With competitors actually heating up within the electrical car (EV) trade, Lucid Group Inc. (NASDAQ: LCID) is trying to grow to be one of many huge names in sustainable motoring. Lucid started buying and selling publicly in July final yr, and since then it’s seen its inventory rise significantly. Up over 175% since its reverse SPAC merger, the corporate has continued to entice buyers as its inventory continues to surge.
Even a considerably regarding This fall earnings report couldn’t sluggish the inventory down as buyers, buoyed by the corporate’s announcement of elevated car reservations, purchased the inventory in droves. However simply how good of an funding is Lucid stock right now? Let’s take a more in-depth look.
Bull Case
The very first thing to notice about Lucid is that it has tapped into one of many largest progress industries of latest instances. EV purchases now account for 26% of latest gross sales within the world automotive market, and the numbers simply appear to maintain growing exponentially. As demand continues to develop, customers will look to disruptive corporations like Lucid to comply with within the footsteps of auto large Tesla and pave the best way for an all-electric future.
Lucid boasts a wealthy historical past in battery expertise, with the agency at present offering batteries for Formulation E – the world’s premier EV racing collection. There’s additionally a wealth of automotive expertise throughout the firm’s administration staff, with CEO and CTO Peter Rawlinson being of explicit be aware. Rawlinson has been within the trade for over 30 years and was the chief engineer behind Tesla’s Mannequin S. Having administration with this stage of expertise will definitely encourage confidence in any would-be investor.
Lucid additionally obtained a lift final November when its first manufacturing mannequin, the Lucid Air, was awarded MotorTrend’s coveted Automotive of the Yr award for 2022. This marks the primary time within the award’s historical past that an organization has received the title with its very first providing. The Air’s boasts enviable options, corresponding to its power effectivity, bode extraordinarily properly for future gross sales.
The corporate at present boasts roughly 20,000 reservations for its Air mannequin, up from 13,000 via the third quarter of 2021. This shopper confidence represents an order e-book price virtually $1.5 billion and will likely be music to the ears of any Lucid buyers. This fall will mark the primary quarter that the corporate will report income from precise automobile gross sales, so its subsequent earnings name will likely be one which buyers will little question be extremely anticipating.
Bear Case
Missing the sheer quantity of capital behind a few of its closest rivals, Lucid might very properly fall sufferer to the worldwide provide chain points which are wreaking havoc on corporations internationally. Whereas CEO Peter Rawlinson acknowledged his confidence in attaining the agency’s lofty goal of 20,000 vehicles produced in 2022, he added that “this goal will not be with out threat given ongoing challenges going through the automotive trade, with world disruptions to provide chains and logistics.” Traders will likely be watching intently as the corporate unveils steps to mitigate these points over the approaching months.
Coming into the profitable EV market additionally comes with its fair proportion of competitors. Rivian debuted on the general public markets this week and shortly rose to grow to be the third most precious automobile producer on the earth by market worth. Different startups corresponding to Fisker and NIO are sizzling on Lucid’s heels, in addition to extra established auto giants corresponding to Volkswagen and Ford. Oh, and did we overlook to say Tesla?
So ought to I purchase Lucid inventory?
Lucid has most of the underlying properties that we wish to search for in a inventory. It operates in a high-growth market, has wonderful management, and affords a product that proper now appears to guide the market (not less than in battery vary). Traders could be clever to pay shut consideration to the corporate’s This fall earnings name the place it’s set to lastly announce income from automobile gross sales. Reporting losses of $4.8 billion final yr, buyers will need proof that the corporate has the means to show a revenue earlier than going all in.
Quickfire Spherical
How a lot will a Lucid automobile value?
The bottom mannequin is $77,400, with the costliest “Dream” model setting you again $169,000
The place is the Lucid Motors manufacturing unit?
Casa Grande, Arizona.
Is Lucid Motors an American firm?
Sure, the corporate was based within the U.S. and has its headquarters in Newark, California.
