By Abhirup Roy and Peter Henderson
LOS ANGELES (Reuters) - Lucid, known for its flagship Air luxury electric sedan, unveiled the much-awaited Gravity sport utility vehicle on Thursday, driving the startup into a lucrative section of the U.S. auto industry amid growing caution over slowing EV demand.
Starting at under $80,000 and with the top trim offering more than 440 miles in range, the Gravity sits right next to rival Rivian's flagship R1S SUV and is expected to go into production late next year.
Though the 5.3-meter-long, three-row Gravity will come with a battery pack similar to the Air, the vehicle has been designed on a new platform from the ground up, Lucid's Chief Executive Officer Peter Rawlinson told Reuters at a preview this month.
"The Gravity will significantly expand our market opportunity, and open up a total addressable market that is nearly 3X larger and growing," Rawlinson told analysts on a post-earnings conference call last week.
Accounting for a chunk of U.S. vehicle sales, SUVs form a growing market with customers choosing them for safety, comfort, space and power during long drives and off-road trips.
Success of the Gravity, which was unveiled in Los Angeles ahead of the auto show opening on Friday, will be crucial for Lucid. Fear of a slowdown in EV demand from inflation and high interest rates is spreading across the industry.
To stoke demand, EV makers have joined a price war sparked this year by market leader Tesla (NASDAQ:TSLA). Many, including Tesla, Ford and General Motors (NYSE:GM), have pushed back planned EV and battery factory expansion or additions.
Lucid, which cut prices of the Air sedan as part of special offers to counter high financing costs, cut its 2023 production target last week to "better align with deliveries" and has been focusing on marketing to boost awareness.
That will be key for the full-size luxury Gravity SUV, which features a steering wheel that is more square than round and a 34-inch curved cockpit display.
As Lucid ramps up production, it will gain from economies of scale as the Gravity and the Air will be made on the same production line, the company said.
Controlling cost is important for Lucid given its high cash burn. The company ended the third quarter with $5.45 billion in cash, which it has said is enough to start producing Gravity and into 2025.