Lucid Group (NASDAQ:LCID) saw its shares climb roughly 6.5% by midday Friday, outperforming electric vehicle peers Tesla (NASDAQ:TSLA) and Rivian (NASDAQ:RIVN). The stock traded at $5.455 as of 12:46 p.m. EDT, bouncing off an intraday low of $5.07 and approaching its session high of $5.55. Approximately 8.06 million shares changed hands by midday.
The rally came after Lucid disclosed significant cost-cutting measures in a June 22 regulatory filing. The company plans to reduce its U.S. workforce by about 18%, eliminate the second shift at its AMP-1 factory, and incur roughly $32 million in cash restructuring charges. Lucid expects these actions to generate around $158 million in annualized savings, with most of the restructuring completed by the end of the third quarter.
While the $32 million charge represents about 2.4 months of the projected annual savings, the full-year savings amount to nearly five times the cost of the cuts. This arithmetic has attracted dip-buyers focused on the potential for improved cash flow. However, the savings pale in comparison to the company's first-quarter loss.
Lucid reported a net loss attributable to common stockholders of $1.134 billion for the first quarter, alongside revenue of $282.5 million. During the quarter, the company produced 5,500 vehicles but delivered only 3,093, underscoring a gap between output and customer demand. The planned annual savings of $158 million equal roughly 56% of first-quarter revenue but only about 14% of the quarterly loss.
Interim CEO Marc Winterhoff stated that Lucid is “aligning production and delivery with customer demand,” while CFO Taoufiq Boussaid emphasized “driving structural cost improvements.” The job cuts and shift reduction are part of a broader effort to control expenses amid softer demand.
Lucid’s challenges extend beyond cost-cutting. In May, the company suspended its full-year production guidance after supplier issues delayed shipments of the Gravity SUV. Earlier, Lucid had targeted production of 25,000 to 27,000 vehicles for 2026. The company has now reinstated its 2026 production outlook, but investors are waiting to see if upcoming models such as the Gravity, Cosmos, and a planned robotaxi can compensate for lower factory output.
Analyst firm Zacks maintained a #4 Sell rating on Lucid in a Thursday note, citing the second round of layoffs, leadership changes, and the development of the Cosmos SUV. Zacks noted that Lucid aims to price the Cosmos below $50,000, target a drag coefficient of 0.22, and achieve over 300 miles of range, with a launch expected in 2027.
The market’s reaction suggests cautious optimism about the cost-saving initiatives, but the fundamental picture remains challenging. Lucid’s cash burn could slow if the savings materialize as planned, which would be a key positive for investors. For now, the stock trades at $5.455, reflecting a mix of hope and skepticism.
