Lucid, the renowned manufacturer of electric vehicles, has recently implemented a substantial price reduction for its luxurious Air sedans in response to the intensifying competition within the U.S. electric vehicle (EV) industry, triggered by Tesla’s pricing maneuvers.
In an effort to attract more customers and remain competitive, Lucid has slashed the price of its Air Pure model by a noteworthy US$5,000, bringing the cost down to US$82,400 from the original US$87,400.
Moreover, they have significantly reduced the prices of their more robust versions, the Touring and Grand Touring, by an impressive US$12,400, setting the new prices at US$95,000 and US$125,600, respectively.
This enticing offer will remain valid until stocks last, although the company’s spokesperson refrained from disclosing the exact quantity of vehicles available under this deal.
Tesla, a direct rival to Lucid’s Air with its Model S and performance variant Model S Plaid, has also made strategic price adjustments. The initial prices of US$104,990 and US$135,990 for these Tesla models have been trimmed to US$88,490 and US$108,490, respectively, at the start of this year.
Around one year ago, Lucid, predominantly owned by the Public Investment Fund of Saudi Arabia, alongside other industry players, was compelled to raise the prices of their cars due to the impact of escalating raw material costs and persisting supply chain disruptions caused by the COVID-19 pandemic that severely impacted the automotive sector.
However, the scenario has transformed in recent times, as concerns over inflation and potential recession have led to a decline in consumer demand. As a result, Tesla, the leader in the market, decided to adopt a strategy of price reduction this year, setting off a chain reaction in the industry.
For fledgling companies like Lucid, which have been grappling with financial losses, this price-cutting trend, coupled with traditional automakers introducing their own electric models, has posed significant challenges in gaining market share.
While some of the lower-priced electric models are able to leverage the benefits of a US$7,500 federal tax credit under the Inflation Reduction Act to attract potential customers, Lucid’s premium offerings like the Air do not qualify for this incentive.
Headquartered in Newark, California, Lucid is anticipated to report widening losses in its second-quarter earnings, following a decline in production during the April-June period due to supply chain disruptions.
In conclusion, the electric vehicle industry in the United States is witnessing a fierce competition, with companies like Lucid and Tesla employing strategic pricing tactics to stay ahead.
While Lucid has taken the bold step of reducing prices for its Air luxury sedans, Tesla has also joined the race by slashing prices for its Model S and Model S Plaid.
The situation has been influenced by various factors such as rising interest rates, concerns over inflation, and the prevailing supply chain challenges. For Lucid, the road ahead might be challenging, but they are determined to navigate through these obstacles and maintain a strong presence in the EV market.