings statement. The company said it will also reduce operating expenses by $200 million.

The effort, if successful, will provide sufficient liquidity runway well into 2027, Napoli said during Tuesday’s earnings call with investors.

Napoli didn’t mince words during his first quarterly earnings call as CEO.

“The way we operate has to change,” he said. “While there is no question that Lucid brought leading innovations and outstanding products to the market, we have disappointed on several fronts, and for far too long. We have not executed consistently, we miss commitments, launched products before they were ready, underinvested in service, responded too slowly to quality issues, and allowed complexity to slow decisions down.”

Napoli has already set some of this plan in motion. The company has shaken up its leadership ranks and hired several top execs , including a new chief financial officer, chief technology officer, chief customer officer, chief digital officer, and chief transformation officer. Napoli has also cut in half the number of people who directly report to him and in June directed the company to lay off 18% of its workforce, or around 1,500 employees, just four months after the EV maker made a cut of 12%.

Lucid also eliminated the second shift of EV production at its factory in Casa Grande, Arizona. The layoffs and elimination of that second shift generated $158 million in projected annualized savings, Napoli said during the company’s earnings call.

Despite these moves, Lucid’s second-quarter earnings show a company that continues to lose money. The EV maker reported revenue of $405 million, up from $259.4 million in the same quarter last year. It reported a net loss of $1.26 billion, or $3.30 a share, compared with a loss of $855.3 million, or $2.80 a share, a year earlier.

Lucid said it ended the second quarter with $3 billion in total liquidity.

While a reduction in spending is central to this reset, Napoli listed several must-win projects, including its upcoming mid-sized EV, finishing its AMP-2 factory in Saudi Arabia, and its robotaxi program with Uber and Nuro, that will eventually make it profitable.