Startups that make electric cars are struggling in the current economic environment, where access to financing is difficult.
After Sono Motors, a German company developing an electric car equipped with solar panels, announced that the project had been cancelled and 300 employees were out of a job, it was the turn of another firm to announce layoffs.
Lucid Group made the decision to lay off 1,300 employees, about 18% of its total workforce. An internal memo announced that people will learn more details in the coming days. Management positions will be restructured as well, and the process will be completed by the end of the second quarter of this year. The cost of these measures could amount to $30 million, TechCrunch reports.
According to CEO Peter Rawlinson, Lucid has cut costs, but not enough to avoid layoffs.
The American company makes the Lucid Air luxury sedan and plans to launch an SUV, called Gravity, in 2024.
Last month, Lucid Group reported results for 2022. They were weaker than Wall Street analysts expected. What’s more, the company lowered its production target for 2023 from 14,000 cars to 10,000 units.
Another electric car manufacturing startup that is having trouble with production is Rivian. Last year, the company lost $6.8 billion, according to The New York Times. Some customers have been waiting for years for ordered vehicles to be delivered. When the cars finally reach consumers, they often have serious technical problems.
The electric vehicle market is expected to grow 65% globally in 2022, to 10.2 million units sold, according to research firm Counterpoint Research. In the top two positions were Chinese company BYD (1.8 million units delivered to end customers) and US company Tesla (1.3 million cars).