Electric vehicle (EV) maker Lucid Motors has announced job cuts as it seeks to cut costs in the wake of a slowing market.
The layoffs affect 6% of the company’s workforce, or about 400 people. trim From all employee levels, including leadership and middle management, according to Lucid is one of several electric vehicle makers that have announced job cuts in recent months as consumers have not adopted electric products as expected, according to a filing Friday with the U.S. Securities and Exchange Commission. (Related article: Amazon shareholders reject key union proposal to investigate job losses from green transition)
The company estimates it will have to pay $21 million to $25 million in severance and benefits in connection with the job cuts, which it expects to complete by the end of the third quarter, according to the filing.
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EV sales growth slowed in the first quarter of 2024 as consumers held back on EV adoption, causing their market share compared to traditional vehicles to fall from 7.6% to 7.1%. EV sales grew just 2.7% in the first quarter, compared to 47% growth throughout last year.
Tesla, the world’s largest electric vehicle maker, said in April it would lay off more than 10% of its more than 140,000 employees after global deliveries in the first quarter were slower than expected.
EV maker Rivian also said it would lay off 1% of its workforce in April, after previously announcing it would cut 10% of its workforce. Rivian will cut 6% of its workforce in 2023 and another 6% in July 2022.
Other automakers, including Bentley, General Motors, Ford, Mercedes-Benz and Honda, have also been forced to postpone EV production targets due to slowing market demand.
The Biden administration is trying to encourage consumer adoption of EVs by offering a tax credit of $7,500 per EV depending on where certain parts are made. President Joe Biden also announced that tariffs on Chinese-made EVs will soon increase from 25% to 100%.
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