Future of electric cars

                            

               It celebrated the production of its first cares less than two months ago. Deliveries have just begun. But for company with so few vehicles on the road, Lucid Motors is generating a lot of buzz. Its debut sedan, the $ 169,000 Lucid Air Dream Edition, has been hailed for its workmanship and the ability to travel a record 520 miles, or 840 kilometers, on single charge.

              Motor trend magazine declared it the car of the year and Lucid’s shares have more than double in the last month valuing the company at $ 85 billion more than Ford Motor’s. The accolades are a tribute to Lucid’s Chief Executive, Peter Rawlinsons, an auto industry veteran who engineered the Model S, the sedan that established Tesla as a serious carmaker.

               He hopes that the Air will do the same for Lucid. The first product defines the brand Mr. Rawlinson, 64, said recently in an interview at Lucid’s factory in the Arizona desert. Well need to create a technological tour de force, and I think that’s what we’ve got in Lucid Air, we define our bands, we define our future. Lucid illustrates investors’ enthusiasm for everything having to do with electric vehicles. But the list of things that could go wrong is long-44 pages long, in the mandatory disclosure of potential risks in Lucid’s stock offering prospectus.

            The documents notes that the company lacks experience in mass-producing cars, that it has no service network and that it is highly dependent on Mr. Rawlinson. There are also plenty of investors who see a teach bubble in the making and are betting it will burst, short sellers, who se borrowed stocks to make money if a company’s share price goes down, have wagered $.2.35 billion that Lucid won’t be able to maintain its lofty valuation, according to data from S3 Partners, a New York firm that tracks short sales.

                Lucid shares languished for several months after the company made its stock market debut in July.  They began climbing in October, after Road & Track declared that the Air was “so good it should make Tesla sweat. Mr. Rawlinson’s credibility with investors stems largely from his resume. He worked at Jagur and was chief engineer of Lotus, the British sports car maker. His name is one dozens of patents for battery technology or other innovations. Mr. Rawlinson oversaw Lucid’s development of the batter used by all the terms in the Formula Electric Vehicle Racing Circuit.

            But mass producing automobiles is challenge of a different magnitude. Initial versions of the Air cost almost $ 35,000/- more than a top of the line Tesla Model S Plaid. To be profitable, Lucid must appeal to more than just a per wealthy elite. Lucid’s biggest risks are getting to scale and capacity said Daniel Ives a senior analyst at Wedbush Securities who follows the electric car industry. The first phase has been significantly successful. Now it’s about the next level of adoption.

               Lucid plans to offer a version of the Air next year that will cost $ 70,000/- after a federal tax credit. And it intends to produce 5,00,000/- cars a year by 2030 with a lineup that is to include a sport utility vehicle and a pickup. The company had spent $4.2 billion by June, and its prospectus noted that it might be years away from making money. To avoid the problems that plagued Tesla in its early days, when for a while it was assembling cars in tents, Mr. Rawlinson is relying on people like Eric Bach, Lucid’s chief engineer. Mr. Bach another Tesla refugee, has worked at Volkswagen and takes a very German approach to manufacturing. He can ex-pound at length on the art of achieving narrow body gaps, the spaces between sheet metal that to engineers are a measure of quality.

                We are not intending to put any tents up Mr. Bach said, except perhaps to have a party. The market it increasingly crowded. Automakers like Ford, General Motors and Volkswagen have invested heavily in electric vehicles. Mr. Rawlinson has confounded naysayers before, some people doubted that the Model S would be a success or said Lucid could not build a car with range of 500 miles and get it out of the factory this year. There is a track record here of me making claims which seem unrealistic but are absolutely based on science, he said.

                Success would have an extra bit of sweetness for Mr. Rawlinson, who left Tesla amid rancor with Elon Mush, the company’s mercurial chief executive. The main reason he quit Tesla in 2012, Mr. Rawlinson said was to care for his ailing mother in Wales, but he added that he had also felt mistreated by Mr. Musk. I had a boss who was not treating me very well, he said declining to elaborate on the nature of the mistreatment.

                Mr. Rawlinson, who comes across as good humored but intense and detail oriented, is self-effacing in a way that Mr. Musk is not. He says, for example, that he wants to hire people who are smarter than he is. If I have done my bob right, I will be the dumbest guy left in the room, and I can walk out and throw away the key and leave them to it, Mr. Rawlinson said. After it began in 2007 as a batter maker named Atieva, the company had several near-death experiences. Atieva shifted focus toward building electric vehicles in 2014 and changed name to Lucid two years later. It struggled to raise enough money for the capital intensive business of building cars, but was saved in 2018 by a $ 1 billion investment from the Public Investment Fund of Saudi Arabia, which remains a majority shareholder.

                Everyone says, Oh, the tough thing about a start-up is getting an assembly line going. Mr. Rawlinson said of the experience. Let me tell you what’s tough getting finance for the startup not to go bankrupt. Stock bonuses tied to Lucid’s share price are likely to make Mr. Rawlinson a billionaire if he is not already. But Alejandro Agag, the founder and chairman of Formula E, said he did not think that Mr. Rawlinson was motivated by money. “Of course, it is not to have money” Mr. Agag said what drives him is to make the best car. Lucid started delivering the first of 520 Air Dream Edition cars to customers later last month, with plans to ramp up production and deliveries of three other Air models soon.