Did you hear about the electric vehicle (EV) industry’s latest shake-up? The once high-flying Lucid Motors, which sought to rival Tesla as a dominant force in the EV market, has recently encountered a series of setbacks that have left investors and enthusiasts alike pondering what went wrong with this “Tesla killer.”
Lucid Motors, which captured the world’s attention with its ambitious plans and impressive technology, has faced a tumultuous period. In June 2021, shortly after a headline-grabbing SPAC merger, Lucid’s CEO Peter Rawlinson envisioned the EV market as a “two-horse race” between Lucid and Tesla. With such high hopes, it was a shock to many when Lucid announced that it would produce only 8,000-8,500 cars in 2023—a significant decrease from its original projection and a mere fraction of the optimistic 49,000 units forecasted in 2021.
The company’s slump is underscored by its recent ousting from the Nasdaq-100 Index, illustrating a dramatic fall from grace. But how did Lucid Motors, which was the subject of such investor enthusiasm and achieved a market capitalization of over $90 billion, falter so significantly?
The reasons behind Lucid’s decline are manifold. The global automotive industry has had its share of challenges, among which the severe supply chain crisis of 2021 heavily impacted production across the board. Additionally, the Federal Reserve’s aggressive rate hikes since 2022, rising to levels not
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