Lucid Motors trims staff by 6% as EV demand slows

Lucid Group Inc., a prominent electric vehicle (EV) manufacturer, has announced plans to reduce its workforce in the United States by 6 per cent, equivalent to approximately 400 employees. This decision comes in response to a slowdown in the growth of the EV market, driven by elevated inflation and high interest rates that are prompting consumers to opt for more affordable hybrid vehicles instead of pricier electric ones.

In a company-wide email, CEO Peter Rawlinson informed employees that the layoffs would impact staff at all levels, including leadership and mid-level management. However, the reductions will not affect the hourly manufacturing and logistics workforce. As of December last year, Lucid employed around 6,500 full-time employees globally.

This move positions Lucid among several other EV manufacturers that are cutting jobs to manage costs and maintain profitability. Rivian Automotive Inc. recently conducted two rounds of layoffs, with the latest round reducing its workforce by 1 per cent to improve margins. Similarly, Tesla Inc. (TSLA.O) announced last month that it would lay off more than 10 per cent of its global workforce.

Lucid expects to incur charges between $21 million and $25 million due to the workforce reduction, with the process anticipated to be completed by the end of the third quarter of 2024. Despite the layoffs, Lucid’s shares saw a slight uptick of 1 per cent in premarket trading following the announcement.

Although the marque’s immediate future involves workforce reductions, Lucid’s vision to expand its production capacity remains steadfast. The firm is working on increasing production at its Arizona factory and constructing a new facility in Saudi Arabia. Backed by Saudi Arabia’s Public Investment Fund, Lucid is set to begin production of a more affordable mid-size car in late 2026 and launch its Gravity SUV this year to attract a broader customer base.

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