Lucid Motors Cuts 12% of Its Workforce in Aggressive Push Toward Profitability — But Can It Survive the EV Shakeout?

Lucid Group Inc., the Newark, California-based electric vehicle maker backed by Saudi Arabia’s Public Investment Fund, announced on Thursday that it would eliminate approximately 12% of its global workforce as the company intensifies efforts to reach profitability amid a punishing market for EV startups. The layoffs, which affect roughly 750 to 800 employees based on the company’s most recently disclosed headcount figures, mark the latest in a series of painful cost-cutting measures at a company that has burned through billions of dollars since going public in 2021.

The announcement, first reported by TechCrunch, comes as Lucid faces mounting pressure to demonstrate a viable path to financial sustainability. Despite producing what many automotive critics consider one of the most technologically impressive electric sedans on the market — the Lucid Air — the company has struggled to translate engineering excellence into sales volume and, more critically, into anything resembling positive cash flow.

A

Sponsored

Pattern of Painful Reductions as Cash Burn Continues

This is not the first time Lucid has resorted to significant headcount reductions. The company previously laid off roughly 18% of its workforce in 2024 and conducted additional smaller cuts throughout 2025. Each round of layoffs has been framed by management as a necessary step toward operational efficiency, yet the company continues to post substantial quarterly losses. In its most recent earnings report, Lucid disclosed operating losses that far exceeded its revenue, a pattern that has persisted since the company began delivering vehicles in late 2021.

CEO Peter Rawlinson, a former Tesla chief engineer who oversaw development of the Model S, has consistently maintained that Lucid’s technology — particularly its proprietary powertrain and battery systems — positions the company for long-term success. But long-term positioning offers little comfort to employees receiving severance packages or to investors watching the stock price languish well below its post-SPAC highs. Lucid’s shares, which briefly traded above $55 in late 2021 during the peak of EV enthusiasm, have spent much of the past year trading in the single digits.

The Saudi Lifeline: How Long Will Riyadh Keep Writing Checks?

What separates Lucid from many of its EV startup peers — several of which have already filed for bankruptcy or ceased operations entirely — is the depth of its financial backing. The Public Investment Fund of Saudi Arabia, the kingdom’s sovereign wealth fund, holds a majority stake in Lucid and has repeatedly injected fresh capital into the company through equity offerings and direct investments. In 2024 alone, PIF participated in capital raises totaling several billion dollars, and it has shown a willingness to continue supporting the venture as part of Saudi Arabia’s broader Vision 2030 economic diversification strategy.

Yet even sovereign wealth fund patience has its limits. PIF’s investment in Lucid is deeply underwater, and the fund has faced scrutiny from analysts who question whether the returns will ever materialize. Lucid is also building a manufacturing facility in Saudi Arabia — its first outside the United States — which represents both a strategic commitment to its largest shareholder and a significant additional capital expenditure at a time when the company can ill afford missteps. The Saudi factory is expected to begin production in the coming years, initially assembling vehicles from kits shipped from Lucid’s Arizona plant before eventually moving toward full local manufacturing.

The Gravity SUV: Lucid’s Make-or-Break Moment

Much of Lucid’s near-term strategy hinges on the successful launch and ramp-up of the Gravity, the company’s first SUV. The vehicle, which began limited deliveries in late 2025, targets the lucrative luxury SUV segment where consumer demand has proven far more durable than in the sedan market. Lucid has positioned the Gravity as a direct competitor to high-end SUVs from BMW, Mercedes-Benz, and Range Rover, as well as the Tesla Model X and Rivian R1S.

Early reviews of the Gravity have been largely positive, with automotive journalists praising its range — over 440 miles on certain configurations — its spacious interior, and its driving dynamics. But positive reviews alone will not save Lucid. The company needs to demonstrate that it can manufacture the Gravity at scale, manage its supply chain effectively, and generate sufficient demand to meaningfully increase revenue. Lucid produced just over 9,000 vehicles in 2024, a figure that pales in comparison to established automakers and even to some of its startup competitors.

An Industry Under Siege: The Broader EV Startup Crisis

Lucid’s struggles are emblematic of a broader reckoning across the electric vehicle startup sector. The initial wave of enthusiasm that propelled companies like Lucid, Rivian, Fisker, Lordstown Motors, and others to multi-billion-dollar valuations has given way to a harsh reality: building cars at scale is extraordinarily difficult, capital-intensive, and unforgiving of mistakes. Fisker filed for bankruptcy in 2024. Lordstown Motors met a similar fate. Even Rivian, which has the backing of Amazon and has delivered far more vehicles than Lucid, continues to burn cash at an alarming rate and has conducted its own rounds of layoffs.

The macroeconomic environment has compounded these challenges. Higher interest rates have made vehicle financing more expensive for consumers and have increased the cost of capital for companies that are not yet profitable. Meanwhile, traditional automakers like General Motors, Ford, Hyundai, and BMW have aggressively expanded their own EV lineups, increasing competition and putting pricing pressure on startups that lack the manufacturing scale and brand recognition of established players. The federal policy environment in the United States has also introduced uncertainty, with ongoing debates about EV tax credits and emissions regulations creating a less predictable market.

What the Layoffs Mean for Lucid’s Operations and Culture

According to the TechCrunch report, the latest round of layoffs at Lucid affects positions across multiple departments, though the company has indicated that engineering and manufacturing roles critical to vehicle production and the Gravity ramp-up will be largely preserved. Corporate, administrative, and support functions are expected to bear a disproportionate share of the cuts. Lucid has not publicly disclosed the specific financial savings it expects from the reduction, but workforce expenses represent a significant portion of the company’s operating costs.

Repeated rounds of layoffs can exact a toll that extends beyond the balance sheet. Employee morale, institutional knowledge, and the ability to recruit top talent are all at risk when a company cycles through multiple reductions in force within a short period. The EV industry is intensely competitive for engineering talent, and Lucid’s ability to attract and retain skilled workers — particularly those with expertise in battery technology, power electronics, and software — will be critical to its long-term prospects. The company has historically drawn heavily from Tesla, Apple, and other technology firms, but that pipeline may become more difficult to maintain if prospective employees perceive Lucid as unstable.

The Road to Profitability: A Timeline That Keeps Shifting

Lucid’s management has been deliberately vague about when the company expects to achieve profitability, and for good reason — the goalposts have moved repeatedly. When Lucid went public through its SPAC merger in 2021, projections included ambitious production and revenue targets that the company has consistently failed to meet. The original SPAC presentation projected production of approximately 20,000 vehicles in 2023, a figure Lucid fell far short of.

Analysts who cover the company have offered a wide range of estimates for when Lucid might reach breakeven, with most placing it no earlier than 2028 or 2029, assuming the Gravity ramp proceeds smoothly and the company can introduce a more affordable mid-market vehicle — tentatively planned for later this decade — that would dramatically expand its addressable market. That mid-market vehicle, which Lucid has hinted could be priced around $50,000, is seen as essential to achieving the production volumes necessary for economies of scale. But developing and launching a new vehicle platform requires billions of additional dollars in investment, creating a painful catch-22 for a company that is already hemorrhaging cash.

What Investors and Industry Watchers Should Be Tracking

For those following Lucid’s trajectory, several key metrics will determine whether the company can survive the current shakeout. First and foremost is Gravity production and delivery volume over the next four to six quarters. If Lucid can demonstrate a credible manufacturing ramp — moving from hundreds to thousands of units per month — it will go a long way toward reassuring both investors and its Saudi backers. Second, gross margin trends will be closely watched. Lucid currently sells its vehicles at a loss on a per-unit basis, and narrowing that gap is essential before any discussion of overall profitability becomes meaningful.

Third, the cadence and size of future capital raises will signal how much runway the company has and how willing PIF remains to fund operations. Any indication that Saudi support is wavering would likely trigger a severe selloff in Lucid’s stock. Finally, the competitive environment bears close monitoring. If legacy automakers continue to flood the luxury EV segment with compelling products, Lucid’s technological advantages — particularly its industry-leading range and efficiency — may not be sufficient to carve out a sustainable market position. The company’s 12% workforce reduction is a clear acknowledgment that the path ahead is narrower than once imagined. Whether Lucid can thread the needle remains one of the most consequential open questions in the global automotive industry.