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Lucid shares drop as EV maker misses 2023 delivery expectations

Luxury electric vehicle maker Lucid Motors missed Wall Street estimates for fourth-quarter and full-year 2022 revenue, as well as 2023 production and delivery goals, causing the company's stock price to tumble almost 10% in after-hours trading.

That's a particularly rough outcome for a company that's been battling supply chain issues and has had to slash production targets in the past. Lucid had just been on the up after producing 7,180 vehicles last year, exceeding its own production guidance of 6,000 to 7,000 vehicles. Of those vehicles, 4,369 were delivered in 2022. When the company announced this success last month, shares popped briefly.

On Wednesday, Lucid set 2023 annual production targets of 10,000 to 14,000, which is roughly half of the 20,000 to 22,000 deliveries analysts had expected for the year.

Lucid's revenue also fell short of expectations. In the fourth quarter, the company reported revenue of $257.7 million, which is quite shy of analyst expectations of $302.61 million, per Yahoo Finance data. Analysts had expected $661 million for full-year revenue, but Lucid delivered $608.2 million.

Lucid ended the year with about $4.9 billion in total liquidity, which the company says will fund operations into the first quarter of 2024. That includes $1.7 billion in cash and cash equivalents. However, the company's free cash flow is -$938,403.

Lucid burnt a lot of money in 2022 -- the company's loss from operations in Q4 was $749.7 million and in 2022 was $2.6 billion.

Investors were probably also concerned about the lowered demand for the Lucid Air sedan. Lucid said it has 28,000 preorders for the Air, which is down from the 34,000 it reported in Q3. Similar to Tesla, the company recently announced a $7,500 discount for certain Air sedans to boost sales because the $87,400 car -- and that's just the base price -- doesn't qualify for the $7,500 federal EV tax credit.

Lucid noted that the 28,000 reservation number doesn't include the up to 100,000 vehicles over the next 10 years the government of Saudi Arabia has agreed to buy. The country's Public Investment Fund (PIF) holds about 62% stake in Lucid.

There has been recent speculation that the PIF would buy out the remainder of Lucid and take it private, but Lucid wouldn't confirm or deny the rumors during Wednesday's earnings call. By the way, this is the same fund that had been in talks with Tesla CEO Elon Musk to take Tesla private back in 2018. Lucid also plans to build a factory in the country with a planned annual capacity of 155,000 EVs a year.

"As we look ahead to 2023, we'll continue to focus on strong capital discipline, leaving no stone unturned for every cost optimization," said Sherry House, Lucid's chief financial officer, in a statement. "We're gearing for growth, while simultaneously taking a comprehensive look at reducing costs."

This article has been updated with information revealed during Lucid's earnings call.