Düsseldorf Peter Hochholdinger rescued Elon Musk from the “production hell”. The German was also supposed to do the same at Tesla competitor Lucid, where he set up electric car production at the new factory in Arizona.
That’s over now. Hochholdinger is leaving the US company, as the Handelsblatt learned from industry circles. With him, several high-ranking production experts separate from the company. So David Peel, director of “advanced production processes”, goes to the competitor and start-up Nikola, as can be seen from his LinkedIn page. Peele joined Lucid in 2020 under the direction of Hochholdinger.
According to the American edition of “Business Insider”, Lucid’s head of programming, Ralph Jakobs, is also said to have left the company, as well as other managers. The profile picture of Jakobs was removed from Lucid’s website a few weeks ago. He worked at Volkswagen for almost a quarter of a century and was most recently head of research at the VW and Audi joint venture in China.
The departures hit Lucid in a difficult phase. Starting up a vehicle production is complex and requires a lot of experience. The Californian company has already had to withdraw its production targets twice this year and is only building a maximum of 7,000 vehicles this year. The share price has fallen by far more than half since the beginning of the year.
There are no official statements about the departures and their reasons. People close to Hochholdinger do not see him as responsible for the production problems. Lucid had made mistakes in the logistics and procurement of battery cells. A few days ago, Chief Executive Peter Rawlinson spoke of “unplanned production interruptions” due to logistics problems.
Hochholdinger had great freedoms at Lucid for a long time. But recently Rawlinson put a new boss in front of him: Steven David, head of operations. The experienced car manager was previously responsible for production at Stellantis and Fiat Chrysler in various positions. David has his office in Arizona at the factory, as Rawlinson pointed out.
After a long career at Audi, Hochholdinger was head of production at Tesla from 2016, responsible for the rise to mass producer with the Model 3. Musk called the phase the “production hell”, a term that Hochholdinger classified as “exaggerated” in an interview with Handelsblatt 2021.
It was he who mastered the start-up of Model 3 production and helped Tesla on the road to success. At Lucid, he set up the plant in Arizona “at record speed,” as he said a year ago – faster than Tesla set up its factory in Grünheide.
Lucid pursues a similar strategy to Tesla
Lucid follows Tesla in its market strategy in many things. In addition to Hochholdinger, the company brought in managers from competitors such as development manager Eric Bach or supply chain manager Peter Hasenkamp. And similar to Tesla, it relies on producing many components itself and maintaining control over large parts of vehicle production.
This is in contrast to other start-ups such as Fisker, which outsource a lot to suppliers. Like Tesla, Lucid is also launching a very expensive vehicle on the market with the Roadster sports car, which is only available in a limited edition: the Air Dream Edition. New vehicles, which are mainly cheaper variants of the Lucid Air, should be launched on the market every quarter.
The majority investor in Lucid is Saudi Arabia. The kingdom also became a customer a few months ago, wants to buy 50,000 to 100,000 vehicles from the company in the next decade. Lucid also wants to build its second factory in the country, where 150,000 vehicles are to be produced annually.
Experts are critical of the investment. “A factory in Saudi Arabia is not the right location. No suppliers will settle there, everything has to be brought about,“ Stefan Bratzel, Director of the Center of Automotive Management, told Handelsblatt a few weeks ago. The Middle East is not a big market. “Without the Saudi Arabian Sovereign Wealth Fund as an investor, Lucid would not have built in the desert.“
In an interview with Handelsblatt a year ago, Hochholdinger compared the start-up of a production to a marathon: “You don’t run the first five kilometers like a madman,” said the Upper Bavarian. “You win the race in the last third, where the wheat separates from the chaff.“