Sales Lucid’s Biggest Challenge As CEO Rawlinson Steps DownSales Lucid’s Biggest Challenge As CEO Rawlinson Steps Down

The resignation of Peter Rawlinson as CEO of Lucid Motors comes at a time when the company has a solid and even superior lineup of premium-priced battery-electric vehicles guided by the former Tesla engineer. But the biggest challenges ahead for the Saudi-backed start-up are growing brand awareness and making enough sales to mitigate huge losses.

Rawlinson, who joined Lucid in 2013 and ascended to the roles of CEO and chief technology officer, was instrumental in developing the company's flagship sedan, the Lucid Air, and the new Gravity SUV. Despite his engineering prowess and leadership, however, Lucid has faced significant financial challenges, including a net loss of $3.1 billion in 2024, up from $2.8 billion in 2023, even as revenue increased 36% to $807 million.

Rawlinson’s inability to grow sales has put the CEO in a hot spotlight. Rawlinson received a total compensation package of approximately $379 million in 2022. This included a base salary of $575,000, stock option gains of $5.5 million and substantial stock awards amounting to $373 million.

Lucid went public in 2021 and quickly amassed a market capitalization of $24 billion. Today, Lucid’s market cap is $7.26 billion. That’s a three-year decline in investment value of 92%.

The substantial stock awards in Rawlinson's package were primarily performance-based, linked to Lucid achieving specific market capitalization milestones. In March 2022, nearly 14 million of his 16 million restricted stock units vested after Lucid met four out of five market-cap targets.

This compensation significantly surpasses that of other leading automaker CEOs. For instance, in 2022, General Motors CEO Mary Barra earned $34.1 million, while Ford CEO Jim Farley received $18.3 million.

In 2024, Lucid Motors delivered 10,241 vehicles, marking a 71% increase from the 6,001 vehicles delivered in 2023. But that is pretty low considering the money that’s gone into the company from the Saudi Sovereign Wealth Fund. The company produced 9,029 vehicles during the same period, a 7% rise compared to the 8,428 units manufactured the previous year. This growth was fueled by price reductions and increased marketing efforts to boost brand and discount awareness.

Discounting has made the financial drain worse. "While the company managed to boost year-over-year deliveries through price cuts on its Air sedan, this strategy risks putting the startup in an even more precarious financial position," eMarketer analyst Jacob Bourne says. He cautions that while this approach increased deliveries, it risked placing the company in a more precarious financial position.

Under Rawlinson's tenure, Lucid tried to position the brand as a leader in the luxury EV market, emphasizing technological innovation and high-performance vehicles. The company has set an ambitious goal to double production to approximately 20,000 vehicles in 2025 with the introduction of the Gravity SUV. But even at that level, the company will post a big loss.

Saudi Arabia’s Public Investment Fund holds a 58% stake in Lucid, bringing its total investment to $8 billion since the company went public.

The appointment of chief operating officer Marc Winterhoff as interim CEO signals a potential strategic shift toward operational efficiency and market expansion. Winterhoff has acknowledged the uncertainties facing the EV industry, including potential policy changes, supply chain challenges and looming Trump tariffs, emphasizing the need for a more robust and adaptable business model.

The automaker has begun a CEO search. “The new CEO will help Lucid execute its strategy and prepare for the next chapter,” the company says in a statement.

“In 2025, we will take a much bolder approach on marketing than ever before at Lucid,” Winterhoff says. “We are working on something truly special.”

Lucid’s marketing philosophy has been driven to make the brand premium/luxury. Andrea Soriani, appointed as vice president of marketing in May 2023, previously worked in niche-luxury at watchmaker TAG Heuer, Maserati and Ferrari.

Rawlinson’s departure comes at a time when it is launching the Gravity SUV; the company began taking orders last November. But there has been scant marketing, and Lucid has not yet had a media rollout with test drives and resulting stories and reviews.

The company’s sales scheme until now has been to sell direct to consumers, bypassing dealers, similar to the Tesla sales model. Lucid primarily sells its vehicles directly to consumers through its direct-to-consumer (DTC) sales model. The company also operates Lucid Studios, which are its branded retail locations, and sells vehicles online through its website.

But it is tinkering with the direct strategy. Lucid signed a dealership agreement with the Saudi Automotive Distribution Co. (SADCO) in late 2023, marking the first time the company partnered with a third-party dealer. This aligns with its growing investment in Saudi Arabia, where it also has a factory.

Lucid has hinted at potential dealership partnerships in Europe and Asia, but says it remains committed to a predominantly direct-sales approach, which has its limitations, especially for a little-known brand.

In the U.S., Lucid continues to bypass traditional dealerships, leveraging state laws that permit direct sales while operating showrooms and service centers in key markets.