LCID Q2 Earnings Miss on Inventory Charges, Revenues Beat Estimates

LCID’s Deliveries and Product Mix Lift Sales

Lucid produced 4,774 vehicles during the quarter, up 24% year over year. Production declined 13% sequentially as management deliberately reduced output to align manufacturing with near-term demand and limit further inventory growth.

Deliveries rose to 3,953 vehicles, up 19% year over year and 28% sequentially. Lucid Gravity accounted for the majority of volumes. Revenues also benefited from a 3.7% sequential increase in average selling price and a $25 million increase in regulatory credit sales. Deliveries in the Middle East improved during the quarter.

Lucid currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Lucid’s Gross Margin Stays Deeply Negative

Gross margin was negative 105%, compared with negative 110% in the first quarter and negative 105% a year ago. Lower production reduced fixed-cost absorption and raised conversion costs per vehicle, offsetting the benefits of higher revenues and improved pricing.

Results included roughly $300 million of inventory impairment charges, which reduced gross margin by 74 percentage points. The charge reflected a reassessment of inventory carrying values and expected demand. Lucid also reduced firm purchase commitments to lower future inventory obligations and cash requirements.

LCID Targets $1.4B in Cash Flow Improvements

Adjusted EBITDA loss widened to $901.1 million from $632.1 million in the year-ago quarter. Operating expenses included $321.3 million of research and development costs, $300.4 million of selling, general and administrative expenses and $33.7 million of workforce-reduction charges.

Management identified $1.4 billion of cash flow improvements for 2026. The plan includes projected inventory savings of $600-$800 million, capital expenditure reductions of about $500 million and operating expense savings of roughly $200 million. Lucid’s U.S. workforce reduction and elimination of the second shift at its Arizona factory are expected to generate $158 million in annualized savings.

Lucid Advances Robotaxi and AMP-2 Programs

Lucid’s robotaxi program with Uber and Nuro moved deeper into testing and validation. The engineering fleet includes nearly 100 vehicles operating across the San Francisco Bay Area and Houston. Production-validation Gravity vehicles have begun reaching partners, with regular production expected in the fourth quarter and service launch targeted for late 2026.

The AMP-2 factory in Saudi Arabia has shifted from construction to industrialization. Manufacturing systems for stamping, body, paint and final assembly are being installed and tested. Lucid expects the facility to be ready for production in early 2027 and for midsize production in the second half of that year.

LCID’s Balance Sheet and Liquidity Position

Lucid ended the June quarter with $3 billion of total liquidity, including about $800 million of cash and investments and $2.2 billion of available borrowing capacity.

Free cash flow was negative $1.48 billion, compared with negative $1.01 billion a year earlier. Net cash used in operating activities totaled $1.22 billion, while capital expenditures were $253.8 million. Inventory increased to $1.38 billion from $1.11 billion at the end of 2025.

Lucid Withholds Guidance

Lucid did not provide quantitative financial guidance. Management expects third- and fourth-quarter production to remain below second-quarter levels as AMP-1 operates with one shift through year-end.

Deliveries are expected to exceed production during the second half as Lucid works down finished-vehicle inventory. Management anticipates sequential delivery growth consistent with normal seasonality, though at a more moderate pace than in the prior year. The company expects its current liquidity and operational measures to provide runway well into 2027.

Key Releases From the Auto Space

General Motors GM reported second-quarter 2026 adjusted earnings of $3.57 per share, up 41.3% year over year. The figure beat the Zacks Consensus Estimate of $3.13 by 14.06%. Revenues increased 1.9% to $48.03 billion and surpassed the consensus estimate of $46.56 billion by 3.15%. General Motors raised its full-year adjusted EBIT guidance to $14-$16 billion from $13.5-$15.5 billion. Adjusted earnings are now projected in the range of $12-$14 per share, up from the prior range of $11.50-$13.50.

Tesla, Inc. TSLA reported second-quarter 2026 adjusted earnings of 33 cents per share, which declined 17.5% year over year. The figure missed the Zacks Consensus Estimate of 50 cents by 34%. Revenues advanced 25.5% to $28.24 billion and surpassed the consensus estimate of $25.81 billion by 9.41%. Tesla expects 2026 capital expenditures to exceed $25 billion and rise further over the next two to three years. 

Ford F reported second-quarter 2026 adjusted earnings of 42 cents per share, beating the Zacks Consensus Estimate of 33 cents by 27.27%. Earnings rose 13.5% from 37 cents a year ago. Automotive revenues of $44.89 billion fell 4.4% year over year and missed the consensus mark of $45.72 billion by 1.81%. Ford’s consolidated second-quarter revenues came in at $48.3 billion, down 3.7% year over year. The company raised its full-year adjusted EBIT outlook to $10-$11 billion from $8.5-$10.5 billion. 

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