According to Reuters, on May 24th, the U.S. electric vehicle manufacturer Lucid Group announced that it would cut 6% of its workforce in the United States, approximately 400 employees, becoming the latest electric vehicle maker to downsize due to slowing growth in the electric car industry.
Lucid CEO Peter Rawlinson informed employees in an email that the layoffs would affect employees at all levels, including leadership and middle management, but would not impact hourly workers on the manufacturing and logistics side. The company's latest annual filing showed that it had about 6,500 full-time employees globally as of December last year.
Lucid expects the total cost of the layoffs to be approximately $21 million to $25 million and anticipates completing the downsizing plan by the end of the third quarter of 2024.
Reuters' report noted that high inflation and interest rates have led consumers to hesitate in purchasing relatively expensive electric vehicles, opting instead for cheaper hybrid cars, while automakers have been striving to control costs.
Lucid's competitor Rivian has already undergone two rounds of layoffs this year, with the most recent being last month, when the company laid off 1% of its workforce to boost profitability. Last month, electric car giant Tesla also announced layoffs of over 10% globally.
Earlier this month, Lucid forecasted an increase in its annual capital expenditure as the company is working to expand capacity at its Arizona factory and build a new plant in Saudi Arabia. With support from the Saudi Public Investment Fund, the company also plans to start production of a more affordable midsize car by the end of 2026 and begin production of the Gravity SUV model this year to attract more users.
