Starting with Tesla in the United States, Lucid, a latecomer in the electric vehicle industry amid a price-cutting war, has taken austerity measures by laying off 18% of its employees.
On the 28th (local time), major foreign media reported that U.S. electric vehicle company Lucid plans to lay off about 18% (1,300 people) of its total workforce as part of a restructuring to reduce costs.
Peter Rawlin, Lucid's CEO, said, "We plan to communicate with all employees about this restructuring plan over the next three days," adding, "Reductions will occur across almost all organizations and ranks, including executives."
He explained that the layoffs are part of cost-cutting measures and added, "At this point, we will review all low-priority expenditures and continue ongoing efforts to reduce costs." Lucid plans to announce detailed restructuring plans within this week and complete the restructuring by the second quarter.
Lucid currently has only one model on the market, the luxury sedan electric vehicle 'Air,' and has not yet established a mass production system, so it has not been able to escape a trend of poor performance. Lucid's revenue of $257.7 million (about 335.1 billion KRW) in the fourth quarter of last year was significantly below Wall Street's estimate of $302.6 million. The production volume announced on the 23rd of last month (10,000 to 14,000 units) also fell far short of the forecast (21,815 units).
As concerns about an economic recession grow and poor performance forecasts cause difficulties, the price war in electric vehicles has triggered an increase in layoffs among electric vehicle companies.
Earlier, another electric vehicle company, Rivian, announced last month that it would reduce its workforce by 6% to cut costs. Rivian's layoffs are the second in the past year, following a 6% reduction in total staff last July due to growing recession concerns. Tesla also cut about 10% of its employees last year.
Inside and outside the industry, there is analysis that Tesla's price cuts and the launch of low-priced electric vehicle models by traditional automakers such as Ford and General Motors (GM) are putting pressure on new car demand for emerging companies like Lucid and Rivian.
On this day, Lucid's stock, listed on the U.S. Nasdaq, closed at $7.55, down 7.25% from the previous session, as news of the layoffs spread and the stock price declined sharply.
© The Asia Business Daily(www.asiae.co.kr). All rights reserved.
