The worldwide electrical car or EV market is increasing quickly as a result of worldwide shift in the direction of clear vitality options. Much like different high-growth sectors, the EV phase can also be attracting a number of gamers. Whereas Tesla stays the undisputed chief on this vertical, a number of different corporations together with Lucid Motors (NASDAQ: LCID) are rightfully on the purchasing record of long-term traders.
A take a look at Lucid Motors’ financials
Lucid Motors started deliveries in Q3 of 2021 and confirmed order bookings stood at 13,000 automobiles on the finish of the quarter, reflecting an order e book of $1.3 billion. Furthermore, its reservations elevated to over 17,000 by November 15.
The corporate ended Q3 with $4.8 billion in money, thereby strengthening its steadiness sheet and offering it with sufficient sources to broaden manufacturing capabilities. Final December, Lucid additionally raised $1.75 billion through a convertible observe providing, growing its whole money steadiness to $6.5 billion.
Lucid Motors’s car manufacturing began at its superior manufacturing plant in Q3. On the identical time, the second part of building that started within the September quarter will add one other 2.85 million sq. toes of producing area.
It will enable the corporate to broaden its retail and repair networks and achieve traction in worldwide markets like Canada, Europe, the Center East, and Asia. It at present has a footprint in 13 areas within the U.S., driving near-term income for Lucid Motors.
What I like about Lucid Motors
Lucid Motors instantly owns and operates its retail studio and repair facilities to offer a extremely partaking expertise to prospects. Lucid Motors already has the longest-ever driving vary for a battery-powered car because the Dream Version R can cowl 520 miles on a single cost.
Pushed by strong buyer demand, the corporate now expects to ship 20,000 electrical sedans in 2022. Analysts monitoring the inventory anticipate Lucid Motors to put up income of $2.01 billion this yr, whereas gross sales would possibly surpass $4 billion in 2023.
Dangers to Lucid Motors share value
Whereas Lucid Motors is poised to profit from a number of secular tailwinds going ahead, it stays a high-risk guess, much like different development shares. LCID inventory is valued at a market cap of $43.77 billion valuing it at a ahead value to 2022 gross sales a number of of extra nearly 22x, which is extraordinarily steep.
The continued broader sell-off has already dragged LCID inventory 54% from all-time highs. The inventory can proceed to slip additional if the markets stay risky this yr. Moreover, vehicle manufacturing is extremely capital intensive which suggests Lucid Motors will proceed to burn money earlier than producing sustainable earnings. Lastly, the specter of rate of interest hikes will improve the prices of securing debt, whereas elevating fairness will dilute shareholder wealth.
Actually, Lucid Motors’ free money circulation stood at a destructive $1 billion in Q3, and this burn price will improve within the subsequent few quarters because it focuses on a brisk growth technique.
Lucid Motors’ development potential
Lucid has a number of issues going for it, together with an EV market forecast to the touch $824 billion by 2030, up from $163 billion in 2020. It has an excellent leadership team and a widening product portfolio. The corporate is well-cushioned when it comes to money and will outpace the broader markets within the upcoming decade.