Lucid Motors Stumbles: CFO Resignation Sparks LCID Stock Plunge

Dec 18, 2023 04:26 AM EST

PHOTO OF PEOPLE HAVING MEETING — (Photo : PEXELS/ fauxels )

Lucid Motors (LCID) has encountered a significant setback as its Chief Financial Officer, Sherry House, has resigned from her position, effective immediately. This big change has had a big effect on Lucid's stock performance. On Tuesday, it dropped almost 10% because of the departure of this key financial leader.

Stocks Value Dropped

In a press statement, Lucid officially revealed that House had quit, saying that she was leaving the company to look for other opportunities. Despite her departure, House will continue to play an advisory role at Lucid until the end of the year to facilitate a smooth transition.

To fill the void left by House, Lucid Group has appointed Gagan Dhingra, the Vice President of Accounting, as the interim CFO while they commence the search for a permanent replacement. Dhingra has been with Lucid for two years and has a lot of experience in accounting and finance. U.S. News cited a report from Reuters about this latest development for Lucid Motors.

Lucid recently revised its 2023 production target downward, citing lower-than-expected deliveries in the third quarter, which amounted to 1,456 electric vehicles. While this figure represents a slight increase from the previous quarter, it falls far short of the peak achieved at the end of 2022 when 1,932 vehicles were delivered.

Electrek shared details regarding this news about Lucid's current situation. This sudden event, shocked the stock market and Lucid's stock prices have dropped by almost 10% since House's departure.

Peter Rawlinson, CEO of the company, thanked House for her important work during important times in its history, such as the successful launch of the Lucid Air and attempts to increase production. But House's departure comes at a very bad time for Lucid Motors because it is having a hard time growing its manufacturing skills.

This year, the company has had a hard time keeping up with production levels. Last year, production peaked in the fourth quarter. Moreover, the production decline is even more pronounced when compared to the previous year, with Lucid's third-quarter output of 1,550.

Thus, the vehicles marking a 50% decrease from the peak production level of nearly 3,500 vehicles in the fourth quarter of 2022. These challenges have not gone unnoticed by investors, as Lucid's stock saw a sharp drop of approximately 4% in extended trading.

Adding to Lucid's woes, the news of House's resignation comes on the heels of its removal from the Nasdaq 100 index, a move announced by Nasdaq during its annual reshuffling.

Lucid's difficulties in meeting production targets have been evident, as the company had to revise its expectations for 2023 down to 8,000-8,500 vehicles from the initial projection of over 10,000 units, further denting investor confidence.

About Lucid Motors (LCID)

In June 2021, shortly following its high-profile listing, Lucid Motors' CEO, Peter Rawlinson, expressed aspirations to transform the electric vehicle (EV) industry into a competitive "two-horse race," with Tesla as its primary rival.

According to a report by Barchart, fast forward to 2023, and Lucid's production ambitions have significantly dwindled. The company now aims to manufacture a mere 8,000-8,500 vehicles this year, a stark contrast to its initial 12,000 projection for the year's outset and a fraction of the lofty 49,000 estimate made in 2021 before its merger with a special purpose acquisition company (SPAC).

Meanwhile, as shared on its website Lucid claims it is the most advanced electric car, designed in California, assembled in America, and engineered to change the world. Lucid's mission is to develop environmentally sustainable, user-friendly vehicles that cater to various modes of transportation while prioritizing efficiency.