When Elon Musk tweets, people listen.
Billionaire Tesla (TSLA) – Get a Free Report The CEO and ultimate Twitter owner tends to mess things up when he lets his fingers do the talking.
With his takeover of Twitter, massive layoffs, the reinstatement of former President Donald Trump’s account, and the rescinding of his policy against covid-19 disinformation, there is no end in sight to the controversy.
The changes have caused many advertisers to slow their spend on Twitter and abandon the microblogging website altogether.
On December 9, he used the platform he bought for $44 billion to offer a starkly negative forecast for Tesla’s direct competitor, the electric car maker.
Lucid is reportedly having a hard time
Newark, Calif.-based EV maker Lucid was the subject of a Business Insider article citing internal emails that described an aggressive approach to key cancellations for its Lucid Air electric sedan.
“Every cancellation is a failure,” Lucid read in an email sent to retail employees, and developed a process to “save” those failures.
The process includes potentially barraging customers with phone calls two weeks before cancellations are finalized.
Lucid has had some serious problems. Problems with supply chain and logistics forced the company to lower its production targets twice.
The company said it produced 2,282 vehicles in the third quarter and delivered 1,393 of them to customers. It delivered two-thirds (66%) of the 3,687 cars it produced in January-September.
Lucid’s Twitter page has the tagline, “Here for luxury. Here for performance. Here for goodness.”
But Chief Twit, as Musk calls himself, had his doubts.
Lucid “Not long for this world,” Tweets Musk
“They’re not long for this world,” Musk said tweeted in response to the story.
Lucid, which on Nov. 15 revealed new details about Gravity, its first luxury electric SUV, did not immediately respond to a request for comment.
This isn’t Musk’s first comment about Lucid’s future.
Earlier this year, Musk said during a podcast interview with the Tesla Owners Silicon Valley Club that he owns both Lucid and electric truck startup Rivian. (RIVN) – Get a Free Report “they were following the path of bankruptcy”.
He warned that if the companies “can’t drastically cut costs, they are in deep trouble and will end up in the car graveyard like every other (U.S. automaker) except Tesla and Ford.” (F) – Get a Free Report
Rivian faces its own challenges in managing upsurges and supply chain disruptions.
The company counting Amazon for the third quarter (AMZN) – Get a Free Report as one of its shareholders, recorded a net loss of $1.72 billion against $1.23 billion at the beginning of the year.
Soros and analysts weigh in on Tesla’s rivals
Billionaire investor George Soros is distancing himself from both automakers. He shorted Rivian shares and held put options for 400,000 shares of Lucid, indicating he believes the stock price will decline in the short term.
On Wall Street, Evercore ISI analyst Chris McNally initiated coverage on Lucid Group on November 29 with an in-line rating and a $12 price target.
According to him, Lucid has both extensive vertical integration and a leading e-powertrain aimed at the ultra-premium EV segment. The analyst says Lucid embodies the “aspirational EV.”
McNally said his ranking comes with “a bit of a negative bias” because Lucid “has a long way to go both” to expand its addressable market and meet its funding needs.
Author and electric-car industry analyst Seth Leitman said he didn’t think Lucid was dead yet.
“But if things don’t improve after a year, they’re going to need serious help,” he said. “That’s partly because their stock needs to improve, and so does delivery.”
EV Startups Face Big Hurdles: Duke Professor
Timothy Johnson, a professor of energy and environmental practices at Duke University, noted that starting an automaker is a complex and risky business. According to him, Tesla itself faced serious difficulties to reach its present state.
“You need a lot of capital to get started and to cover the long distance between start-up and volume production,” he said.
“If Lucid’s investors are patient and the company can maintain cash flow and resolve the inevitable early production issues, I believe the EV market is large enough to support another luxury brand.”
“It’s certainly a lot of ‘ifs,'” he said.
Johnson’s larger “concern extends not just to Lucid, but to all EV manufacturers, and involves battery mineral supply and processing capability.”
“As manufacturers of light trucks and vans look to increase their electric offerings, while fixed grid storage increases, we will likely see supply chain constraints this decade that will slow production and increase costs,” he said. he said.
“More established companies locked into supply contracts will do better than startups that may fall victim to supply constraints if the associated delays are significant,” Johnson said.
It should be noted that Musk also praised his competitors.
Ford (F) – Get a Free Report Chief executive Jim Farley has made it quite clear that his company plans to “challenge Tesla and all comers to become the world’s best EV maker.”
However, Musk congratulated Farley when the company announced on Nov. 30 that it produced the 150,000th Mustang Mach-E since production began nearly two years ago.