Lucid Group Inc (LCID.US), a California-based electric vehicle (EV) startup, has observed a significant slowdown in EV demand across both the U.S. and European markets, according to its CEO. The remarks align with the ongoing turbulence in global EV demand this year, where despite rapid advancements in EV technology and supply chains, signs of cooling demand persist.
Marc Winterhoff, Lucid's interim CEO, attributed part of the slowdown to the expiration of U.S. federal tax incentives, which accelerated EV purchases into Q3 2023. The company's second model, the Gravity SUV, is set to arrive in Europe by year-end, with deliveries expected to begin in Q1 2026. "We're still actively managing our order backlog, which provides some insulation," Winterhoff noted. "But there’s no question—demand is softening."
Morgan Stanley analysts, led by Adam Jones, recently downgraded Lucid, Rivian, and Tesla, citing expectations of a prolonged "EV winter" in 2024. Since the report, Lucid's stock has fallen over 7%, compounding a 59% year-to-date decline. The underperformance contrasts with rivals like Rivian and Tesla, which have fared better amid demand volatility.
Winterhoff reiterated Lucid's 2023 production target of around 18,000 vehicles, calling it "within reach." However, the end of the U.S. Inflation Reduction Act's $7,500 EV tax credit has marked a turning point, pulling forward demand into Q3 and likely dampening future sales. Wall Street models suggest the subsidy's expiration will "meaningfully slow U.S. EV adoption."
In Europe, high energy costs, inflation, and rising living expenses have dented consumer appetite for premium EVs. Additionally, inadequate charging infrastructure and high battery costs—long cited by researchers—continue to hinder broader EV adoption in the region.
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