Lucid’s top priorities following EV CEO’s departure

Shares of electric vehicle maker Lucid Group were down more than 10% Wednesday following a downgrade of the company’s stock by Bank of America and the abrupt departure of CEO Peter Rawlinson.

Rawlinson, who also served as chief technology officer at the company, was a driving force in its operations to this point, including the decision to go public in 2021. Investors considered Rawlinson to be the face of the company — and crucial to its success.

The company – majority owned by Saudi Arabia’s Public Investment Fund – is in search of a new CEO, stirring uncertainty among Wall Street analysts.

“We think the departure of Lucid’s (LCID) founder, CEO, and CTO, Peter Rawlinson is much more consequential than understood by the market,” BofA Securities analyst John Murphy wrote in a Wednesday investor note downgrading the stock to underperform. “We now expect product development to stall, consumer demand to be dampened, and anticipate additional funding opportunities could be put at risk.”

Interim CEO Marc Winterhoff, formerly the company’s chief operating officer, will attempt to ensure that’s not the case for Lucid.

Winterhoff said in an interview with CNBC his objective is to build upon Lucid’s success rather than change its course. His top priorities include more than doubling vehicle production this year, narrowing losses and increasing customer awareness and technology offerings.

“We have a clear vision. Now my focus will be on execution,” Winterhoff told CNBC Tuesday ahead of speaking to investors on the company’s fourth-quarter earnings call.

Lucid remains far from profitable, but it has been narrowing its gross losses by increasing scale and making its products more efficient.

Its GAAP gross margin, which includes production and sales but does not factor in other expenses, for was a negative 114% in 2024, improvement from a negative 225% in 2023.

“We expect a significant improvement in gross margin in line with what we see in 2024 compared to 2023. So, we are on the right trajectory,” Gagan Dhingra, Lucid’s interim CFO, told investors Tuesday.

For the fourth quarter, the company reported a net loss attributable to common stockholders of $636.9 million, or a loss of 22 cents per share, on revenue of $234.5 million.

Lucid’s first product was the Air sedan, which it began delivering in late 2021. The pricey car has been praised for its styling and technologies, but demand for the vehicle hasn’t been as strong as anticipated.

Winterhoff said the company will continue to produce Air sedans as it begins to ramp up production of its second product, an SUV called Gravity.

Winterhoff said production of the Gravity SUV will gradually build this year. He declined to speculate Tuesday on what percentage of the 20,000-unit production target the vehicle would represent. He noted Gravity ordering for customers in Saudi Arabia began earlier this month.

“We’re expanding our footprint and markets we are very active in, and then absolutely increasing the ramp of Gravity, which is a big, big focus for us right now,” he said during the company’s investor call.

Lucid also is in the midst of developing a new midsize vehicle platform that’s expected to launch at the end of 2026, which both Winterhoff and Rawlinson have described as critical to the automaker’s growth.

As the automaker increases production and the number of vehicles it offers, Winterhoff said Lucid will “double down” on marketing and advertising to increase customer awareness.

“I’m not planning to create a new vision or something like that for the company,” he told CNBC. “What I’m still focusing on is simply operational topics, like, for instance, increasing the deliveries for our customers. We will double down on marketing. You will see much more marketing from us.”

The company’s selling, general and administrative expenses were $900 million in 2024, including a $19.9 million increase in sales and marketing expenses over the prior year. The company’s total marketing and advertising expense wasn’t immediately available.

The Lucid Air has been criticized for its lack of advanced driver-assistant systems such as Tesla’s “FSD” or General Motors’ “Super Cruise.” Certain Air models cost tens of thousands of dollars more than vehicles from competitors with such technologies.

However, Lucid expects to release a new hands-free driving system for customers later this year.

What Lucid lacks in driver-assistant technologies, it arguably makes up for in battery efficiency, as its cars are among the most efficient EVs in the U.S., according to federal data.

Lucid has attempted to capitalize on its battery technologies by offering to sell them to other companies as a way to increase scale and revenue.

Winterhoff said the company remains in “constant discussions” with companies about using Lucid’s battery technology but declined to provide additional details.