Lucid faces price pressure from Tesla, slowing economy

Just last week, Tesla cut the price of the Model S sedan by $10,000 to $96,630 including shipping. While the base Air Pure starts at $89,050 including shipping, the current launch edition of the trim has features that push it to just over $100,000.

Lucid also has lost the $7,500 tax credit for buyers laid out in last year’s Inflation Reduction Act. The new law set a $55,000 price cap for electric sedans to qualify, along with income caps for buyers.

On the plus side, Lucid was already preparing to deliver more accessible versions of the Air in recent weeks by removing content compared with its higher-price vehicles, according to previous company statements. The base Air Pure comes with a metal roof, rather than glass, rear-wheel drive rather than all-wheel drive, and a smaller battery pack.

The midlevel Air Touring, which started deliveries in November, comes standard with a metal roof for $109,050 with shipping. A glass roof, which is standard on the Tesla Model S, adds $4,500 to the price of the Lucid. The Air Touring comes with a standard driver-assistance suite, but the Pro version adds $10,000, and an upgraded stereo is $4,000.

Likewise, Lucid said in December that it was removing features from its high-level Grand Touring trim to get the price down. Those standard features included the Pro driver-assistance and the upgraded stereo, as well as 21-inch Aero Blade wheels.

The Grand Touring now starts at $139,650, down from $155,650 previously. Both prices include shipping.

“This flexibility of options for Air Grand Touring is in direct response to customer feedback requesting more choice for these available features,” Lucid said in a press release. “Air Grand Touring retains its 516 miles on a single charge, still comes with superior interior materials, luxury features like massaging seats and 819 horsepower with all-wheel drive.”

Whether such pricing flexibility will be sufficient for Lucid to maintain its momentum remains a question. Lucid is also competing with brands offering new electric crossovers, which many buyers prefer over sedans, McDonald said. Lucid might have had better success by launching a competitor to Tesla’s Model Y crossover rather than starting with a sedan, he said.

Brauer suggested Lucid needs to cut prices, even though that would impact the automaker’s financial results.

“We’re seeing a pullback in car prices across the board,” said Brauer. “This means Lucid has to respond, and lower prices mean lower profits. Lucid is going up against Audi, BMW, Genesis and Mercedes-Benz, plus Tesla, in the luxury EV space. These brands have more resources and much larger dealer networks to withstand an economic downturn.”

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