Production Forecasts Revised Down by Lucid
Lucid Group, the luxury electric vehicle manufacturer, has announced a slight adjustment to its 2025 production target due to external market challenges and supply constraints. The revised goal now stands between 18,000 and 20,000 vehicles, down slightly from the previous target of 20,000 units.
The mixed Q2 2025 results for Lucid Group were primarily influenced by tariffs and the ramp-up of the Gravity SUV launch. Despite this, the company has shown resilience, producing 3,863 vehicles in Q2 2025, an 83% jump over Q2 2024. However, the production numbers for the first half of 2025 were lower than the original goal due to supply-chain bottlenecks.
To address these challenges and aggressively scale the Gravity SUV production, Lucid is implementing several strategic measures. These include accelerating Gravity SUV production, addressing supply chain bottlenecks, mitigating tariff impact, leveraging liquidity, forging partnerships and boosting brand awareness, and diversifying platforms.
Lucid is drastically ramping up the production volume of the Gravity SUV, a critical step towards scaling volume and reducing per-unit costs. The earlier constraints, such as shortages in China-sourced rare earth magnets, have largely been resolved through vertical integration capabilities, preventing production shutdowns and enabling a faster ramp-up.
To minimize the effect of tariffs, Lucid is focusing on material cost optimization, improving production efficiency, and tighter inventory management. With strong liquidity of approximately $4.86 billion, Lucid has the financial flexibility to fund operations, scale Gravity production, and invest in future platforms, including a midsize platform expected to launch in the second half of 2026.
Collaborations like the $300 million Uber investment and robotaxi deployments aim to boost demand and production scale for the Gravity model. Lucid also plans to launch brand ambassadors as part of its fall advertising campaign, featuring "globally recognized creators" such as actor Timothée Chalamet.
In addition to the Gravity SUV, Lucid is preparing for midsize SUVs and sedans targeting lower price points (approximately $50,000) to compete with competitors like Tesla, helping broaden their market reach beyond the luxury segment.
Quarterly revenue hit a record high of $259 million in Q2 2025, but was impacted by $54 million in tariffs. The potential tariff-related margin headwinds for the rest of the year are expected to be on the "lower end" of the 8% to 15% range projected earlier. Lucid's costs were slightly higher than expected in Q2 2025, with a net loss of $539 million.
Despite these challenges, Lucid Group delivered 3,309 vehicles in Q2 2025, marking its sixth consecutive quarter of record deliveries. The issue of the China-sourced magnet shortage has largely been resolved due to Lucid's existing vertical integration capabilities. The 2026 Lucid Air, which recently began production, comes with a new battery pack that extends its range by roughly 25 miles and copies some components from the Gravity.
Lucid Group's operational discipline goal includes manufacturing, cost control, and "practically every element of the business." The leaders at Lucid Group had originally set their 2025 production goal at 20,000 vehicles, but it has been adjusted to a range of 18,000 to 20,000 vehicles due to supply-chain bottlenecks. Lucid plans to ramp up production, particularly around its Gravity SUV, in the second half of 2025.
In summary, Lucid’s slightly lowered 2025 goal reflects external market challenges and supply constraints but comes with strategic initiatives focused on resolving bottlenecks and aggressively scaling the Gravity SUV to drive growth.
With the focus on addressing supply-chain bottlenecks and increasing production, Lucid Group aims to leverage technology to improve efficiency and scale the production of the Gravity SUV. The company plans to utilize vertical integration capabilities to improve the supply of China-sourced rare earth magnets, thereby boosting the growth of the Gravity SUV.
