BENGALURU: Lucid Group beat market expectations for third-quarter deliveries on Monday, as discounts and cheaper financing options for its luxury electric vehicles boosted demand in an uncertain economy.

Shares of the company rose around 1.5 percent.

The company, majority owned by the Saudi Public Investment Fund, handed over 2,781 vehicles in the quarter ended Sept. 30, compared with estimates of 2,242 according to 8 analysts polled by Visible Alpha.

Consumer appetite for electric vehicles in the US has been weakening due to high interest rates and the availability of cheaper hybrid alternatives.

EV firms such as Tesla, Rivian and Lucid have slashed prices and have been offering incentives like cheaper financing options to woo customers.

Lucid reported a sequential drop in production, manufacturing 1,805 vehicles in the third quarter, compared with 2,110 vehicles in the previous three months.

Andres Sheppard, senior equity analyst at Cantor Fitzgerald, attributes the lower production number to the company clearing its existing inventory.

Lucid is also betting on its Gravity SUV, which is expected to go into production later this year, to drive growth but will compete with Tesla’s Model X and Rivian’s flagship R1 models.

Sheppard added that he expects Lucid’s cost margins to compress once they begin ramping up the production of Gravity.

“We think Lucid will have its work cut out in Q4 to hit its 2024 production guidance of 9,000 units,” said Garrett Nelson, senior equity analyst at CFRA Research.

Rivian cut its annual production forecast last week and missed estimates for quarterly deliveries, as weak demand was further compounded by a parts shortage, while market giant Tesla also reported disappointing delivery data.

The company said in August it received up to $1.5 billion in cash from PIF, as it looks to ramp up production and introduce a mid-size car expected to roll out in late 2026.