EV price war: Lucid Motors cuts prices of Air sedan

Tesla’s Model S and its performance version Model S Plaid — direct competitors with the Air — are priced at $88,490 and $108,490 down from $104,990 and $135,990 at the beginning of the year.

Over a year ago, Lucid, which is majority owned by Saudi Arabia’s Public Investment Fund, and its peers had to raise prices of its cars as rising raw material prices and nagging supply chain bottlenecks sparked by COVID-19 hit the automotive industry hard.

But rising interest rates to curb inflation and fears of recession have dampened consumer demand, prompting market leader Tesla to slash prices this year.

That has sent ripples through the industry, making it difficult for money-losing startups such as Lucid, which also face competition from traditional automakers launching EVs, to grab market share.

Helping some lower-priced models woo customers is a $7,500 federal tax credit under the Inflation Reduction Act, but more expensive cars such as Lucid’s Air are not eligible.

Newark, Calif.-based Lucid is expected to show deepening losses in its second-quarter earnings on Monday after reporting a fall in April-June production due to supply-chain problems.