- Lucid is ramping up production and aiming for 12,000 to 14,000 cars this year.
- But the EV startup struggled with its first vehicles, and insiders say it has more to learn.
- Here’s a look at Lucid’s production – and how the company could change to topple Tesla.
During a February call with investors, Lucid CEO Peter Rawlinson dropped an unexpected detail. Discussing the supply chain issues that have rocked the auto industry, he did not mention chip shortages or a battery crunch. He said the EV startup was struggling to get glass and carpet.
“We’re not talking about foundational technologies here,” Rawlinson said. “We are talking largely, paradoxically, of suppliers of raw materials: finishes, carpets, glass, etc.”
This issue shows Lucid’s difficult position. Like the automakers it competes with — Tesla of course, but also rapidly electrifying players like Ford, VW and GM — Rawlinson’s team faces supply chain shortages, a war of talents, fickle shareholders and winning over wary buyers in an increasingly competitive market.
But Lucid is also simultaneously looking to build cars at scale — and that includes making sure they have windshields, windows, and carpets.
Six months into production, company insiders say Lucid needs to learn its lesson, and soon.
Insider spoke to 13 people from Lucid for this story, including current and former Lucid employees who left the company in the last six months. The sources were granted anonymity, as they are linked by NDAs, but their identities are known to Insider.
Sources from all departments reported 100-hour weeks and working weekends and holidays, which is not uncommon for growing startups.
But sources also said Lucid resorted to buying parts from Amazon amid incidents with suppliers, deploying corporate employees to help in the factory, chasing quality from final assembly and dispatching developers to customers to deal with software issues.
“We were running by the seat of our pants,” said a former supervisor.
Lucid declined to comment for this story, citing a quiet period before earnings release next month.
Lucid missed its 2021 production targets and has already lowered its 2022 target from 20,000 cars to between 12,000 and 14,000. It has delayed the launch of its next car, the Gravity SUV, from 2023 to 2024, and has suggested he might raise prices. And he tackles an SEC investigation, the stock price crash and several shareholder lawsuits.
Clear-headed insiders said the difficulties in producing its $169,000 flagship Air sedan stemmed not only from supply issues, but also from “over-engineering” and car installation issues.
“All the other cars needed some kind of afterthought,” a former engineer told Insider. Installation work was poorly done, with broken glass or ill-fitting parts being common. “The cars would come off the line at 80 per cent.”
Problems with the cantrails – the metal rail running from the front windshield to the rear windshield – left the cars unfinished for days, two sources said. The chrome “skull” on the side mirror of the Dream Edition “required months of iteration over different material finish trials, mold trials,” said a former manager. “During the betas it was a touch supply item because we couldn’t get it right.”
“There were times when we would order parts from Amazon,” the former supervisor said. Lucid was forced to shop online for starter buttons, adhesives, zip ties for cable bundling, and non-safety-critical plastic parts, including a last-minute order for key fob batteries .
At one point, Lucid resorted to sending California-based corporate employees to the factory to help. “They had to ship us out to Arizona for a few weeks just to get cars off the line,” said a former technician.
And insiders say the company’s first cars had to come back for repairs.
While other automakers have dealt with supply shortages by offering fewer features and Tesla has long ignored complaints about its build quality, Rawlinson refuses to compromise. “Unfortunately, you can’t sell a single quality car unless those visible parts are absolutely perfect,” he said on Lucid’s fourth quarter earnings call.
Sources said that stubbornness could hamper Lucid as he evolves.
“There’s nothing wrong with having a high-quality mindset. You spend $170,000 on a luxury electric car, it better be absolutely perfect,” said a former manager. “However, they might have been able to get things done a little earlier if they had focused, not necessarily on Bentley or Rolls-Royce type quality, but maybe Lexus type quality.”
The glass in particular is a special piece crucial to the design of the Air: the expansive windscreen extends into a panoramic sunroof above the passengers. But it is difficult to design and source reliably. Sources said that as a result, only a fraction of the parts that arrive are usable. A former supervisor said it was as low as five out of 100.
“Mr. Rawlinson’s commitment to quality was this: it must be absolutely correct before launching this vehicle to the public,” said the former manager. “Whoever glass maker they go with, they’re going to struggle with it until they get it right.”
Hitches beyond production
Former Lucid developers said the company’s production issues reflect challenges on the software side. As vehicle designs changed before production, cameras and sensors had to change as well. Insiders say this lack of compatibility between equipment and software meant either replacing a part entirely or having apps out of sync with the rest of the car.
Sources have also reported reverting to older software versions to prepare the car for progress checks with executives, hampering long-term progress.
“It was: ‘The CEO is visiting today; the car must work today, “said a former developer. “Because of this, they couldn’t meet production deadlines.”
Lucid owners reported issues with the Air’s software upon delivery, including no access to adaptive cruise control, a common feature in much cheaper cars. “I didn’t know that some features weren’t going to be available,” said one owner in San Diego. The company has since released a number of software updates addressing these complaints, although the car-buying site Edmunds noted this week that this needs to be addressed before it can recommend the vehicle to consumers.
The developers told Insider that they were going to early customers to perform software upgrades that should have been available over-the-air.
Room to improve
Production challenges are not unusual for an automaker, let alone an electric vehicle startup rolling cars off assembly lines for the first time.
“There will always be a problem when you roll your first vehicle off the line, when your first hundred pre-production models roll off the line, then your first customer cars and the first thousand customer cars,” Sam Fiorani, said the Vice President of Global Vehicle Forecasting at AutoForecast Solutions. “It would be hard for anyone to start with a whole new product, a whole new factory and ramp up production on it, and especially hard for a company that has never built a product before.”
Rivian, its lucid rival, also missed its 2021 production target, and Tesla had plenty of trouble even before entering the “production hell” that accompanied the consumer Model 3.
“There were multiple failures in the car: batteries, motors, transmission, gearbox, electronics,” a former technical manager at Lucid said of the Model S. “Tesla has gotten better over the years. years, and I really hope Lucid does the same.”
Some sources said they were confident Lucid could overcome these issues, noting “an agility and agility there that was great and I think is going to really, really serve Lucid in the long run,” said another developer.
Lucid has adapted by changing specs and vendors as needed, Rawlinson told investors in February. He said Lucid would complete Dream Edition customer shipments “as soon as we are able to get enough parts of sufficient quality.”
“It can’t happen soon enough for me,” he added.