Read the memo: Tesla rival Lucid cuts 12% of its US workforce as EV winter takes hold

Lucid launched its latest EV, the Gravity SUV, last year. Josh Lefkowitz/Getty Images 2026-02-20T16:27:55.952Z Share Copy link Email Facebook WhatsApp X LinkedIn Bluesky Threads lighning bolt icon An icon in the shape of a lightning bolt.

Impact Link Save Saved Read in app This story is available exclusively to Business Insider subscribers. Become an Insider and start reading now. Have an account? Log in. EV startup Lucid Motors is cutting 12% of its US employees as demand for electric vehicles plummets. CEO Marc Winterhoff told staff on Friday that the cuts were necessary as Lucid tries to become profitable. The US is facing an EV winter as sales fall and manufacturers pull back their electric vehicle plans. Tesla rival Lucid is slashing its workforce as the EV winter tightens its grip. EV startup Lucid is cutting 12% of US employees, according to an email interim CEO Marc Winterhoff sent to unaffected employees on Friday, which Business Insider has seen.Winterhoff said the cuts would exclude hourly production employees in manufacturing, logistics, and quality. "This difficult but necessary decision was made to improve organisational effectiveness and optimize our resources as we continue on our path toward profitability," he wrote.It comes as Lucid faces a difficult environment for EV makers amid an industry-wide downturn, with EV sales plummeting industry-wide in the US following the end of the $7,500 tax credit in September. Every time Tom publishes a story, you’ll get an alert straight to your inbox! Stay connected to Tom and get more of their work as it publishes. Sign up By clicking “Sign up”, you agree to receive emails from Business Insider. In addition, you accept Insider's Terms of Service and Privacy Policy. Despite slowing demand for electric vehicles in the US, Lucid's sales more than doubled last year, as it scaled up production of its new Gravity SUV.However, the EV startup continues to burn cash as it struggles to become profitable. In its most recent earnings in November, the company reported a net loss of nearly $1 billion. Lucid reports Q4 earnings next week. Techcrunch first reported the layoffs.A Lucid spokesperson told Business Insider the cuts would not impact the company's hourly production workforce in Arizona, adding that the cuts were designed to "streamline" the organisation as it seeks long-term growth and margin improvement. "We are grateful for the contributions of all impacted employees and are providing resources, benefits, and support to assist them through this transition," they said.Read Lucid CEO Marc Winterhoff's full memo: Team;Today I want to share an important business update. We have implemented a 12% reduction of our U.S. workforce, excluding hourly production employees in manufacturing, logistics, and quality. This difficult but necessary decision was made to improve operational effectiveness and optimize our resources as we continue on our path toward profitability. If you are receiving this message, your role is not impacted. We are streamlining our organization so we can operate with greater efficiency and deliver on our commitments to gross margin improvement and long-term growth. We will continue to evaluate our day-to-day work to ensure that our time, energy, and resources remain focused on the initiatives that drive the greatest impact. This disciplined approach to execution is a core operational imperative for Lucid.Importantly, today's actions do not affect our strategy. Our core priorities remain unchanged, and we continue to focus on the start of production of our Midsize platform. With disciplined execution, we are also focused on further expansion into the robotaxi market, continued ADAS and software development, and growth in sales of Lucid Gravity and Air across existing and new geographies. Saying goodbye to colleagues is never easy. We are grateful for the contributions of those impacted by today's actions, and we are providing severance, bonus, continued health benefits, and transition support to help them through this period. As we move through today, I ask everyone to treat one another with empathy, professionalism, and respect, recognizing the personal impact these changes have on our teammates.To sustain and build on progress made in 2025, we must remain focused, operate with discipline, and execute with urgency. I know we are asking a great deal of our team, and I sincerely appreciate your continued commitment, resilience, and professionalism. I will address today's actions and answer questions during Monday's Town Hall. As always, you may presubmit your questions on The Hub.Warm regards, Marc