Electric Vehicle Price Wars in China, Regulators Warn BYD, Others to Keep Prices Above Costs

Officials told EV makers to “self-regulate,” and that they need to address the following issues:

1. Selling cars below costs or making unreasonable prices cuts

2. Stop the practice of “zero-mileage” cars - registering cars to the manufacturer or dealer, but not a private owner so they appear as sales - the auto industry version of channel stuffing

3. Address supply chain financing excesses - where OEM manufacturers are using suppliers as quasi-debt issuers. In the case of BYD, their supply chain debt was 10 times higher than their net debt disclosed in financial statements in 2024

Running Effective Management Enterprise Risk Committee Meetings

Management-Level enterprise risk committees, often called Executive Risk Committees (ERCs) are a critical part of effective risk oversight framework, providing a cross-functional venue to better understand and manage key risks, improve management's focus on key risk mitigation activities and oversee risk reporting to the Board of Directors. Many companies establish an ERC but struggle to effectively conduct committee meetings and maintain effectiveness over time. The following suggestions may improve the results and sustainability of an ERC.

ERC Charter

Adopting a risk committee charter is a critical first step.  The charter should reflect the company’s operating model, business structure, and industry practices. The charter should articulate the organization’s overall risk strategy and help connect the enterprise risk process to corporate governance, strategic planning, budgeting and business management. The ERC structure, authority, approach, roles and meeting frequency should also be documented.

ERC Structure

Many risk issues require detailed discussion, analysis and coordination that may not require the time and oversight of the “C-Suite”. Therefore, many companies may benefit from a two-tier structure for their risk committee.  In the two-tier structure, a working team or a separate committee (Operational Risk Committee, Risk Council, etc.) may be established that operates under the oversight of the ERC. In this case, the ERC would be limited to a small group, typically less than 10 of the most senior executives in the company. The Operational Risk Committee would be a larger group of risk owners, geographic, business unit and cross functional leaders and would be tasked with providing the initial analysis, review, and approval of risk material before it is received by the ERC.

ERC Authority and Approach

The ERC’s authority and approach should be tied to the company’s overall organizational design and management approach, taking into consideration decision-making processes, and the organizational structure of business units, functions, and geographies.  Risk reporting processes may be structured to be informative in nature by reviewing risk mitigation status, or more decision-making oriented, where incidents are escalated, and resources are reallocated as needed. The authority and activities of the Operational Risk Committee should be aligned with the ERC authority and approach.

ERC Roles and Responsibilities

• Facilitate Cross-Functional Dialogue: Diverse committee members from representative departments, functions, geographies, etc. enable conversations with a deeper understanding of the cross-functional issues and therefore enterprise risks.

• Identify New and Emerging Risks: The ERC should help the organization stay ahead of potential issues by monitoring trends and changes in its external business environment and internal operations to spot new and emerging risks and respond accordingly.

• Assess Risks: Risk owners are responsible for the ongoing identification of risk trends, issues and challenges in their area of risk ownership. They should monitor both internal and external sources to have better visibility into risk trends they are facing.  Risk owners should have responsibility for escalating risk incidents and issues to the risk committee and leadership. The ERC should review those assessments as well as the overall enterprise risk assessment.

• Risk Updates: Evaluating the status of key risks and effectiveness of risk responses via risk update discussions is a key function of enterprise risk committees and critical to the continual improvement in managing specific risks and the organization’s risk management practices and capabilities. ERC members should be ready to ask risk owners questions and promote discussion.

• Approve Risk Mitigation Strategies: Risk owners should review key elements of the risk mitigation strategy with the ERC and report on mitigation plans periodically. In many cases the risk mitigation plans will include efforts in other functions or parts of the company outside the direct responsibility of the risk owner.  The risk owner plays a key role in ensuring that cross-functional or geographic processes and activities are coordinated and budgeted to reflect the risk appetite or mitigation plans approved by the ERC and company leadership.

• Key Risk Trends and Metrics: Risk owners should report risk trends, key risk indicators, and metrics to the ERC on a regular basis. The enterprise risk lead is often responsible for working with risk owners to collect risk updates and creating the report for the ERC. The enterprise risk lead may conduct further analysis on overall company enterprise risk status and success in managing key risks.

• Tone at the Top: Senior leadership is responsible for the overall effectiveness of the ERC and active participation in meetings is critical to effective risk management and oversight. Furthermore, the overall company culture is directly impacted by how senior leaders respond to risk issues presented during ERC meetings. Leaders can establish a culture where issues are openly discussed and addressed without assigning blame. Alternatively, the company culture can be negatively affected when risk owners are punished when they present a clear picture of the risks and risk mitigation issues.

Improvement Ideas

• Strengthen Risk Committee Meeting Execution: Meeting material should be distributed in advance, and time should be allocated during the meeting to read material to make sure everyone has a common background. Each ERC meeting should have an agenda; action items should be documented and communicated to risk owners and teams. Progress on previous action items should be reviewed, and risk mitigation obstacles should be addressed.

• Risk Updates: Effective ERCs require someone in the organization to coordinate the ERC meetings, obtain updates from risk owners, create materials and document ERC decisions and follow-up items.  This role is often led by the enterprise risk management team, or internal audit, acting within their designated role in the ERC charter. The enterprise risk lead should work to obtain updates from risk owners in a timely manner, allowing time for follow-up with risk owners if their submissions need clarification or lack quality consistent with other risk owners. Once the risk updates are compiled, analysis should be conducted to identify root causes, overarching trends or issues and other enterprise risk insights. Overall analysis all of the risks updates should be discussed with the ERC.

• Risk Owners: At times, others such as the enterprise risk management leader, head of Internal Audit or senior leadership may want to drive the conversation about specific risks. However, when risk owners lead the discussion regarding their risks, it encourages accountability and keeps all members of the committee actively involved.

• Resource Allocation: When risk owners articulate the need for additional support, collaboration or resources, senior leadership support is critical, even if details need to be worked out after the meeting. If the resources are not available to further mitigate a risk, the ERC may decide to accept the current risk levels, even though they would prefer to further reduce the risk. These decisions should be communicated to the Board as part of the risk oversight process.

See our Enterprise Risk Committee services page for more information or contact us to schedule a conversation.

Cadillac expects one of every three vehicle sales to be EVs in 2025

• Cadillac expects between 30% and 35% of its U.S. sales this year to be EVs, as the automaker continues to expand its lineup despite industrywide slower-than-expected adoption.

• The General Motors luxury brand is expected to offer five EVs by the end of this year, including its recently launched Escalade IQ and Optiq entry-level crossover.

• Cadillac’s U.S. sales last year increased 8.8%, led by more than tripling sales of the Lyriq, which first went on sale in late 2022.

Lucid Motors Q4 2024 Earnings Release: Analyst Reactions

On February 25, 2025, Lucid Motors (NASDAQ: LCID), the California-based electric vehicle (EV) manufacturer, unveiled its Q4 2024 earnings results after the market closed, sparking a flurry of reactions from equity analysts, news outlets, and investors alike. The report, covering the final quarter of 2024 (October to December), showcased a mix of impressive beats on key financial and operational metrics, a bold production forecast for 2025, and a surprising leadership transition. As of today, February 26, 2025, the discourse surrounding Lucid’s performance continues to evolve, with analysts and media sources dissecting the numbers, the strategic shifts, and the company’s trajectory in a competitive EV landscape. This article compiles and analyzes the reactions from equity analysts and news sources published on February 25 and 26, 2025, offering a comprehensive overview of how Lucid’s latest earnings are being interpreted.

Leadership Transition: A Curveball

A major surprise in the earnings release was the announcement that CEO and CTO Peter Rawlinson would step down, transitioning to a strategic technical advisor role, with COO Marc Winterhoff appointed as Interim CEO. Reuters reported on February 25 that this shift, combined with the strong earnings, sent shares up 10% in after-hours trading. PR Newswire’s February 25 statement framed Rawlinson’s departure as a planned move, with the former CEO focusing on long-term innovation.

Analyst reactions varied widely. The Motley Fool’s February 25 transcript captured a sense of uncertainty, with commentators noting that Rawlinson’s technical vision had been central to Lucid’s identity. “The numbers Lucid reports Tuesday and management’s outlook for 2025 will be the key drivers of its stock price,” they wrote, suggesting the leadership change amplified the stakes. Investing.com, on February 25, quoted an analyst suggesting Winterhoff’s operational expertise could sharpen execution, but others worried about losing Rawlinson’s strategic clout.

News outlets like Yahoo Finance, on February 26, took a balanced view, acknowledging Rawlinson’s legacy in building the Lucid Air and Gravity while highlighting Winterhoff’s potential to steer the company through its growth phase. “Navigating leadership transitions and production challenges” remained a focal point, with analysts eager to see how the interim CEO addresses tariffs, supply chains, and market competition in upcoming quarters.

Financial Performance: Beats and Optimism

Lucid Motors reported Q4 2024 revenue of $234.5 million, surpassing the consensus estimate of $214.22 million, as noted by Benzinga on February 25. This marked a robust 49% year-over-year increase from $157.15 million in Q4 2023, reflecting significant growth in sales driven by record vehicle deliveries. The company posted a non-GAAP loss per share of $0.22, beating analyst expectations of a $0.25 loss, according to posts on X and multiple news sources like Zacks.com. On a GAAP basis, the net loss per share was also $0.22, an improvement from the broader annual loss of $1.25 per share for 2024.

Analysts were quick to highlight these beats as a sign of operational resilience. Writing for Yahoo Finance on February 26, the commentary emphasized Lucid’s “record vehicle deliveries and improved gross margins” as key takeaways, suggesting that the company was gaining traction despite ongoing losses. Zacks.com, in a February 25 report, underscored the positive surprises, noting a 15.38% beat on earnings per share and a 4% outperformance on revenue forecasts. “Do the numbers hold clues to what lies ahead for the stock?” Zacks posed, hinting at cautious optimism among analysts about Lucid’s near-term prospects.

Equity analysts from Stifel, as quoted in Investing.com’s earnings call transcript on February 25, expressed satisfaction with the revenue growth, tying it to the company’s ability to ramp up production and deliveries. Steven Gengaro of Stifel asked during the earnings call about the impact of the Lucid Gravity SUV mix on 2025 gross margins, to which Interim CFO Gagan Dhingra responded with confidence, projecting “significant improvement” in margins throughout the year, akin to the trend seen in 2024. This suggests analysts see the Gravity—an electric SUV launched in late 2024—as a pivotal driver of Lucid’s financial health moving forward.

However, not all reactions were unequivocally positive. The Motley Fool, in a February 25 earnings call transcript, pointed out that while revenue and delivery numbers impressed, the company’s adjusted EBITDA remained deeply negative at approximately -$577 million for Q4. This persistent cash burn tempered some analyst enthusiasm, with questions lingering about Lucid’s path to profitability.

Operational Milestones: Production and Deliveries Surge

Lucid produced 3,386 vehicles in Q4 2024, exceeding analyst estimates of 2,904, and delivered 3,099, surpassing the expected 2,637, according to X posts from @SatoruLzu on February 25. For the full year, the company hit its production target of 9,029 vehicles and delivered 10,241—a 71% increase from 2023’s 6,001 deliveries. News sources like Reuters and Electrek, both publishing on February 25, framed this as a significant achievement, with Reuters noting a 10% stock surge in extended trading following the announcement.

Analysts lauded Lucid’s operational execution. TipRanks.com, in a February 25 breakdown, praised the alignment with annual production guidance, calling it a “key financial highlight” that bolstered confidence in Lucid’s manufacturing capabilities. Electrek echoed this sentiment, emphasizing that Q4’s 3,099 deliveries—up nearly 80% from Q4 2023—demonstrated “big expectations for 2025” as the Gravity SUV begins to scale. The company’s ability to exceed delivery forecasts was seen as a rebuttal to skeptics who had questioned its production scalability.

Yet, some analysts remained cautious. The Fool’s February 25 transcript highlighted a question from an attendee about capacity constraints for 2026, to which Lucid’s leadership declined to provide specifics, citing variability in demand and shift adjustments to be determined in 2025. This ambiguity left room for speculation, with analysts wondering if Lucid’s ambitious targets could strain its infrastructure.

2025 Outlook: A Bold Bet on 20,000 Vehicles

Perhaps the most headline-grabbing element of the earnings release was Lucid’s 2025 production guidance of approximately 20,000 vehicles—more than double its 2024 output. PR Newswire’s official release on February 25 quoted Interim CFO Gagan Dhingra saying, “We saw significant momentum in 2024 with four consecutive quarters of record deliveries,” framing the 20,000-unit target as a natural extension of this growth. Reuters, on February 25, tied this forecast to the Gravity SUV’s rollout, predicting continued market traction.

Equity analysts reacted with a mix of excitement and scrutiny. Cantor Fitzgerald’s Andrea Sheppard, cited in Investing.com’s February 25 transcript, probed the impact of average selling prices (ASPs) and the Gravity mix on 2025 margins, suggesting that pricing dynamics would be critical to achieving profitability. Dhingra’s response—that margins would improve significantly in the second half of 2025 as Gravity production scales—reassured some, but left others wanting more granularity.

Nasdaq.com’s February 25 preview had pegged 2025 revenue estimates at $1.34 billion, implying a 67.4% year-over-year jump, and the new production guidance aligns with this bullish outlook. However, analysts like those at Investing.com cautioned that the $883.8 million in 2024 capital expenditures and a cash position of $6.13 billion in total liquidity might not suffice if demand falters or costs escalate. “The company will need to balance growth investments with financial discipline,” wrote Investing.com on February 25, reflecting a common thread of tempered optimism.

News sources like Benzinga, on February 25, viewed the 20,000-unit target as a “signal of continued growth,” especially with the CEO transition adding a layer of intrigue. However, Electrek contrasted Lucid’s upbeat guidance with Rivian’s more conservative outlook from the prior week, noting that Lucid’s bet on doubling production could either solidify its position or expose vulnerabilities in a softening EV market.

Market Sentiment and Stock Movement

Lucid’s stock surged post-earnings, with Investing.com reporting a 10% jump on February 25, corroborated by X posts from @AIStockSavvy noting a 5% after-hours gain. This rally contrasted with a 10% plunge earlier in the week, as reported by The Motley Fool on February 24, driven by bearish analyst outlooks on cash burn. The earnings beat and 2025 guidance shifted sentiment, though analysts remained divided on sustainability. Equity analysts from Stifel and Cantor Fitzgerald, as cited in transcripts, leaned cautiously bullish, focusing on delivery momentum and margin potential. However, the negative EBITDA and ongoing losses kept some, like those at Zacks, from fully endorsing the rally. “The stock’s direction hinges on execution,” Zacks wrote on February 25, encapsulating the broader analyst consensus.

Broader Context: EV Market Dynamics

News sources contextualized Lucid’s results within the EV sector’s 2025 outlook. Reuters, on February 25, noted a sluggish 2024 for EVs but cited Benchmark’s prediction of a rebound driven by cheaper vehicles and better infrastructure—tailwinds that could benefit Lucid. Electrek’s February 25 piece contrasted Lucid with Tesla and Rivian, suggesting that while Tesla’s market value dipped below $1 trillion due to slumping European sales, Lucid’s niche luxury focus might carve out a distinct path.

GM Signs Multibillion-Dollar Deal for Supply of EV Battery Materials

“GM signed a multibillion-dollar deal with Norway’s Vianode for the delivery of a material critical for electric-vehicle batteries, the companies said Wednesday.Vianode will supply synthetic anode graphite that will be used in next-generation EV batteries produced by Ultium Cells, GM’s battery joint venture with LG Energy Solution. The Norwegian company will build production facilities in North America and be ready to start shipping the material from 2027, with the deal running through 2033. The companies didn’t provide further financial details.”

European Union votes to impose tariffs on Chinese electric vehicles

• The European Union on Friday voted to adopt definitive tariffs on China-made battery electric vehicles (BEVs).

• “Today, the European Commission’s proposal to impose definitive countervailing duties on imports of battery electric vehicles (BEVs) from China has obtained the necessary support from EU Member States for the adoption of tariffs,” the EU said in a statement.

• The EU added that it was still working in China to look for “an alternative solution” even as the tariffs are adopted.

Tesla Plans Four New Batteries

Tesla plans to design four new versions of its in-house battery to power the Cybertruck, its forthcoming robotaxi and other electric vehicles, the Information reported on Thursday, citing people with knowledge of its plans.

The Elon Musk-led firm currently sources most of its EV batteries from other companies, including Panasonic Energy and LG Energy but has been trying to ramp up production of its 4680 battery cells in the United States to lower costs and boost margins.