Lucid Group (LCID) is Gearing Up to Recall 203 Air EVs Over a Defect That Affects Just 1 Percent of the Recalled Cars
Lucid Group (NASDAQ:LCID), the EV manufacturer behind the ultra-luxury Air EV, is off to a shaky start to the new trading week as the company is reportedly about to initiate its first-ever vehicle recall.
— TradeTheNews.com (@Trade_The_News) February 22, 2022
As per the news that is just breaking, Lucid Group is about to recall 203 Air EVs over a defect that affected 1 percent of the recalled batch, equating to just around 2 vehicles.
While the nature of the recall is as yet uncertain, Lucid Group is likely to cite safety reasons behind this exercise. Apparently an issue around the front strut damper might be the stimulant behind this recall, as per unconfirmed reports:
— EV-SPACs (@ev_spacs) February 22, 2022
Moreover, Teslarati has quoted an official email to Lucid Group customers that identifies the issue as follows:
“This condition [front damper] may result in sudden loss of ground clearance, vehicle vibration, and front brake line damage, increasing the risk of a crash.”
The company went on to note in the emails:
“A snap fail could occur without warning to the driver. If the failure causes damage to the electrical connections to the damper, the driver would receive a warning message station ‘Suspension Control Fault. Contact Service Center.’ If the failure results in a brake hose leak and the brake fluid level falls below 81.9% of the minimum recommended brake fluid volume, the driver would receive a warning message station ‘Brake Fluid Level Low. Refill Required, Contact Service Center,’ with an accompanying audible warning.”
On a positive note, investors seem to be taking this news in strides, with the stock down just a little over 3 percent at the time of writing.
Of course, the timing of today’s development is quite significant, coming just days ahead of Lucid Group’s second earnings call as a public company. In fact, the milestone is already being billed as a make-or-break moment for the nascent Tesla competitor.
As we noted in a dedicated post, Lucid Group is expected to report $59.87 million in revenue for Q4 2021 and a non-GAAP EPS of -$0.30.
Lucid Group is also expected to provide critical financial guidance for the rest of 2022. As per the current consensus expectations of analysts, the company should report Q1 2022 revenue of around $212 million. Moreover, revenue estimates for the entire FY 2022 are currently pegged at $2.01 billion.
Crucially, the earnings call is expected to provide additional clarity regarding Lucid Group’s ongoing production ramp-up. The biggest uncertainty regarding Lucid’s near-term share price outlook currently revolves around how many vehicles it managed to deliver in 2021 against its target of 520 units. Of course, today’s recall will likely complicate an already shaky delivery disclosure expected next Monday.
Nonetheless, 2022 is expected to be a huge year for Lucid Group, with the company already announcing its intention to start building its overseas footprint. To this end, the company is also seeking to establish its iconic Lucid Studios in select locations across the EU and the Middle East to bolster its sales volume in these diverse geographical locations.
We will continue to update this post with material developments as we await an official confirmation.