Electric car maker Lucid raises prices of most models by up to 13%

Increase caused by rising raw material costs and global supply chain problems

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Electric car maker Lucid Motors is raising the price of most of its models from June due to rising raw materials costs and global supply chain problems.

The company, backed by Saudi Arabia's Public Investment Fund, will honour existing reservations and hold prices at current levels for any new bookings made by May 31, 2022.

Lucid's chief executive and chief technology officer Peter Rawlinson said the world had “changed dramatically from the time we first announced Lucid Air pricing in September 2020”.

An Air Grand Touring base model will cost $154,000 in the US, up from $139,000, while the price of an Air Touring model has gone up to $107,400, from $95,000. The company's Air Pure model will cost $87,400, up from $77,400.

The new prices reflect an increase of up to 13 per cent.

The price of a new Air Grand Touring Performance model, which was announced two weeks ago, will remain at $179,000 in the US.

Rival electric car maker Tesla raised the prices of its vehicles in March, with chief executive Elon Musk saying on Twitter that the company, along with SpaceX, was struggling with “significant recent inflation pressure in raw materials and logistics”.

Inflation in the US reached 8.5 per cent in March, the highest level since 1981, while the Russia-Ukraine conflict is driving up the prices of metals.

Earlier this year, Amazon-backed Rivian Automotive had to roll back price increases of up to 20 per cent on electric vehicles booked before March 1 after facing backlash from customers, according to a Bloomberg report.

“Looking forward, we remain intently focused on ramping production and are excited about our product road map in 2022 and beyond, with Air Grand Touring Performance deliveries expected in June, Air Touring and Air Pure later this year, and our Project Gravity SUV remaining on target to begin production in the first half of 2024,” Mr Rawlinson said.

The company repeated its annual production forecast of 12,000 to 14,000 vehicles in a statement accompanying its first-quarter financial results.

It reported revenue of $57.7 million on deliveries of 360 vehicles to customers in the first quarter, and ended the reporting period with about $5.4 billion cash in hand, “which is expected to fund the company well into 2023".

Chief financial officer Sherry House said Lucid continues to face global supply chain and logistics challenges, including coronavirus-related factory shutdowns in China, as is the case with many companies in the industry.

“We are working closely with our suppliers to mitigate the impact of disruptions,” she said.

Last month, Lucid signed an agreement to supply Saudi Arabia's government with up to 100,000 cars, a development that is expected to support Riyadh's sustainability drive.

The deal, which includes the flagship Lucid Air and other future models, covers a 10-year period and includes an initial commitment to purchase 50,000 vehicles, plus an option for up to 50,000 additional cars over the same period.

Under the agreement, Lucid will deliver vehicles built and assembled at its Arizona factory and a new manufacturing centre, set to be built in Saudi Arabia, to meet growing demand for electric vehicles globally.

The car maker is backed by the kingdom's Public Investment Fund.

Global electric vehicle sales more than doubled to 6.6 million in 2021, figures compiled by the International Energy Agency show.

The worldwide EV market currently accounts for 9 per cent of the overall market share of the car industry, more than double the 4.1 per cent share in 2020, when three million units were sold, and more than triple 2019's 2.5 per cent share.

Updated: May 17, 2023, 4:11 PM