Shares in Newark, California-based Lucid were down more than 3.5% on Tuesday. They have lost more than a fifth of their value this year over concerns that EV startups will bear the brunt of Tesla's price war.
"We thought the disclosure was extremely disappointing," Garrett Nelson, senior equity analyst at CFRA Research, told Reuters, adding that he sees "the company facing daunting headwinds for the foreseeable future from a combination of weak demand and ongoing pricing pressures."
Lucid, backed by Saudi Arabia's Public Investment Fund, said it produced 1,550 vehicles in the quarter ended September, down from 2,173 vehicles it made in the previous three months. That means it now needs to make about 4,000 cars in the fourth quarter to meet its annual production target of 10,000 vehicles, a goal it reiterated in August.
After struggling with supply-chain bottlenecks, Lucid in August said it had enough inventory and was not limited by its ability to manufacture. Instead, it pointed to the need to stimulate demand.
Lucid cut prices of its cars by as much as $12,400 in August as part of a special offer, mirroring moves by larger rivals such as Tesla (TSLA.O) whose price war has put pressure on companies across the sector.
Despite that, deliveries in the third quarter rose less than 4% to 1,457 vehicles.
Electric-vehicle demand in the United States has slowed in recent quarters as persistent inflation and high interest rates force consumers to pull back on big-ticket purchases.
"The truth is that consumer demand for many new EV models isn't what it once appeared to be in terms of the robust reservation counts that were once reported," Nelson said.
The loss-making startup also said more than 700 additional vehicles were in transit to its new plant in Saudi Arabia for final assembly.
The company will report its third-quarter results on Nov. 7 after markets close.
