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Tesla Rival Lucid Finds Itself in an Uncomfortable Situation

Lucid, the manufacturer of high-end electric cars, faces an unfortunate setback.
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It's a headache that Lucid Motors,  (LCID) - Get Free Report which has been producing electric sedans for five months, would have liked to do without. 

But automotive production is often like a hurdle race: Technique or innovation does not guarantee that the runner will cross the finish line without hitting one. Sometimes the athlete hits the hurdle and loses balance but does not fall and stays the course.

Less than four months after delivering its first vehicle, the Newark, Calif., automaker is recalling its vehicles for a possible safety issue linked to a supplier.

Lucid Group "is recalling 203 model-year 2022 Lucid Airs because of the possibility that the front strut dampers were assembled improperly by a supplier," a spokesperson said in an email statement. "Lucid is not aware of any instances of strut-damper failure in a vehicle."

The group, whose production site is in Casa Grande, Ariz., points out that it voluntarily carried out this recall. In other words, regulators -- including the National Highway Traffic Safety Administration -- didn't intervene. That's not often the case with situations like this. 

"This safety-related recall was initiated by Lucid," a spokesperson wrote, adding that: "For Lucid, the safety of our customers and their families is the highest priority, and we are working to resolve this issue as quickly as is possible."

This recall is still annoying for Lucid because it started production only at the end of September. The company and its stylish, clean-lined sedans are considered strong rivals to Tesla  (TSLA) - Get Free Report and its luxury models, the Model S sedan and the Model X SUV.

Lucid Air sedan Lead

Car of the Year 

The company said its service centers and mobile-service fleet have begun inspecting the vehicles. It also wanted to reassure customers who might be concerned that they'd lose their cars for extended periods.

"We have inventory of correct replacement parts if needed," the spokesperson argued. "Lucid estimates that the issue will be present on approximately 1% of the 203 potentially affected vehicles."

Basically, only two vehicles would be affected by this problem. But Lucid, whose main marketing argument is quality, considers the problem sufficiently important to recall the Lucid Air units already in circulation to ensure that they present no danger to their owners. 

Lucid Air was named Car of the Year 2022 by MotorTrend magazine in November.

"The win affirms Lucid Air as the new EV benchmark, with the most advanced electric powertrain available today—technology wholly designed, developed, and manufactured in-house," MotorTrend said in a news release. 

"Designed in Silicon Valley and produced in Arizona, Lucid Air delivers an industry-leading 500+ miles of range and up to 1,111 horsepower from Lucid's proprietary powertrain technology."

On Feb. 28, Lucid will report results, and investors will know how many Lucid Air cars have already been delivered. In September, Lucid said it had booked more than 13,000 orders for the Lucid Air sedan, which has a base price of $77,400.

But in November, when it reported third-quarter financial results, Lucid said that its "customer reservations rose to 13,000 in Q3, reflecting an order book of approximately $1.3B, and have since increased beyond 17,000."

The group did not specify whether this number took into account only the Lucid Air.

The setback comes when the manufacturer of luxury electric sedans must deliver more expensive versions of its model. 

Indeed, Lucid this year plans to deliver the Lucid Air Grand Touring and Lucid Air Touring, base-priced at $139,000 and $95,000 respectively.