Lucid Motors is slashing 12% of its workforce, cutting hundreds of full-time US employees as the struggling electric vehicle maker races toward profitability. The layoffs mark the latest sign of distress in the EV sector, where companies are burning through cash reserves while facing slowing demand and intensifying competition from legacy automakers. According to an internal memo obtained by TechCrunch, the cuts are part of a broader restructuring aimed at extending the company's runway.
Lucid Motors just became the latest electric vehicle startup to wield the axe. The company is eliminating 12% of its workforce, a move that affects hundreds of full-time employees across its US operations, according to an internal memo obtained by TechCrunch.
The timing couldn't be worse for the EV sector. While Tesla continues to dominate with scale advantages and Rivian recently secured additional funding, smaller players like Lucid are finding themselves squeezed between mounting production costs and softening consumer demand. The company's high-end luxury approach, once seen as its competitive advantage, is now looking more like a liability in a market increasingly focused on affordable electric options.
Lucid's cash burn rate has been a persistent concern for investors. The company backed by Saudi Arabia's Public Investment Fund has been hemorrhaging money as it struggles to ramp production of its Air sedan at its Arizona facility. Despite producing what many reviewers call one of the most technologically advanced EVs on the market, Lucid has failed to translate engineering excellence into financial sustainability.
The workforce reduction comes as the broader EV industry faces a reckoning. The explosive growth projections that fueled massive valuations during the SPAC boom have given way to a more sobering reality. Consumer adoption isn't happening as quickly as anticipated, charging infrastructure remains incomplete, and legacy automakers like and are flooding the market with their own electric offerings.
