The Lucid Air electric sedans will have to go to the shop for a fix.
David Paul Morris/Bloomberg
Electric-vehicle start-up Lucid has its first recall listed on the National Highway Traffic Safety Administration website. Lucid makes futuristic, luxury EVs, but this recall isn’t going to be fixed with a software patch. Cars have to go into the shop.
Investor interest in automotive recalls is rising after Tesla (ticker: TSLA) recalled almost 1.5 million vehicles so far in 2022. That is a lot of vehicles, considering Tesla delivered roughly 360,000 vehicles in the U.S. in 2021. But all the recalls could be fixed with a software upgrade.
Lucid (LCID) is chasing after Tesla. It is even run by an old Tesla executive, Peter Rawlinson. Now Lucid has had its first recall. The company is recalling about 200 cars because a part might fail, affecting braking.
The Lucid Airs will have to go to the shop for a fix.
Lucid seems to be affected by the recall. Shares are down 2.5% in early trading Wednesday. The S&P 500 and Dow Jones Industrial Average are up 0.2% and 0.1%, respectively.
Recalls don’t always matter to auto maker stocks. Recalls happen. There have been roughly 35 recalls initiated by auto makers so far in 2022.
Lucid, however, is just ramping up production. It started delivering vehicles at the end of 2021. An early recall might be affecting investor confidence a little.
Tesla stock seems to have brushed off recall news. Shares are down about 23% year to date, but the Nasdaq Composite Index is down about 14% year to date. Tesla stock tends to trade in the direction of technology stocks, but in greater magnitude to market moves.
For Tesla, and the Nasdaq, rising interest rates, inflation, and the Russian-Ukrainian conflict have sapped some investor willingness to hold high-growth stocks.
Tesla’s recalls also don’t look to be that costly for the auto maker. Software fixes aren’t as expensive as parts. Tesla didn’t respond to a request for comment about recall costs.
Tesla’s recalls also show how the auto business is changing. More features are being enabled by software and not hardware. It’s a little like what happened to mobile phones after the creation of Apple
‘s (AAPL) iPhone and then the app store.
Write to Al Root at [email protected]
