Lucid Group Inc (LCID.O) 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. The California-based startup began production of its long-delayed Lucid Air cars at its Arizona factory on Tuesday. The company, founded in 2007, received funding from Saudi Arabia"s Public Investment Fund in 2018 before going public via a shell company in July. Lucid Group"s CEO, Peter Rawlinson, who had overseen Tesla"s Model S development before he left the company in 2012, faces tasks similar to those of Tesla in its early days, including how to address manufacturing challenges and scale up production. "I think the big challenge for Lucid will be execution," said Sam Abuelsamid, a principal analyst at Guidehouse Insights. "I think that they have a very good car. 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. It also said it has increased the planned total production of the top-end Lucid Air Dream Edition to 520 vehicles. That car is priced at $169,000 and will be available in late October, followed by less expensive models: Grand Touring, Touring and Air Pure. A version of the Dream Edition has received an official government rating of a 520-mile (837 km) range, delivering more than 100 miles of additional range over its closest rival, Tesla"s Model S, which is priced at $89,990. “The proprietary EV technology that Lucid has developed will make it possible to travel more miles using less battery energy," said Rawlinson. Lucid has not yet disclosed the battery capacity of the top-end version of Lucid Air, but it said its Lucid Air Grand Touring version has an official EPA rating of 516 miles of range with a 112-kWh battery pack, giving it an industry-leading efficiency of 4.6 miles per kilowatt-hour. Musk said in June that Tesla has canceled its plan to launch a Model S Plaid+, with a target driving range of 520 miles, saying another version is "so good." Tesla"s combined sales of Model S and Model X luxury models stood at only 1,890 in the second quarter of this year, down from 22,300 during the same period three years ago. Tesla does not break out figures for the two high-end models. "The Model S doesn"t look fundamentally different from a Model S nine years ago," Abuelsamid said. "In the premium market, customers are looking for the latest and greatest." "What Lucid is going to potentially have an advantage is the Air feels like a luxury car, feels a lot more premium," he said. Tesla CEO Elon Musk in October 2020 cut the price of its Model S, shortly after Lucid announced the pricing of its base model. "The gauntlet has been thrown down! The prophecy will be fulfilled," he tweeted at that time. Musk reiterated this month that "production is hard." "Production with positive cash flow is extremely hard," he said, citing carmakers" razor-thin margins. Electric vehicle maker Rivian, backed by Amazon.com Inc (AMZN.O) and now preparing for a public stock listing, earlier this month started production of electric pickup trucks. That move came ahead of similar expected moves by Tesla, General Motors Co (GM.N) and Ford Motor Co (F.N), which are all preparing to launch electric pickup trucks. Reporting by Hyunjoo Jin in Casa Grande, Ariz. Editing by Matthew Lewis Our Standards: The Thomson Reuters Trust Principles.