Lucid: Hot
The first half of 2024 has been a good one for luxury EV maker Lucid Motors. Earlier this year, executives significantly lowered their production targets and it seems like managing expectations was the right call. In Q2, the company produced 2,394 vehicles, bringing its year-to-date total to 4,361.
Financially, Lucid is in a relatively sweet spot as well. Thanks to lucrative deals, government grants and investments from its majority owner, the Saudi Arabia Public Investment fund, Lucid ended the first half of the year with $4.28 billion in cash, enough to fund operations until the end of 2025.
“We are pleased with the demand we have been experiencing,” said Interim CFO Gagan Dhingra during Lucid Q2 earnings call in early August. “Deliveries outpaced production in the quarter, which was according to plan. And we worked down inventory to much more manageable levels while still enabling a hub-and-spoke model to facilitate shorter customer delivery times.”
The second half of 2024 also holds promise: Lucid’s Gravity SUV is set to begin production, which will help boost its production and delivery numbers for the year. When we published our first Hot or Not last year, Lucid had a ‘Mixed’ status due to its inability to meet production and delivery projections. Now, executives seem more aware of Lucid’s position and how to best go forward, which is, in some ways, better than overpromising and under-delivering.
VinFast: Mixed
VinFast appeared on the first Hot or Not edition shortly after it went public. At the time, it was too soon to tell where things are going. A year later, the trend is downward: When the stock first debuted on the Nasdaq, it hit a high of $83.30 per share. Now? $3.60 per share.
A lot has gone right for the Vietnamese start-up: VinFast reported that it delivered 12,058 vehicles in the second quarter, a 26% jump year-over year. YTD, Its deliveries are up 92% compared the first half of 2023.
Despite that, leaders are facing what they called “ongoing economic headwinds and uncertainties in different macro-economies,” leading to a lowered delivery target of 80,000 vehicles for the year and the delay—by a whopping three years to 2028—of the opening of a manufacturing plant in North Carolina. Deliveries numbers show why VinFast earned its ‘Mixed’ designation: While lower than anticipated, they’re still more than twice the 34,855 vehicles delivered last year.
The looming question is whether VinFast’s goals are realistic. As it stands, the company has delivered just over 21,700 cars this year, which means it has the lion’s share left to tackle by Dec. 31. We’ve seen this dance before with Lucid and, to an extent, heavy-truck maker Nikola. In that case, it took several consecutive quarters of missed targets before executives began properly managing expectations.
Nikola: Hot
In Summer 2023, Nikola Motors was dealing with a lot of mostly bad news: Battery fires, layoffs and a CEO shake-up were interspersed with bright spots about record revenue and multimillion-dollar deals. Fast forward to the present day and there’s definitely more good news.
Nikola’s Q2 financial results were technically a mixed bag: Revenue came in at $31.3 million, double that of a year ago. However, gross losses were still high at $54.7 million.
Hot or Not, though, isn’t just about quarterly results, but the bigger picture: Nikola’s new leaders have strategically pivoted away from battery electric trucks to hydrogen fuel cell electric trucks, and its bet is paying off so far. The company is opening refueling stations, winning government funds, and, if executives are to be believed, fielding calls from “Big Energy.” The horizon is filled with opportunity for Nikola, it just needs to keep trucking along the hydrogen highway.
Polestar: It’s Complicated
2024 has been a year of change for Polestar, which was largely “cut loose” earlier this year by its parent company, Volvo Cars. Volvo sold most of its stake in Polestar and said it would no longer provide funding, but Volvo’s own parent company, Chinese-owned Geely Holdings, is the one Volvo sold its stake to, which makes things a little hazy.
In late August, Polestar’s CEO, Thomas Ingenlath, who has led Polestar since its inception, resigned. He’ll be replaced with former Nikola and VinFast CEO Michael Lohscheller.
Polestar has also been plagued by accounting issues to the point where the company only reported Q1 results in July and Q2 results in late August. In the first quarter of 2024, Polestar’s deliveries and revenue were down 40% and 36%, respectively, year over year.
In Q2, though, the outlook was far more optimistic. Quarter over quarter, sales were up 80% and revenue up nearly 70% at $575 million. CFO Per Ansgar attributed the improved results to Polestar 2 sales and initial deliveries of Polestar 3.
Year over year, the company managed to bring down SG&A, research and development spending and operating expenses, but revenue was down $118 million, which Ansgar said was “due to lower global volumes and higher discounts.”
It’s tough to place exactly how Polestar is doing for other reasons as well. In one year, the company will have gone from producing one vehicle, the Polestar 2, to three with the addition of the Polestar 3 recently and, later this year, Polestar 4. According to a recent interview, prototype production of Polestar 5 will be ramping up in 2024 as well. Which begs the question: Will portfolio diversification goose interest and sales or will it stretch manufacturing operations and dilute marketing efforts?
Executives at least are very optimistic about the second half of 2024; Ansgar said they anticipate “stronger volumes,” particularly in Q4, and the team is aiming for “double-digit growth margins” by year end.
