Manufacturing processes face complications due to logistics issues

Lucid's rapid manufacturing of the electric luxury SUV, Gravity, encounters setbacks due to complications in the supply chain.

, and Administrator

2025 August 28 . 4:25 AM

2 min read

Struggles encountered in the delivery process due to logistical issues

Manufacturing processes face complications due to logistics issues

Lucid Motors, the luxury electric vehicle manufacturer, is experiencing a slower-than-expected production ramp-up of its Gravity SUV, primarily due to supply chain issues and production bottlenecks.

Supply Chain Delays

Significant delays are attributed to a shortage of rare earth magnets from China, which are crucial for electric motors. Although Lucid has sourced alternative suppliers to address this issue, the initial impact on production was substantial.

Production Bottlenecks

Despite starting production in early December 2023, Lucid faced challenges in scaling up production smoothly. By the end of June, only nine Gravity SUVs had been delivered, highlighting the difficulties in overcoming these bottlenecks.

Financial Challenges

The company has reported significant financial losses, particularly a $542 million net loss in Q2 2025. This financial strain might also be affecting operational efficiency and investment in production capacity.

However, Lucid remains optimistic about increasing production in the second half of 2025. Interim CEO of Lucid Motors, Marc Winterhoff, acknowledged the slower production rate of the Gravity SUV but expressed confidence in the company's ability to improve.

Despite the challenges, Lucid has seen a significant increase in daily order rates for the Gravity SUV. The company produced 3,863 vehicles and delivered 3,309 vehicles in the second quarter of 2025, a new record.

The limited supply of rare-earth magnets is a result of China restricting exports of these magnets in response to US tariffs under former President Donald Trump. The rare-earth magnets used in electric vehicle motors were restricted by China in April.

Lucid Motors ended the second quarter of 2025 with total liquidity of around $4.9 billion, providing a strong financial foundation for the company to navigate these challenges.

Looking ahead, Lucid Motors is on track to begin production of a mid-size SUV priced around $50,000 in 2026. The team at Lucid Motors has also been working to address bottlenecks in the supply chain and improve production efficiency.

Additionally, the third model in Lucid Motors' brand lineup will be unveiled next year. Both the Lucid Air and Gravity models are headed to Europe.

[1] Lucid Motors Q2 2025 Earnings Report [2] Reuters, "Lucid Motors reports Q2 loss of $542 million on lower deliveries", July 29, 2025 [3] Bloomberg, "Lucid Motors Delivers Just 9 Gravity SUVs in Q2", June 30, 2025 [4] CNBC, "Lucid Motors' Gravity SUV production ramp-up delayed due to supply chain issues", May 10, 2025