Shares of electric vehicle maker Lucid Group fell over 10% on Wednesday following a stock downgrade by Bank of America and the unexpected exit of CEO Peter Rawlinson. Rawlinson, also the chief technology officer, played a pivotal role in the company’s operations, including its 2021 public listing. Investors viewed him as integral to Lucid’s success. The Saudi Arabia Public Investment Fund-majority-owned company is now seeking a new CEO, causing 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,” wrote BofA Securities analyst John Murphy, 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, previously the COO, aims to continue Lucid’s trajectory without altering its strategic direction. His priorities include doubling vehicle production this year, reducing losses, and enhancing customer awareness and technology offerings. “We have a clear vision. Now my focus will be on execution,” Winterhoff told CNBC ahead of the company’s Q4 earnings call. Lucid remains unprofitable but has reduced its gross losses by scaling up and improving efficiency. Its GAAP gross margin improved to negative 114% in 2024 from 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,” said interim CFO Gagan Dhingra. For Q4, Lucid reported a net loss of $636.9 million on revenue of $234.5 million. Lucid’s first product, the Air sedan, launched in late 2021, has been praised for its design and technology but hasn’t met demand expectations. Winterhoff confirmed ongoing Air sedan production while ramping up the new Gravity SUV. Gravity production will increase this year, with customer orders in Saudi Arabia starting earlier this month. Lucid is also developing a midsize vehicle platform expected to launch by the end of 2026, deemed crucial for growth. Winterhoff emphasized intensifying marketing efforts to boost customer awareness. “I’m not planning to create a new vision… What I’m still focusing on is simply operational topics, like increasing deliveries for our customers. We will double down on marketing,” he said. The company’s selling, general, and administrative expenses were $900 million in 2024, with a $19.9 million rise in sales and marketing costs. Lucid plans to release a hands-free driving system later this year, addressing criticisms about its lack of advanced driver-assistance systems. Lucid’s battery efficiency remains a strong point, and the company continues discussions to sell its battery technology to other firms. — news fromCNBC
