Lucid Group (LCID, Financial), an electric vehicle manufacturer based in Newark, California, is grappling with potential cost increases due to tariffs imposed by former U.S. President Donald Trump. Interim CEO Marc Winterhoff highlighted that the global nature of the automotive supply chain necessitates importing raw materials and components, even for U.S. manufacturers. This could lead to higher car prices for American consumers, according to Winterhoff.
To mitigate these costs, Lucid is working to localize its supply chain, particularly for lithium-ion battery materials. In June, the company signed an agreement with Graphite One to boost the supply of U.S.-processed graphite, a critical battery component. Since 2022, Lucid has been collaborating with Japan's Panasonic Holdings on battery supply, a partnership that has been economically viable due to advanced manufacturing production credits.
Winterhoff noted ongoing efforts with Panasonic to source more battery materials domestically. However, Lucid will not utilize batteries from Panasonic's new Kansas facility in its vehicles until next year. Despite these efforts, Lucid's stock has fallen nearly 25% this year.
