By Akash Sriram
(Reuters) -Shares of Lucid Group Inc fell over 11% on Tuesday after the luxury electric vehicle maker said it had 3,000 fewer reservations in the third quarter amid an uncertain macroeconomic environment and as borrowing costs rise.
The company said it had over 34,000 reservations in the quarter, down from 37,000 in the second quarter.
The company also said it had $3.85 billion in cash, which would sustain the company at least into the fourth quarter of next year.
“The combination of widening losses, a declining reservation count and its ongoing cash burn will do little to alleviate investor concerns surrounding the company,” CFRA Research analyst Garrett Nelson said.
Chief Finance Officer Sherry House told Reuters in an interview that Lucid would tap into the capital markets as it looks to build a factory in Saudi Arabia.
The company separately said that it would raise about $1.5 billion in total through a share sales program and an additional investment from Saudi Arabia’s Public Investment Fund.
The EV maker reiterated its production forecast of 6,000 to 7,000 vehicles for the year after supply chain snarls crimped its manufacturing and forced it to cut production forecast twice this year.
High prices for battery materials such as lithium, cobalt and nickel, exacerbated by the Russian invasion of Ukraine, have been eating into margins of electric vehicle makers, hurting their bottom line.
Saudi Arabia’s Public Investment Fund, which is Lucid’s largest shareholder with a 61% stake, said last week that it will make electric cars in the kingdom under a joint venture named Ceer with Apple Inc (NASDAQ:) supplier Foxconn.
“There’s no direct collaboration (with Ceer) technically, but I think there is a synergistic direction in terms of leveraging supply chain efficiencies,” Lucid CEO Peter Rawlinson told Reuters.
Lucid’s revenue rose to $195.5 million in the third quarter after it delivered 1,398 vehicles, up from 679 vehicles, last quarter.
The company’s net loss for the quarter ended Sept. 30 widened to $670.2 million, or 40 cents per share, from $524.4 million, or 43 cents per share, a year earlier.