Lucid Group Inc (LCID)
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Lucid Group Inc.
Lucid Group Inc. is an electric vehicle manufacturer based in Newark, California. The company is also involved in the development of battery technology used in Formula E cars. LCID stock price is of interest to many traders, similar to INTC ticker and other large companies.
The company was founded in 2007 by Peter Rawlinson, a former Tesla engineer who played a key role in the design of the Model S car. In 2013, Rawlinson left Tesla to focus on his own manufacturing company.
In 2018, Saudi Arabia’s Public Investment Fund invested $1 billion in Lucid Motors, acquiring a 62 percent stake in the company. The investment was used to develop Lucid’s first car model, the Air Sedan. In May 2020, Lucid Motors announced the completion of its factory, and production of the Lucid Air began in 2021.
The company went public in July 2021 through a merger with SPAC company Churchill Capital Corp IV, bypassing the traditional IPO process. The newly formed company was named Lucid Group, and its shares are listed on the NASDAQ exchange under the ticker symbol LCID. The listing raised approximately $4.5 billion for the company, despite the fact that it hadn’t released a single car at the time. By 2022, Lucid Group had a market capitalization of over $37 billion. Following the IPO, the company received 11,000 orders for the Lucid Air.
It’s important to note that Lucid Group does not pay dividends, choosing instead to use its capital to develop the company. The LCID share price is relatively low but volatile, making traditional investments potentially risky. Trading Contracts for Difference (CFDs) on the stock may be more profitable as traders can take advantage of price fluctuations and profit from the price differences.
LCID stock price: Outlook
The first factory currently has an annual production capacity of 34,000 electric vehicles (EVs). As of the Q3 report, the company had received pre-orders for 17,000 EVs, representing $1.3 billion in revenue. Management expects to deliver 22,000 units by the end of 2022.
Lucid has launched a second phase of expansion to increase its capacity to 90,000 EVs by the end of 2023. Two years later, the company plans to enter the Chinese market.
This expansion is necessary to accommodate the production of Lucid’s next model, the Gravity luxury SUV. The company aims to launch the Model 3 competitor in 2024-2025. To support long-term operations and production expansion, Lucid has a solid reserve of $4.8 billion on its balance sheet. In addition, Lucid and the Saudi Arabian sovereign fund are discussing the potential construction of another factory in Jeddah.
Management expects to deliver 250,000 EVs in a single year and generate $23 billion in revenue by the end of 2026. Double-digit annual growth is expected for at least five years. Analysts expect the company to reach profitability by 2024-2025. In the long-term forecast, analysts estimate that revenues will reach $76 billion by 2032.
LCID ticker: Worth Buying
While Lucid may be considered a competitor to Tesla, its current competition is primarily with models such as Mercedes, BMW and Audi rather than the full Tesla lineup.
The main risks for Lucid Group include intense industry competition and the ability to sustain growth. The company’s development model has similarities to Tesla’s early entry into the market. Critics argue that Lucid may be late to the game and may face scalability challenges. As the industry experiences significant growth, this could hinder Lucid’s market share expansion in the future.
However, the current strategy is probably the best approach for Lucid. As a relatively unknown brand, it would have been very risky to build a large amount of capacity right away. The key was to gauge demand first, and the company has exceeded expectations.
Bottom Line on NYSE: LCID
In order to anticipate stock price movements, traders should pay close attention to internal company events. Since Lucid Group has been on the market since 2021, every development attracts the attention of investors. In February 2022, the company issued a recall of over 1,000 vehicles due to a potential wiring defect, followed by another recall of 200 vehicles in the same year. Such incidents have a negative impact on the company’s reputation and investor confidence, leading to a 5% drop in share prices.