It’s been another week for the auto industry and the analysts who cover it. Lucid’s Q4 earnings and CEO departure garnered a stiff reaction from BofA analysts. JPMorgan is getting bullish on a Chinese Tesla rival, and a used-car giant is venturing into new territory.
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A Lucid Gravity at the 2024 Geneva Motor Show.
Sounding the alarm on Lucid
On February 25, Lucid Motors (LCID) announced that its CEO and CTO Peter Rawlinson stepped down from his leadership roles and would transition to a lesser advisory role within the company.
Prior to his leadership position at the EV company he helped rebrand to Lucid in 2016, the 67-year-old had a heck of a resumé working for some of the most prolific gas and electric auto brands.
Before Lucid, the 67-year-old pioneered using computers to engineer cars for Lotus and Jaguar. Later, he used his skills to lead Tesla’s engineering team in creating its breakout car, the Model S sedan. When he joined Lucid, the company was called Atieva and exclusively made EV batteries. He would rename it Lucid and help turn it into a luxury EV brand known for long-range, high-performance vehicles.
In a statement posted on his LinkedIn page, Rawlinson did not give any reason for his departure, simply stating that it felt like “the right time” following the launch of Lucid’s second model, the Gravity.
“I am incredibly proud of the accomplishments the Lucid team have achieved together through my tenure of these past 12 years,” Rawlinson said. “We grew from a tiny company with a big ambition to a widely recognized technological world leader in sustainable mobility.”
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Although the 67-year-old former CEO will still be at the company in a reduced capacity as its “Strategic Technical Advisor to the Chairman of the Board” and still receive a healthy six-figure stipend, a $2 million stock grant and a company car as part of a two-year “transition agreement,” Bank of America analyst John Murphy downgraded Lucid to from a Neutral to Underperform rating citing his departure as a critical loss that is “much more consequential than understood by the market.”
“He was instrumental in developing the current and future vehicles along with much of the proprietary powertrain technology. We now expect product development to stall, consumer demand to be dampened, and anticipate additional funding opportunities could be put at risk,” he said.
“In addition to leading the company, Peter Rawlinson was largely responsible for assembling the Lucid team, which may increase the likelihood of additional departures. We note that LCID in prior public filings stated that Rawlinson was a key member, and that it is “highly dependent on the services of Peter Rawlinson,” who “is a significant influence on and driver of our technology development and business plan.””
Related: Lucid has an ambitious EV game plan following massive losses
Rawlinson was notably absent from Lucid’s earnings call later the same day. After the bell on February 25, the automaker posted another quarter of eyewatering losses.
For Q4 2024, Lucid reported a net loss of $397 million following a solid streak in the red. In total, the automaker had a net loss of $2.7 billion in 2024, amounting to a loss of about $300,000 from every vehicle it produced.
During its earnings call, Interim CEO Marc Winterhoff thanked and praised Rawlinson for his achievements and contributions to the company, noting that he set up a foundation for its future.
“I could probably spend the entire hour speaking to his accomplishments, but above all, Peter put together an incredible team to advance the company’s mission, and I’m honored to lead this team into the next phase of its journey,” he said.
That “next phase” includes doubling production, further introducing the Gravity SUV, and preparing vehicles built on its smaller “midsize” platform for a reveal date of late 2025 to early 2026.
“I was just down in the design studio, and I can tell you the vehicles look amazing. I think customers are going to love them, and I can’t wait to show them to you,” Winteroff said. “I don’t want to reveal too much, but we are currently planning to unveil them late this year or early next year.”
Visitors visit a Li Auto electric car at the 2024 China (Tianjin) International Auto Show in Tianjin, China, October 3, 2024.
Bull moves for Li Auto
Tesla rival Li Auto (LI) is a major player in China’s ‘New Energy Vehicle’ (NEV) industry. It is a leader in extended-range electric vehicles (EREVs), battery-electric vehicles with gas engines for ultra-long ranges.
Recently, Li has been getting into pure battery-electric vehicles. Last year, it introduced the Li Mega MPV, a minivan that is also its first fully electric vehicle. On February 25, Li Auto stirred up some hype as it began to share images of its second fully electric vehicle, the Li i8, an SUV that shares a similar shape to its bread-and-butter vehicles.
The resulting hype about Li Auto’s announcement drove its Hong Kong-traded shares up 11 percent and has fueled optimism among analysts.
In a note on February 28, JP Morgan analyst Nick Lai raised the firm’s price target on Li Auto stock from $22 to $40 and upgraded the stock’s rating to Overweight from Neutral.
Lai believes that with the launch of the i8, Li auto could be set up for further success, especially as more pure EVs like the i6, i7, and i9 are set to follow over the next year and a half.
A Carvana vending machine in Daly City, California
Buying a new car online?
Amazon may be experimenting with new car sales with its new venture with Hyundai, but a familiar name in online car sales may be joining the “buying a car from your couch” experiment.
On February 28, online used-car sales platform Carvana (CVNA) closed a deal to acquire a franchised dealership in Arizona, a bold move from selling used cars to offering new cars.
Carvana bought Jerry Seiner Chrysler-Dodge-Jeep-Ram in Casa Grande, Arizona. It plans to rename the store Casa Grande Chrysler-Dodge-Jeep-Ram and retain all 41 employees when it reopens on March 3.
“We’re always experimenting and this is a small test in a single market. We are excited to join the Stellantis network and our focus in this test will be learning how to provide great customer experiences at a franchise dealership — we don’t expect it to have any noticeable impact to our results for the foreseeable future,” a Carvana spokesperson told Automotive News.
Carvana’s biggest competitor, brick-and-mortar-centric CarMax, the largest used-vehicle retailer in the U.S., also owned new-car dealerships. Beginning in the mid-1990s, CarMax obtained franchise rights from Chrysler, holding them until 2021, when it decided to focus centrally on the used-car marketplace.
Related: This automaker is eying EV segment Elon Musk, Tesla are ignoring
Not the only EV-Robotics company on the block
During Tesla’s Q1 2024 earnings report, CEO Elon Musk declared the company an “AI, robotics company,” adding that those who “don’t believe Tesla will solve autonomy should not be an investor in the company.”
“We are excited about our autonomy road map; it is only a matter of time before we exceed the reliability of humans — we are really heading toward an EV, autonomous future,” Musk said. “In the future, gasoline cars that are not autonomous will be like riding a horse.”
On October 10, Tesla tripled down on its AI and robotic future at its “We, Robot” event, a Hollywood-esque spectacle that made Will Smith’s I, Robot look more like a warning than a piece of entertainment.
In front of an audience of “believers,” he unveiled the Tesla Cybercab, a low-slung, silver two-seater coupe with butterfly doors and no steering wheels or pedals, as well as the “Robovan,” a locomotive-shaped autonomous vehicle with a capacity for 20 people. Additionally, he showcased the Optimus humanoid robots, which interacted with guests and served drinks at the bar.
However, according to UBS, Tesla isn’t the only EV company out there chasing the AI dream.
In a February 24 note, UBS analysts upgraded XPeng (XPEV) stock from sell to neutral, citing growing investor interest in the company’s artificial intelligence (AI) technology.
“After DeepSeek shocked equity markets, we believe investors are now willing to assign some value for AI potential, even remote applications,” UBS analysts said in its note.
UBS analysts believe that XPeng’s AI focus has made itself from other Chinese EV makers, setting aside close to 50% of its annual R&D budget to intelligence and AI.
“XPeng launched its first large multimodal model, XGPT, in late 2023, and as of now, is the only Chinese EV maker that is working on a humanoid robot,” they said.
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