Lucid Motors eyes US, China with ambitious electric car roll out

PUBLISHED : Thursday, 15 December, 2016, 3:46pm
UPDATED : Thursday, 15 December, 2016, 11:01pm

US-based electric vehicle start-up Lucid Motors, which is partially backed by Chinese money, on Wednesday unveiled its US$100,000 luxury concept car with plans to put the vehicle on the road by 2018 to compete with Tesla Motors.

Lucid, which counts China’s LeEco, venture capital firm Tsing Capital and state-owned Beijing Auto among its investors, is the latest company attempting to build electric cars from scratch to crack the US and Chinese car markets.

It joins the ranks of carmakers such as LeEco-backed Faraday Future and Karma Automotive, a subsidiary of Chinese automotive components company Wanxiang Group Corporation, in a race to compete with and even unseat Elon Musk’s Tesla Motors.

The company showed off its Lucid Air vehicle at a launch event on Wednesday. The Air, which is still a concept vehicle, comes with two electric motors that deliver a combined 1,000 horsepower, offers a driving range of over 640 kilometres, and will purportedly be able to accelerate from zero to 100 km/per hour in just 2.5 seconds.

Lucid has ambitious plans in that it hopes to start producing cars by 2018, leaving less than two years for the company to build its factory, finalise the production design for the Lucid Air and manufacture the vehicles.

The company has already begun taking US$2,500 deposits from consumers eager to get their hands on the car in 2018, despite the fact that the company’s planned factory in Arizona has yet to begin construction. It hopes to first crack the US market before moving on to China and Europe.

“There are many such auto start-ups in the industry now, but whether they are able to succeed is still too early to say,” said Zhang Yu, managing director of Shanghai-based research firm Automotive Insight. “Out of the lot, if even one manages to succeed, that would be good news.”

There are many such auto start-ups in the industry now, but whether they are able to succeed is still too early to say
Zhang Yu, Automotive Insight.

“It is definitely positive that so much investment is flowing into this industry, because it helps to accelerate the development of electric cars. The risk is extremely high, but if Chinese investors are willing to put in the money and understand the risks involved, then there is nothing wrong with that,” Zhang said.

However, Zhang has doubts whether companies like Lucid can find success in the Chinese market.

“About 50 or 60 per cent of car buyers in China today are first-time buyers, and they are likely to buy a petrol car instead of a high-end, fancy electric vehicle,” he added. “Furthermore, China’s [battery] charging infrastructure is less mature than in the US, which will make electric cars less appealing to consumers.”

Zhang said that if electric vehicle start-ups like Lucid Motors are able to find their footing in the US like Tesla did, then the chances of success in the Chinese car market will be higher.

“Such high-end electric cars will likely only appeal to the young and the rich in China, who are more technologically savvy,” he added.

LeEco, which has a minority investment in Lucid Motors, has been pouring money into Faraday Future and its own electric vehicle, the LeSee Pro. The company has so far invested at least 10 billion yuan into its car unit.

Although LeEco recently encountered cash flow problems, resulting in several management restructures and a retrenchment round at subsidiary LeSports, the company has reiterated that it will not give up its electric car dreams.

LeEco chief executive Jia Yueting on Sunday reassured investors that the company’s fundraising plans were going smoothly, adding that the company was making substantial progress at its car factory in eastern China’s Deqing county.

Faraday Future is also expected to unveil a production model of its FFZero1 electric vehicle at the CES electronics trade show in Las Vegas in January.