Over-promising and under-delivering isn't a good business practice. Lucid Motors is learning that the hard way after the company’s chief technology officer, Peter Rawlinson, admitted to Automotive News that it’s going to need more money before it can make good on its promise to be a game-changing electric car maker.
According to Rawlinson, the company is looking to secure its next series of financing before it can proceed with breaking ground on a $700 million production facility in Arizona that will house the production of the Lucid Air electric sedan. The company is touting the car as the first real challenger to the Tesla Model S. More cautiously, Rawlinson added that it would be “irresponsible to start moving fast or start anything until we have a financial runway to execute that professionally and with absolute integrity.”
The statement comes with a tinge of humility – one that flies against what the company said in December 2016 when it stood on a pulpit and proudly and quite loudly told anybody willing to listen it was going to take the fight to Tesla. Its vehicle was promised to beat the Model S in several conceivable ways, including a range of more than 400 miles thanks to a larger battery pack. The startup alluded to its partnership with Samsung SDI as its trump card, confident that despite the ills Samsung has been through in recent years, it still had a product that could reshape the electric car industry in the future.
None of that will matter though if Lucid can’t find the funds it needs to get the project off the ground. That’s the most pressing issue Lucid Motors will have to deal with, although at this point, it might be better for the company to tone down on the rhetoric before it knows it has a product that can literally live up to them.
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Time to see what Lucid Motors is made of
If you’ve been following the auto industry for a long time, you know that ambitious start-ups that promise the world always run into difficult situations. Lucid is learning about that now, although to be fair, the company does appear confident that it’s going get the money it needs to bring life to its production facility and all the cars that will eventually be built there.
Give credit to the company, too. It’s playing its cards smartly because it understands the importance of having a strong foundation in place before it dives into the deep end of the pool. A lot of start-ups often fall victim to jumping too early, only to end up sinking after they dive. Lucid knows this and is determined not to suffer a similar fate, hence the declaration of needing to secure its next round of funding. Cautious as it may seem, but it’s also a smart and diligent approach.
On the other hand, this admission also serves as a nice reminder that promising the world, even if done ambiguously through words and not actions, may not be a good idea if the same strong foundation isn’t in place yet. Seems like a long time ago now but let’s not forget that Lucid Motors is the same company that stood up late last year, bravado in tow, and made it known that it’s going after Tesla with a product that’s going to make the Model S quake in its proverbial boots.
Lucid’s confidence was and remains admirable, but admitting that it needs more money just to make the project proceed does undercut that bravado in some respects. Maybe next time the company needs to be sure of its plans first before it lays the gauntlet down on the standard bearer.