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In June 2022, Elon Musk, chief executive of Tesla, said bluntly that Lucid, a US electric car start-up, showed signs of bankruptcy and would go bankrupt unless it could slash costs. Now the startup is laying off staff to cut costs.

According to media reports, the new American car-building force Lucid Group Inc. There are plans to cut 1300 jobs, covering almost all positions, including senior executives, accounting for 18% of the total workforce. The reason for the layoffs is that the electric car start-up hopes to save cash by cutting operating costs before launching a second model next year, the source said.

According to the internal memo, Lucid will communicate the details of the layoffs within the next three days, which will affect every organization and level of the company, including executives, and affected employees are expected to receive severance pay, including access to job resources, health insurance extension and accelerated equity allocation. Lucid expects to complete the layoffs by the end of the second quarter, when the company sells luxury electric cars starting at $87000.

Tesla, Lucid and Rivian are known as the three new car-building forces in the United States. From the perspective of the development path, Lucid and Tesla are very similar, but the development of Lucid is not smooth and there is a funding gap. It is understood that Lucid suffered an operating loss of nearly $2.6 billion in 2022, an improvement from a loss of $4.75 billion in 2021, but Lucid orders still fell short of expectations. As of February 21, 2023, Lucid had orders for 28000 electric vehicles, 6000 fewer than at the end of the second quarter of last year, according to the data.

In fact, Lucid is not alone in large-scale layoffs. In early February, there were media reports that Rivian Automotive, a new power brand in the United States, would cut 6% of its staff, but so far Rivian has not given an exact time for layoffs. Ford, an American carmaker, has also announced that it will cut 3800 jobs in Europe in the next three years. Whether it's Lucid, Rivian or Ford, these companies are cutting jobs in an effort to cut costs and stay competitive in the electric car market.

According to Automotive Industry concern, Lucid was founded in 2007 by Xie Jiapeng (Bernard Tse), a former vice president and director of Tesla, and Wen Shiming (Sam Weng), a former Oracle executive, formerly known as Atieva, an American electric vehicle company headquartered in California. The early positioning was not a complete vehicle company, but focused on the research and development of battery, electric control and electric drive technology, and located the core system provider of new energy vehicles. Namely "Intel in the field of new energy vehicles".

In October 2016, Atieva announced its entry into the auto market and renamed the company Lucid Motors to position luxury electric cars. In the same year, Lucid Motors launched its first model, the Lucid Air, but failed to achieve mass production due to financial constraints. In September 2018, the company received a strategic investment of US $1 billion from the Saudi Arabian Public Investment Fund (PIF), followed by the construction of an Arizona plant and a resumption of the Lucid Air mass production program, which was completed and used to produce Lucid Air models in December of the following year.

In September 2020, Lucid officially launched its first production model, the Lucid Air Pure, which starts at $87400 and mainly competes with luxury brands, including Tesla Model S, Audi, BMW and Mercedes-Benz. It should be noted that in addition to Xie Jiapeng, the Lucid team, including Eric Bach, vice president of hardware engineering, Peter Hasenkamp, vice president of supply chain management, and Doreen Allen, sales director, all come from Tesla with a relatively strong technical background, so it is generally believed in the industry that the biggest competitor of Lucid is Tesla, who is also from the United States. After the listing of Lucid Air, it is directly matched with Tesla Model S.

Similar to the new power of domestic car-building companies, Lucid also landed in the capital market. In February 2021, Lucid announced that it and Churchill Capital Corp IV, a special purpose acquisition company, were listed on NASDAQ in New York through SPAC financing. In July of the same year, they officially traded on NASDAQ (US stock code LCID.O). The stock price rose 11% on the first day of listing, closing at US $26.83 per share, with a total market capitalization of more than US $40 billion. However, the total market capitalization of Lucid has halved as of March 29th US Eastern time. Lucid has a total market capitalization of $13.821 billion.

At present, Lucid plans to open factories in the Middle East and China in addition to the US market. In May 2022, Lucid announced that it had signed a contract with Saudi Arabia to build a manufacturing plant called AMP-2, Lucid's first international plant outside the United States, with an annual capacity of 155000 vehicles. In December of the same year, Lucid posted recruitment messages in China on social networking platforms for positions in areas such as software engineering, public policy, legal counsel, localization engineering, digitization and logistics. Lucid had said it planned to enter the Chinese market in 2023.

From the analysis of the current domestic market, it is not easy for Lucid to enter the Chinese market. According to the statistics of the Federation of passengers, the top three companies of new energy vehicles in 2022 are BYD, SAIC GM Wuling and Tesla China, with sales of 1.7999 million, 442100 and 439800 respectively, of which BYD has a market share of 31.7%. In addition, the delivery volume of the new domestic car-building force "Wei Xiaoli" has also reached 100000 vehicles. Lucid is currently the only Lucid Air model on sale, and its global sales are relatively low. at the same time, large losses have added uncertainties to the follow-up development of the car company. in this context, it is difficult for Lucid to enter the Chinese market on a large scale.

Lucid had previously stressed in its financial results that Lucid had sufficient funds to support its operations until the end of the first quarter of 2024, while the company did not expect it to be profitable in 2023 because it would continue to increase production, with Lucid's production target of 1-14000 vehicles in 2023. Lucid still has a long way to go to make a profit.

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