Lucid Sees Opportunity in Tesla's Abandoned Luxury EV Segment

The news of Tesla's decision to discontinue the Model S and Model X has sent shockwaves through the electric vehicle (EV) community. While many fans are mourning the loss of these iconic cars, Lucid Motors sees an opportunity in their demise. At its recent Investor Day event in New York City, Lucid officials made it clear that they believe the retirement of the Model S and Model X presents a significant sales opportunity for the brand.

According to data from research firm S&P Global Mobility, there were approximately 350,000 Model S and Model X owners in the U.S. as of January this year. When these customers return to shop for newer EVs, Lucid wants to be the one that lures them in with its own luxury offerings.

Lucid's strategy is not without challenges, however. The brand will have to compete against established luxury automakers like Cadillac, Rivian, BMW, Mercedes-Benz, and Volvo, which are all rolling out newer generations of their EVs with improved range, faster charging speeds, and better overall tech.

The company aims to produce between 25,000 and 27,000 vehicles this year, but it won't see significant mass-market volumes until the smaller Cosmos and Earth crossovers arrive in a couple of years. Lucid believes it has an edge in the luxury segment, particularly against Tesla, thanks to its own offerings.

The Air sedan and Gravity SUV were the top trade-in choices among Model S and Model X customers last year, according to data from S&P Global Mobility. This is not surprising given that the Lucids outperform their Tesla counterparts spec-to-spec, with more EPA range, faster charging speeds, and premium interiors.

Lucid's price advantage also gives it an edge in the market. The Air starts at $71,000 before destination, while the Model S will leave a significant hole in your bank account at $95,000. Similarly, the Gravity starts at $80,000 compared to the Model X's $100,000.

While Tesla offers some perks with its Luxe Package, such as free charging and Full-Self Driving (Supervised), these don't seem to be moving the needle for the brand where it truly counts. Lucid sold 10,813 units of the Air last year, while Tesla only managed about 5,889 units of the Model S.

The Model X's sales numbers were slightly higher at around 13,066 units, but this is largely explained by Lucid's own production delays. This year should provide a better indication of Lucid's production capacity for the Gravity and how much demand it really has.

Despite Tesla's continued dominance in the U.S. EV market, its decision to abandon its passenger vehicle business may have handed its rivals their biggest opportunity yet.