Money & The Economy

Luxury Electric Vehicle Maker Becomes Latest In Industry To Announce Huge Layoffs

Electric vehicle (EV) maker Lucid Motors announced that the company would be laying off staff in a bid to lower expenses amid a slowdown in the market.

The layoffs will affect 6% of its workforce, equating to around 400 employees, and will trim from all employee levels, including leadership and mid-level management, according to a filing submitted Friday with the Securities and Exchange Commission (SEC). Lucid is one of several EV makers to announce layoffs in recent months as consumers decline to adopt the product at the rate expected.

The company estimates that it will have to pay out between $21 million and $25 million in severance pay and benefits in connection with the layoffs, according to the filing. The planned terminations are expected to be done by the end of the third quarter.

Growth in EV sales slowed in the first quarter of 2024 as consumers decline to adopt the product, leading to a drop in market share compared to traditional vehicles, declining from 7.6% to 7.1%. EV sales grew just 2.7% in the quarter compared to the 47% growth seen as a whole last year.

The world’s largest EV maker, Tesla, announced in April that it would be laying off more than 10% of its workforce of over 140,000 employees following slower-than-expected global deliveries in the first quarter.

EV maker Rivian also announced in April that it would be laying off 1% of its workforce after previously announcing that it would be cutting 10% of the company’s staff. Rivian cut 6% of staff in 2023 and another 6% in July 2022.

Other automakers have had to push back their EV production targets due to the slowdown in the growth of market demand, including Bentley, General Motors, Ford, Mercedes-Benz and Honda.

The Biden administration has sought to bolster EV consumer adoption, paying out a $7,500 tax credit per EV depending on where certain parts are made. President Joe Biden also announced that tariffs on Chinese-made EVs will soon be hiked from 25% to 100%.

Lucid deferred the Daily Caller News Foundation to the SEC filing.

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Will Kessler

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Will Kessler

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