Lucid Motors plants flag in NYC
Lucid Motors' new New York City showroom is a flashy workaround to its dealership problem.
Why it matters: The electric vehicle startup is competing in an increasingly crowded market while operating under strict rules that prohibit most car makers from selling directly to consumers on premise in more than two dozen states, including New York.
- Showrooms like Lucid's provide a glimpse into what auto dealerships of the future may look like and how they might operate (like visiting a tailor for a bespoke suit) — or at the very least provide a blueprint of how early EV companies can use retail space to market vehicles and generate demand.
- In the meantime, EV makers including Lucid, Tesla, and Rivian have been banding together to pass laws that would allow them to sell their cars directly in at least eight states, including in New York.
Driving the news: Axios previewed the retail space in Manhattan's trendy Meatpacking district ahead of its public opening on Saturday — and took a demo ride in the high-end $139,000 Grand Touring model of the company’s first car, the Lucid Air sedan.
What they're saying: “It’s about bringing awareness and marketing, in the beginning,” Derek Jenkins, senior vice president of design and brand at Lucid, tells Axios about the showroom, which the company refers to as a "studio."
- At 3,200 square feet, it has enough space for one vehicle, a car parts exhibit including the "skateboard," a virtual reality experience to preview interior and exterior car colors, and a retail area where visitors can browse fabric swatches and branded merchandise.
- None of the showroom staff have "sales" in their title — they are "studio advisors" and "associates" who assist with online ordering or customization questions. No one works on commission even when a customer might initiate and complete an order in store.
Here goes the neighborhood: Tesla's store and gallery is two blocks away and is about 7,300 square feet, while Hyundai's Genesis House is opening a few blocks away and roughly 40,000 square feet.
The opening of Lucid's eighth showroom location comes at a pivotal time for the company and EV makers in general: Not only is there increasing competition, there is also increasing investor scrutiny.
Catch up quick: Lucid announced in February that it was planning to go public through a merger with Churchill Capital Corp IV, a special purpose acquisition company (SPAC).
- The car maker is one of several in the EV space to take this route. Recently, investors have soured on EV SPACs — Lordstown Motors most notably for its specious forward-looking statements.
- Lucid tells Axios it currently has 10,000 reservations (customers who have paid a fully refundable deposit), up from 9,000 in May, and that deliveries are expected to start in the next few months.
The big picture: Change is on the horizon. Electric vehicles are still a tiny fraction of total car sales, but they're expected to make up at least 30% of the market share of new vehicle sales by 2030.
- U.S. consumers don't seem to have a preference of how to buy EVs — with 37% saying in a March Morning Consult poll that they would buy from a traditional dealership compared to 43% saying they would buy from either a manufacturer showroom or online.
- At the same time, more than 60% of auto executives polled through a 2020 KPMG study said the number of physical retail outlets will decline between 20% to 30% worldwide over the next five years.
Be smart: New EV makers, especially pre-revenue, pre-production companies like Lucid, don't need the land or space that traditional dealerships have for inventory. What they need more urgently are customers.