EV startup Lucid Group, Inc. (NASDAQ:LCID) is planning for its first recall less than four months after it began deliveries of its first vehicles to customers.
What Happened: Lucid is preparing to recall the 2022 model Lucid Air vehicles due to safety issues identified in some cars, the company said in a letter to customers.
The notice is being sent in accordance with the National Traffic and Motor Vehicles Safety Act, according to the company.
The safety issue pertains to an incorrect orientation of the snap ring and coil spring seat in the front strut dampers, the company said. The condition may lead to a sudden loss of ground clearance, vehicle vibration and front brake line damage.
The company said it will undertake inspection of both front strut dampers at its Lucid Studios, Lucid Service Centers or Lucid Customer Care, and if necessary, will replace the affected ones at no extra cost to customers.
Lucid will recall 203 Air Sedans, although it expects only about 1% of the recalled vehicles to have the faulty component, Bloomberg reported, citing the company.
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Why It's Important: Lucid began deliveries of its Air sedan on Oct. 30. Morgan Stanley analyst Adam Jonas said in a recent note that Street estimates for fourth-quarter deliveries hover around 200 vehicles.
If the estimate proves accurate, the recall would affect all of the vehicles delivered.
Jonas said he does not attach much significance to fourth-quarter deliveries but would instead focus on the deliveries forecast for 2022 and the reservation trends.
Lucid went public through a SPAC deal last year, and the shares of the company began trading on the Nasdaq on July 26. After closing the debut session at $26.83, the stock rose to a high of $57.75 on Nov. 17. It has retreated since then amid broader market weakness.
The company is scheduled to report its fourth-quarter results after the market close on Feb. 28.
At last check, Lucid shares were slipping 4.57% to $25.38.
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Photo courtesy of Lucid Motors.
