Price Cuts Alone Can’t Save EV Sales

Electric vehicle makers are in a tight spot right now, with sales struggling to the extent that Ford is even considering cutting a shift at the factory that assembles its F-150 Lightning electric pickup truck. Now, EV startups are also reporting issues with their output and companies including Lucid and Fisker have found that price cuts might not be enough to draw in new buyers.

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According to their latest financial results, both Fisker and Lucid saw sales of their electric vehicles struggle in the three months to the end of September 2023, reports Automotive News. Lucid reported that it delivered just 1,457 cars in the third quarter while Fisker cut its global target to 20,000 vehicles after only delivering 900 cars to American buyers.

Both figures are in stark contrast to the lofty goals Fisker and Lucid set themselves, with Fisker targeting 300 deliveries a day before long. In order to try and reach these ambitious targets, both companies have taken the same approach in recent months, they started slashing the prices of their cars.

Lucid was the first to blink in the EV price war that Tesla started. In February, it began offering $7,500 “credits” to some customers, which was followed by a $12,000 drop in the cost of certain models in August. Fisker did the same, taking $7,500 off the price of its top-tier Ocean SUV just four months after the car launched here in the U.S.

Even Ford is feeling the pinch right now. Photo: Ford

Despite the cuts, neither the Fisker Ocean nor the Lucid Air is a cheap car to buy right now. A base Ocean SUV starts at $38,999 while the Air sedan is priced from $82,400.

For Fisker, the proof as to whether the price cut works will come in its fourth quarter results, as the cut only came into effect last month. For Lucid, however, it’s seen sales continue to struggle even with the hefty discount. As Automotive News explains:

The slow sales and price cuts are expected to hit Lucid’s bottom line when it reports Tuesday after the market close, followed by a conference call. Bloomberg Intelligence estimated last month that Lucid will lose $338,000 for every vehicle it makes this year.

In the second quarter, Lucid said its net loss widened to $764.2 million compared with $555.3 million in the same quarter last year.

In fact, Automotive News reports that California-based Lucid stands to lose an eye-watering $338,000 for every vehicle it makes this year. That’s a whopping ten times as much as the losses Rivian takes on each model that rolls off its production line.

Coming to a desert near you for just $38,999. Photo: Fisker

If an extra few thousand dollars slashed off the price can’t boost sales and company profits, what can EV makers do to stay in business? Well, pressuring for vast improvements to America’s charging network would be a start, as buyers often cite this as the biggest reason holding them back from going electric.

Secondly, in the case of Lucid, you could also partner with a legacy automaker looking to go electric. Earlier this year, the American startup signed a deal with Aston Martin that will see its electric tech used across the British company’s future EV models. Whether moves like that are enough to save these companies or their tech, only time will tell.