- Lucid is ramping up production and targeting 12,000 to 14,000 cars this year.
- But the EV startup struggled with its first vehicles, and insiders say it still has learning to do.
- Here’s a look inside Lucid production — and how the company could change to unseat Tesla.
On a February call with investors, Lucid CEO, Peter Rawlinson, dropped an unexpected detail. Discussing the supply-chain issues that have rocked the auto industry, he didn’t mention the chip shortage or a battery crunch. He said the EV startup was struggling to get glass and carpeting.
“We’re not talking about fundamental technologies here,” Rawlinson said. “We’re talking largely, paradoxically, commodity suppliers: finishes, carpet, glass, and things like that.”
That trouble shows Lucid’s difficult position. Like the automakers it’s competing against — Tesla of course, but also rapidly electrifying players like Ford, VW, and GM — Rawlinson’s outfit faces supply-chain shortages, a war for talent, fickle shareholders, and winning wary buyers in an increasingly competitive market.
But Lucid is also simultaneously figuring out how to build cars at scale — and that includes making sure they’ve got windshields, windows, and carpets.
Six months into production, company insiders say Lucid needs to learn its lesson, and soon.
Insider spoke with 13 people about Lucid for this story, including current and former Lucid employees who have left the company within the past six months. Sources were granted anonymity, as they are bound by NDAs, but their identities are known to Insider.
Sources across departments reported 100-hour weeks and working through weekends and holidays, not uncommon for startups scaling up.
But sources also said Lucid resorted to buying parts off Amazon amid supplier mishaps, deploying corporate workers to help on the factory floor, scrambling for final assembly quality, and sending developers to customer homes to deal with software glitches.
“We were running by the seat of our pants,” a former supervisor said.
Lucid declined to comment for this story, citing a quiet period ahead of reporting earnings next month.
Lucid missed its 2021 production goals and has already lowered its 2022 target from 20,000 cars to between 12,000 and 14,000. It has delayed the launch of its next car, the Gravity SUV, from 2023 to 2024, and suggested it may raise prices. And it’s tackling an SEC probe, falling stock price, and several shareholder suits.
Lucid insiders said challenges in producing its flagship $169,000 Air sedan stemmed not only from supply hiccups but also the car’s “over-engineering” and installation problems.
“Every other car needed some sort of rework after the fact,” one former engineer told Insider. Installation work was done poorly, with broken glass or ill-fitting parts being common. “Cars would come off the line 80% done.”
Problems with cantrails — the rail of metal running from the front to rear windshield — left cars sitting unfinished for days at a time, two sources said. The chrome “skullcap” on the side-view mirror of the Dream Edition “took months of iterations on different material finish trials, molding trials,” a former manager said. “During the beta builds, that was a touch-and-go supply item because we couldn’t get it right.”
“There were times where we were ordering parts off Amazon,” the former supervisor said. Lucid was forced to shop online for push-start buttons, adhesives, zip-ties for wire bundling, and non-safety-critical plastic parts — including a last-minute order for key-fob batteries.
At one point, Lucid resorted to sending California-based corporate employees to the factory to help out. “They had to ship us out to Arizona for a couple weeks just to get some cars off the line,” one former technician said.
And insiders say the company’s first few cars had to come back for fixes.
Where other automakers handled supply shortages by offering fewer features and Tesla has long shrugged off complaints about its build quality, Rawlinson refuses to compromise. “Unfortunately, you can’t sell a single quality car unless those visible parts are absolutely perfect,” he said on Lucid’s fourth-quarter-earnings call.
Sources said that obstinance could hamper Lucid as it scales.
“There’s nothing wrong with having a high-quality mindset. You spend $170,000 on a luxury electric automobile, the thing better be absolutely perfect,” a former manager said. “However, they may have been able to get things going a little sooner had they focused on, not necessarily Bentley-type or Rolls-Royce-type quality, but maybe focused on Lexus-type quality.”
The glass in particular is a specialty piece crucial to the Air’s design: The expansive windshield extends into a panoramic sunroof above passengers. But it’s challenging to engineer and supply reliably. Sources said as a result, only a fraction of the pieces that come in are usable. One former supervisor said it’s as few as five out of 100.
“Mr. Rawlinson’s commitment to quality was: It has to be absolutely right before we release this vehicle to the public,” the former manager said. “Whatever glass manufacturer they go with, they’re going to struggle with that until they get it right.”
Snags beyond production
Former Lucid developers said the company’s production issues mirror challenges on the software side. As vehicle designs changed leading up to production, cameras and sensors also had to change. Insiders say this lack of compatibility between the equipment and software meant replacing a part entirely or applications were out of sync with the rest of the car.
Sources also reported reverting to older software versions to get the car ready for progress checks with executives, hampering long-term progress.
“It was, ‘The CEO is visiting today; the car has to work today,'” said one former developer. “Because of that, they couldn’t meet deadlines for production.”
Lucid owners have reported issues with the Air’s software upon delivery, including not having access to adaptive cruise control, a feature common in far cheaper cars. “I had no idea certain features weren’t going to be available,” one owner in San Diego said. The company has since released a number of software updates addressing those complaints, though car-buying site Edmunds noted this week these have to be remedied before it could recommend the vehicle for consumers.
Developers told Insider they went to early customers’ homes to make software upgrades that should have been available over the air.
Room to improve
Production challenges are not unusual for any automaker, let alone an EV startup getting cars off assembly lines for the first time.
“There’s always going to be an issue when you have your first vehicle off the line, when you have your first hundred pre-production models come off the line, and then your first customer cars and the first thousand customer cars,” Sam Fiorani, the vice president of global vehicle forecasting at AutoForecast Solutions, said. “It would be challenging for anyone to start with a ground-up, brand-new product, brand-new plant, and ramp up production on it, and especially difficult for a company that has never built a product before.”
Lucid rival Rivian also missed its 2021 production goal, and Tesla had plenty of issues even before it entered the “production hell” that came with the mass-market Model 3.
“There were multiple failures in the car: batteries, motors, transmission, gearbox, electronics,” one former Lucid technical lead said of the Model S. “Tesla improved over the years, and I really hope the same for Lucid.”
Some sources said they are confident Lucid can get past these snags, noting “a nimbleness and an agility there that was great and that I think is going to really, really serve Lucid in the long haul,” another developer said.
Lucid has adapted by changing specs and vendors as necessary, Rawlinson told investors in February. He said Lucid would complete customer Dream Edition deliveries “as soon as we’re able to secure sufficient parts of sufficient quality.”
“That can’t happen soon enough for me,” he added.
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