Lucid Group Inc (NASDAQ:LCID) stock plunges 18.56% (As on February 23, 11:34:55 AM UTC-4, Source: Google Finance) after the company  forecast 2023 production well short of analysts’ expectations and reported a major drop in orders during the fourth quarter amid weakening demand. The company, which was already battling supply chain and logistics issues and struggling to deliver cars, was hit by aggressive price cuts sparked by Tesla Inc that lured consumers away from its luxury cars amid rising interest rates and soaring inflation. The company, backed by Saudi Arabia’s sovereign wealth fund, Public Investment Fund, delivered 4,369 cars last year, far below the 7,180 units it produced. Lucid said it had more than 28,000 orders as of Feb. 21, down 6,000 reservations from the third quarter, after it delivered about 1,900 vehicles and saw cancellations. That was despite Lucid’s offering a discount of $7,500 on Feb. 9 for purchases of certain variants of the Air sedan before March 31. Lucid reported a cash balance of $1.74 billion in the fourth quarter, after raising $1.52 billion in December. At the end of the third quarter, it had $1.26 billion in cash reserves. The company’s net loss narrowed to $472.6 million, from a loss of $1.05 billion, a year earlier.

LCID in the fourth quarter of FY 22 has reported the adjusted loss per share of 28 cents, beating the analysts’ estimates for the adjusted loss per share of 42 cents. The company had reported the adjusted revenue growth of 35.9 percent to $257.7 million in the fourth quarter of FY 22, missing the analysts’ estimates for revenue of $302.6 million, according to IBES data from Refinitiv.

Lucid said it expects to produce 10,000 to 14,000 luxury electric vehicles this year. Analysts on average expected the company to make 21,815 cars, according to Visible Alpha. n addition, in 2022, Lucid produced 7,180 vehicles, exceeding the 2022 annual production guidance of 6,000 to 7,000 vehicles, but it only delivered 4,369.

Lucid would incur capital expenditures of between $1.5 billion and $1.75 billion in 2023. That’s a 40% jump from 2022, but well below analysts’ expectations of $2.24 billion. Further, the company is pushing out 2024+ estimates and now expect it could take until 2027+ to breakeven on an operating and free cash flow basis (prior 2026). Therefore, LCID will need to raise more capital sooner than we had previously expected.