By Hyunjoo Jin

CASA GRANDE, Ariz. (Reuters) – Lucid Group Inc said on Tuesday it will start delivering its luxury electric sedans with a Tesla-beating driving range in late October, in a major challenge to the market leader whose sales of premium models have stagnated.

California’s startup Lucid Group Inc began the production of long delayed Lucid Air vehicles at its Arizona facility on Tuesday. In 2007, the company was founded. It received funding in 2018 from Saudi Arabia’s Public Investment Fund. The company went public in July via a shell corporation.

Peter Rawlinson is the Lucid Group CEO. Rawlinson had previously managed Tesla (NASDAQ)’s Model S Development before leaving in 2012. He now faces similar challenges to Tesla, such as how to solve manufacturing issues and scale up production.

Sam Abuelsamid (principal analyst at Guidehouse Insights) said, “I think Lucid’s biggest challenge will be execution.” They have an excellent car, I believe. It’s very attractive,”

Lucid said on Tuesday it has received more than 13,000 reservations for Lucid Air models, whose price starts at $77,400. Lucid also stated that it plans to increase the production total of its top-end Lucid Air Dream Edition model to 520 units. It will become available late October and be priced at $169,000.

The official rating for the Dream Edition is 520 mile (837km) and delivers more than 100 miles per gallon over Tesla’s Model S. It costs $89990.

“The proprietary EV technology that Lucid has developed will make it possible to travel more miles using less battery energy,” said Rawlinson.

Lucid Air Grand Touring has a 516-mile range rating with a 112-kWh lithium-ion battery. The company hasn’t yet revealed the capacity, but Lucid Air Grand Touring has an industry-leading efficiency at 4.6 miles/kilowatt-hour.

Musk stated in June that Tesla had canceled plans to release a Model S Plaid+ with a target range of 520 miles. He said another version was “so much better.”

Tesla sold 1,890 Model S and Model X luxury cars in the first quarter, a decrease of 22,300 from the previous three-year period. Tesla has not provided figures for both high-end model.

Abuelsamid explained that “The Model S does not look fundamentally differently from the Model S nine years back.” Customers are always looking for the best and most innovative products in the premium market.

He said that Lucid could have an advantage because the Air is a luxurious car and feels premium.

Elon Musk, Tesla’s CEO, reduced the cost of the Model S in October 2020 after Lucid had announced its pricing. “The gauntlet was dropped!” “The prophecy is going to be fulfilled,” Musk tweeted.

Musk continued to stress this month, “Production is hard.”

Musk reiterated this month that “production is hard.” He cited the razor-thin margins of carmakers as a reason for not producing with positive cash flows.

Rivian (an electric vehicle company) was supported by Amazon.com Inc. and is now in preparation for a stock exchange listing. Rivian began producing electric pickup trucks earlier this month. The move is similar to those made by Ford Motor (NYSE ) Co, General Motors Co (NYSE ) Co and Tesla (NYSE ) Co. They are all preparing electric pickup trucks.