Paul Salzman

November 5, 2023

Lucid Motors: Is It Time to Pivot Towards a Franchise Dealer Model?

A Bumpy Road to Growth

Lucid Motors, renowned for its technologically advanced electric vehicles, finds itself continually challenged for growth. Despite multiple downward revisions to their outlook, primarily due to supply chain disruptions, the market had initially shown patience. However, even in a post-supply-chain-constrained world, the company is grappling with challenges to meet their adjusted targets.

Product is Strong, Sales are Not

Lucid Air has won the coveted Motor Trend Car of the Year Award. Their cars are praised for their range efficiency and impressive performance. Customers love their comfort and after-sales service quality. There are many cars in their space but arguably none of them offer the combination that Lucid offers. Nevertheless, they're still challenged to make the volumes they seek.

The Dilemma of the Direct-to-Consumer Model

Lucid Motors, like Tesla, initially embraced a direct-to-consumer sales model. This strategy, seemingly wise on the surface, enabled them to maintain proximity to customers, exercise complete control over the buying experience, and retain a larger share of profits. However, it has proved to be a stumbling block in their quest for effective marketing and scaling.

Navigating Franchise Dealer Laws

One of the main obstacles to Lucid's growth lies in franchise dealer laws. In states like Connecticut, New Jersey, Texas, and Washington, Lucid faces legal barriers that prohibit them from selling or offering test drives of their vehicles. This impedes their ability to expand at the desired pace and makes their current strategy challenging to execute.

Pivot Towards a Franchise Dealer Model

The question that looms large is whether it's time for Lucid to pivot? Perhaps they should consider adopting the traditional franchise dealer model. By empowering local dealers to establish a presence in their respective markets, Lucid could potentially enhance their market perception, increase sales volume, and even bolster their stock price. In an ever-evolving industry, where adaptability is key, a strategic shift toward the franchise dealer model might be the solution Lucid Motors needs to accelerate their growth and unlock their full potential.

About Paul Salzman

In a world where complexity reigns, I am a visionary who foresees the power of simplicity through CreativeHydra, delivering transformative cloud and business management solutions for enterprises of all sizes, guiding them towards a prosperous future.

As co-founder of stealth automotive startup, Wheelio, I strive to revolutionize the way we perceive and interact with the locating and purchasing the vehicles that carry us through life

Embracing the profound wisdom of minimalism, I champion the less-is-more philosophy.

My fervor for automobiles, technology, and innovative business concepts fuels my pursuit of enlightenment and progress in the ever-evolving landscape of our world.

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