Ex-Tesla Team With New EV in Works Missing Just One Thing: Cash

(Bloomberg) -- Electric-car startup Lucid Motors Inc. has a team recruited from Tesla Inc. and a slick concept that boasts impressive performance. Now it’s going to need some money.

The nascent carmaker unveiled its Air prototype in December and had said it would start production of its all-electric luxury sedan in 2018. That timeline has slipped a bit -- Lucid wants to secure Series D financing before breaking ground on a plant in Arizona, then debut the car in 2019, according to chief technology officer Peter Rawlinson.

“We don’t have the money in place. That’s why we need to secure Series D in order to execute this,” Rawlinson, who led engineering of Tesla’s Model S sedan, said Thursday at the New York International Auto Show. “It would be irresponsible to start moving earth or start anything until we have a financial runway to execute that professionally and with absolute integrity.”

Once funding is in place, it will take 24 months before Lucid begins production, Rawlinson said. In November, the company said it would break ground and begin hiring in the first half of 2017, with production beginning in 2018.

The extended timeline means Lucid will fall another year behind Tesla and other competitors in the race to bring the next generation of low-emissions vehicles to market. Still, Rawlinson said he’s confident in the car, partially because he says he’s hired most of his old team away from Tesla.

‘Key Players’

“I have secured many of my key players,” he said. “All my vehicle directors that report to me were with me at Tesla on Model S. So the team that’s doing this knows how to do it.”

The Lucid Air will start at $60,000, or $52,500 after federal tax credits. With the equivalent of 400 horsepower, the car will drive 240 miles on a charge, according to the company. A higher-end, 1,000 horsepower version that can drive 400 miles on a charge will be much more expensive, Rawlinson said, selling for “well north of $100,000.”

That’s how Lucid plans to make money where many electric-car programs have produced red ink. The base model will be profitable because battery costs are low, while the faster versions will compete with the top luxury cars and command loftier prices, he said. Lucid has signed battery-supply agreements with both LG Chem Ltd. and Samsung SDI Co.

Autonomous, Eventually

Lucid has said it plans to build 10,000 vehicles in its first 12 months of production and ramp up to 130,000 annually by 2022. The Air model will come equipped with the hardware required for fully autonomous driving, though the software won’t be ready until 2021 or 2022, Rawlinson said.

“There are a lot of bulls; I’m a bit bearish about the software being available,” he said. “But having that sensor suite means we can collect the data, the big data, and that in itself will help accelerate the process toward full autonomy.”

The Air just completed its first high-speed stability test at 217 miles per hour. Its high performance will compete with German luxury manufacturers rather than just with other electric carmakers, Rawlinson said.

“To be credible there, we have to have a car which can run at Autobahn speeds and compete with that set and show its credibility,” he said. “It’s a bit like the diver’s watch. It has to go to 1,000 meters. Maybe the human body can’t take 1,000 meters, but to be credible that watch has to deliver what it says it can.”

To contact the reporters on this story: Anne Riley Moffat in New York at ariley17@bloomberg.net, David Welch in Southfield at dwelch12@bloomberg.net.

To contact the editor responsible for this story: Craig Trudell at ctrudell1@bloomberg.net.