Upstart EV maker Lucid and Panasonic Holdings introduced a multi-year settlement earlier this week that can present the automaker with lithium-ion batteries for its Lucid Air sedan and upcoming Lucid Gravity SUV.
Panasonic has been supplying batteries solely to Tesla, however is now searching for to diversify its buyer base.
“Panasonic is a fantastic partner with both innovative technology and depth of experience,” mentioned Peter Rawlinson, Lucid’s CEO and CTO. “This agreement will help us meet the growing demand for lithium-ion batteries as we continue to ramp production of the full Lucid Air line-up in 2023 and expect to begin production of our Gravity SUV in 2024.”
The settlement furthers Panasonic’s plans to broaden manufacturing of lithium-ion EV batteries past Japan and into the U.S. with manufacturing coming from each a facility in Japan, in addition to anticipated future manufacturing from its not too long ago introduced $4 billion EV battery manufacturing facility in De Soto, Kansas. Batteries from that facility shall be eligible for tax credit underneath the Inflation Reduction Act.
“With the increased electrification of the automotive market, partnerships with technology-leading EV manufacturers such as Lucid are critical to our mission,” mentioned Kazuo Tadanobu, president, CEO of Panasonic Energy Co. Ltd. “This partnership will help us drive growth of the lithium-ion battery industry and accelerate the world towards a net-zero emissions future.”
Staving off additional manufacturing cuts
Citing provide chain points, Lucid minimize its formidable manufacturing forecasts twice already this yr. Announcements of deliberate manufacturing cuts in February and once more in August decreased the deliberate output from 20,000 to 12,000 after which to six,000 items for the yr. By mid-year, the corporate had produced fewer than 1,000 autos.
In August, Rawlinson mentioned the corporate skilled sporadic shutdowns of its manufacturing line on account of provide chain issues, but in addition confronted issues accelerating its manufacturing line to construct extra autos. Initially he mentioned the corporate couldn’t feed the proper components to the road on the appropriate time and cadence, affecting construct high quality.
Mastering the artwork of just-in-time car manufacturing, generally called the Toyota Production System after the corporate that first developed the methods, isn’t any straightforward feat for any automaker.
However, the corporate did produce 2,282 autos within the third quarter, it and expects to satisfy or exceed the 6,000-unit goal for the yr. Lucid realized third quarter revenues of $195.5 million from deliveries of 1,398 autos. The firm additional touts its 34,000 energetic reservations. Although that’s down from 37,000 earlier within the yr, that variety of reservations would yield as much as $3.2 billion if they’re accomplished as gross sales.
Employee reductions
After elevating the value for its autos by as much as 13% in June, Lucid has begun providing a reduction for workers to purchase a automobile and take supply earlier than the top of the yr. According to Business Insider, the corporate is providing workers an $18,000 low cost in the event that they purchase throughout December.
They’re doing this within the type of a stipend of $500 per pay interval to assist finance the acquisition of a 2022 Lucid Air Grand Touring mannequin, which retails for $154,000. The stipend could be added to every paycheck till $18,000 has been paid. The low cost can also be contingent on the staff persevering with to stay at work for Lucid.
If sufficient workers ink the deal to purchase the automobiles, the good thing about this plan is twofold: not solely will it assist bolster Lucid’s buyer supply and income numbers, but it surely primarily supplies a free mortgage to the corporate, which can understand money this month, and can solely must pay a few of it again over the following 18 months. It additionally locks these workers in for the following 18 months, in the event that they wish to get their full stipend.
Signs level to a rocky street
Lucid has sufficient public curiosity to succeed if they’ll translate reservations into gross sales and deliveries, and the corporate’s specialty fashions have obtained rave opinions. However, the trail from an thrilling product to business success is all the time tough.
Lucid’s challenges with provide chains and manufacturing logistics are actual and have sunk nascent automakers earlier than. The new settlement with Panasonic ought to take some strain off the availability line, and that’s excellent news for Rawlinson and his workforce.
Source: www.thedetroitbureau.com
