Lucid (NASDAQ: LCID) stock fell sharply after the company released its somewhat mixed first-quarter earnings, closing down 6.68% in the red on May 5 and slipping an additional 3.58% to $6.02 in pre-market on May 6.
More specifically, the earnings report showed strong production growth and new strategic partnerships with the likes of Uber (NASDAQ: UBER), but deepening losses and worse-than-expected margins highlighted the company’s ongoing struggle to stay profitable.
Lucid also reported a sharp increase in production, up 149% year-over-year (YOY) to 5,500 vehicles in the past quarter. However, deliveries came in at only 3,093 units, nearly unchanged compared to 3,109 a year earlier.
Lucid performance falls short of expectations
The underwhelming results were largely attributed to seat supplier issues that disrupted deliveries of the Lucid Gravity model in February. However, management claims to have resolved the issue, with deliveries accordingly expected to recover through the rest of 2026.
Lucid’s GAAP gross margin plunged to -110% in Q1, down from -97% a year earlier and -81% in the previous quarter. The decline was due to lower volumes, reduced regulatory credit sales, and tariff-related pressures.
Net losses widened significantly to $1.03 billion, compared to $366 million a year ago. Further, the quarter included $231.1 million in non-cash charges, while adjusted EBITDA margin deteriorated further to -276%.
Moreover, Lucid ended the quarter with $3.2 billion in liquidity, including $0.7 billion in cash and $2.5 billion in available credit. The capital raise included a $200 million investment from Uber and $550 million from Saudi Arabia’s Public Investment Fund (PIF) via convertible preferred stock.
Lucid bets on robotaxis, strikes a deal with Uber
The Uber partnership is the most notable. Namely, Lucid seeks to expand sales of its existing Air and Gravity models, scale production through its upcoming midsize platform, and advance autonomous driving through similar partnerships.
“First, we expanded our partnership with Uber to provide a minimum of 35,000 robotaxis, up from 20,000 previously announced and increased their investment to $500 million, up from $300 million, improving our visibility into long-term demand and revenue in a new and growing market,” CEO Marc Winterhoff said during the earnings call.
What’s more, the earnings call revealed that Sachin Kansal, the Chief Product Officer at Uber, has been nominated for election to Lucid’s board of directors. Naturally, this move further underscores the company’s push toward autonomous driving as a way to forward.
Ultimately, however, Lucid faces significant near-term challenges. For example, the gap between production and deliveries still raises concerns about demand and inventory buildup. Accordingly, traders will likely have to wait to see how well the automotive tech company performs next quarter before any profitability promises are justified.
Featured image via Shutterstock
