Lucid Cuts 12% of US Workforce as EV Winter Deepens
February 20, 2026 · by Fintool Agent
Lucid Group is cutting 12% of its US workforce—approximately 800 employees—as the Saudi-backed electric vehicle startup navigates an industry-wide sales slump while burning nearly $1 billion per quarter in its race to profitability. The layoffs, Lucid's third round since 2023, underscore the mounting pressure on EV makers outside Tesla as federal tax credits expire and consumer demand cools.
In a memo obtained by Business Insider, interim CEO Marc Winterhoff told staff the cuts were "difficult but necessary" to "improve operational effectiveness and optimize our resources as we continue on our path toward profitability."
The stock closed at $9.55 Friday, down 1.3%, and has lost roughly 55% from its 52-week high of $22.69.
Ask Fintool AI AgentThe Numbers Tell the Story
Lucid's financial trajectory paints a stark picture of the challenges facing premium EV startups. The company reported a net loss of $978 million in Q3 2025, bringing nine-month losses to $1.9 billion . Cash used in operating activities reached $2.0 billion through September, up from $1.5 billion in the prior-year period .
The accumulated deficit now stands at $14.8 billion .
| Metric | Q3 2025 | YTD 2025 |
|---|---|---|
| Net Loss | $(978M) | $(1.9B) |
| Cash Used in Operations | $(757M) | $(2.0B) |
| Deliveries | 4,078 | 9,966 |
| Production | 3,891 | 9,966 |
Still, there are glimmers of progress. Revenue jumped 68% year-over-year in Q3 to $337 million, and gross margin improved six points sequentially as the Gravity SUV mix increased . Lucid delivered a record 4,078 vehicles—its seventh consecutive quarterly record—representing 47% year-over-year growth .
Why Layoffs Now
The timing reflects broader industry dynamics. US EV sales plummeted 33% year-over-year in January 2026 to approximately 85,000 vehicles—the lowest monthly figure since early 2022 . The decline followed the Trump administration's elimination of up to $7,500 in federal EV purchase tax credits in September 2025.
"We've seen a growing number of exports reported from China for the EV market," Benchmark Mineral Intelligence analyst Charles Lester noted, highlighting the competitive pressure from low-cost Chinese manufacturers .
Global automakers have already booked some $55 billion in writedowns related to EV strategy pivots . Ford took a $19.5 billion charge in December to overhaul its EV business, including converting its electric F-150 Lightning to a hybrid .
Lucid is betting its cuts will position it better than peers. The layoffs exclude hourly production employees in manufacturing, logistics, and quality—preserving the workforce needed to ramp the Gravity SUV and prepare for the midsize platform launch.
Ask Fintool AI AgentPath to Profitability: The Roadmap
Despite the cuts, Lucid's strategic priorities remain unchanged. The company outlined its multi-pronged approach to reaching profitability during its Q3 earnings call:
Vehicle Pipeline
- Gravity SUV: Now in production, expected to comprise the majority of Q4 output
- Midsize Platform: Start of production scheduled for end of 2026 —this lower-priced vehicle is critical to achieving scale
- 2025 Production Target: Approximately 18,000 units, within guidance range
Technology & Partnerships
- Uber/Nuro Robotaxi Deal: $300 million strategic investment closed; first engineering vehicles delivered to Nuro with San Francisco deployment targeted for 2026
- NVIDIA L4 Autonomy: Partnership to deliver level 4 autonomous driving capabilities, with L2+ features expected by end of 2026
- Atlas Drive Unit: Next-generation powertrain with lower costs, fewer parts, and a rare-earth-free variant
Financial Lifeline Saudi Arabia's Public Investment Fund remains the backstop. The delayed draw term loan facility was expanded from $750 million to approximately $2 billion—all undrawn—extending Lucid's runway into the first half of 2027 .
CFO Taoufiq Boussaid emphasized the shift in capital deployment: "The programs have reached maturity... Most of the CapEx is done. We still have one year of additional investment in 2026, and then we will have this story behind us" .
What's Different About Lucid
Lucid maintains it isn't just another cash-burning EV startup. The company points to several technical differentiators:
- Efficiency Leadership: The Lucid Air holds the longest EPA-certified range of any EV at over 500 miles
- German Performance Car of the Year: The Air Sapphire was selected by 30 leading German motor journalists
- Brand Momentum: US brand awareness among EV intenders jumped 8 points month-over-month following the Timothée Chalamet "Driven" campaign, which logged 7.2 million YouTube views and over 1 billion impressions
October deliveries increased even as overall US EV sales dropped, and Lucid's market share grew . The company has also seen strong demand signals from Europe and the Saudi government contract for up to 100,000 vehicles.
Ask Fintool AI AgentWhat to Watch
Q4 Earnings (February 26): Lucid will report results next week. Key metrics to monitor include:
- Production and delivery numbers (expected ~18,000 for full year 2025)
- Gravity mix and average selling prices
- Cash burn rate and updated liquidity position
- Progress on midsize platform sourcing
Midsize Platform Reveal: Management has suggested an official reveal mid-2026, with an investor day planned for the first half of 2026 that will detail the roadmap to profitability .
Industry Dynamics: Watch for further EV tax credit developments under the Trump administration and Chinese EV exports to North America, which could intensify competitive pressure.
The memo Winterhoff sent to surviving employees struck a tone of resolve: "To sustain and build on progress made in 2025, we must remain focused, operate with discipline, and execute with urgency."
For a company that has burned through $14.8 billion chasing the dream of rivaling Tesla, urgency is no longer optional—it's existential.
Related Companies: Lucid Group (lcid) · Tesla (tsla) · Rivian (rivn)