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Lucid Group, the luxury electric vehicle maker once seen as a Tesla challenger, is making deep cuts to stay afloat, announcing Monday that it is eliminating approximately 18% of its U.S. workforce as part of an aggressive cost-saving overhaul.

The move is expected to generate annualized savings of about $158 million. As part of the shakeup, Chief Operating Officer Marc Winterhoff is departing immediately — the role itself has been eliminated. Winterhoff had served as interim CEO until Silvio Napoli took over on June 1.

The reductions affect full-time employees, contractors, and hourly production workers, including at its Arizona manufacturing facility where the second shift is being cut. Lucid had roughly 9,000 global employees at the end of last year.

This latest round of belt-tightening comes as Lucid struggles with slowing EV adoption, changing regulations under the Trump administration (including the elimination of the $7,500 federal EV tax credit), and persistent financial challenges. The company lost $2.7 billion on $1.35 billion in revenue last year, with negative free cash flow swelling to $3.8 billion.

Lucid is not alone — the broader EV sector is facing headwinds as consumer demand cools and competition intensifies. The company is now focused on reducing elevated inventory and simplifying operations, but these painful cuts highlight the harsh reality for even well-funded EV startups trying to scale in a tougher market.

While Lucid still aims for cash-flow positivity later this decade, Monday’s announcement signals a more cautious and survival-oriented phase. For investors and EV enthusiasts, it raises fresh questions about how quickly the industry can stabilize — and whether Lucid can carve out a sustainable path forward without further drastic measures.