The Chinese Market Appeal
China isn’t just the largest car market in the world; it’s set to be the most rapidly adopting EV market too. Eric Bach, Lucid’s chief engineer, underscored the allure of the Chinese market during an interview at the IAA auto show in Munich, Germany.
“Every car manufacturer has to look very deeply or has already looked into China,” Bach stated. He went on to add, “It’s something we are exploring, we are investing in.”
This intent follows closely on the heels of Lucid recruiting Zhu Jiang, previously an executive at the Chinese electric car start-up, Nio.
However, entering China isn’t without its challenges. The arena already brims with dominant players like BYD, Nio, and the U.S. giant Tesla. Bach mentioned, “We haven’t cited a market entry date yet because we just need to get it right.” He stressed that the terms of entry need to be precise, to avoid potential pitfalls.
Lucid’s Current Scenario
While Lucid is keen on the Chinese market, the company currently grapples with its own challenges. The expansion of their Arizona factory and the impending launch of their SUV, Gravity, puts considerable “stress on the system.” As Bach puts it, Lucid will need to gauge just how much they can undertake currently.
There’s also the matter of Lucid’s recent workforce reduction by roughly 18% due to dwindling demand and their reported widening net losses for Q2. However, Lucid’s revenue did see a positive jump. At the same auto show, Lucid showcased its luxury Air Midnight Dream Edition sedan, highlighting its position as a premium brand.
A Shift in Strategy
Amidst all this, Lucid has confirmed plans for a broader market reach. While the company currently operates in the luxury segment, Bach verified that they plan to unveil a mid-sized car in 2026. He also indicated Lucid’s eventual push into the mass-market domain, aiming at a price point around $20,000.
But this transition isn’t immediate. “To build that economies of scale and the ability to achieve those price points, you need to have a very strong and capable supply base that gives you the right pricing,” explained Bach.
The idea is to commence at the premium end, establish trust, and then tap into the mid-range sector to finance their entry into mass-market production.
As Lucid navigates its challenges and opportunities, their potential expansion into China and move towards mass-market models will be watched keenly by industry observers. Only time will tell if Lucid’s strategies bear fruit in the ever-evolving EV market.