Lucid Group keeps its promises


Share price Lucid group (NASDAQ: LCID) rose 38% last week. Although some of the gains may be correlated with You’re here Surpassing $ 1,000 billion in market capitalization for the first time in its history, the biggest news for electric vehicle (EV) maker Lucid is that it is set to deliver the first wave of Lucid Air Dream Editions to customers this weekend.

Critics of the company will point out that its market capitalization of $ 44 billion is extremely overvalued given that it only produces and ships cars. While it is true that Lucid has high expectations even for a growth stock, the company deserves credit for achieving its goals on time. Here’s a look at where Lucid is now and what he needs to do to deliver on next year’s promises.

Image source: Lucid Group.

Stay true to his word

Lucid shows the importance of separating the price fluctuations of a stock from the performance of the company. While its stock price has been all over the place this year, hitting $ 64.86 per share and dropping as low as $ 9.60, the company itself has been the pinnacle of consistency.

Lucid spent much of the first half of the year fine-tuning its manufacturing process and building the quality of the Air Dream edition, increasing bookings, and opening showrooms and service centers. It has successfully expanded its manufacturing facility in Arizona to a capacity of 34,000 vehicles, which is more than enough to produce its goal of 20,000 Lucid Airs in 2022.

In May, he announced that the final tweaks on the Lucid Air were going well and that final quality assurance would take place the following month. In June, Lucid completed a pre-production run of 89 vehicles on time. It then merged with a Special Purpose Acquisition Company (SPAC) called Churchill Capital IV in July, bringing in $ 4.4 billion in cash after spending.

In mid-September, Lucid was crowned King of the Line after receiving official Environmental Protection Agency (EPA) ratings that exceeded his initial predictions. At the end of September, Lucid announced that it had started vehicle production at its Arizona plant, which was on schedule with its target to go into production in the second half of 2021. It also announced that reservations now exceeded 13,000, against only 9,000 in May. In mid-October, Lucid opened a store in Vancouver as part of its goal of opening 20 points of sale and service by the end of the year, as well as continuing to increase international bookings.

On October 24, Lucid Motors tweeted a photo of a car transporter trailer carrying six lucid Air sedans – a match that customer deliveries were starting. Later that week, on October 27, he made the news official, announcing that he would deliver the first Lucid Air Dream Edition vehicles to customers before the end of October.

In summary, Lucid did just about everything he said he was going to do this year on time, which is important for a young company trying to prove itself, let alone challenge directly. You’re here for the fame of the electric vehicle. It’s still early days, but the Lucid Air Dream Edition has so far lived up to the hype, both earning the EPA seal of approval for its specifications and receiving favorable reviews from publications such than MotorTrend, Car and driver, and Road & Track.

Look ahead

In its October 27 press release, Lucid announced plans to deliver 520 limited-edition Lucid Air Dream editions featuring a 118 kilowatt-hour battery, 1,111 horsepower and a range of 520 miles, followed by Lucid Air. Grand Tourings, the company’s second most expensive trim. In 2022, the company plans to mass-produce and deliver the Lucid Air Touring and Lucid Air Pure, two low-end models that are said to be more competitive with other luxury cars.

In addition to deliveries, Lucid will also host a Dream Delivery event in California on October 30, all covered on the company’s social media.

Over the next few months, Lucid should continue to ramp up its production rate, successfully manufacture and deliver low-end Lucid Air trims, and receive positive feedback that allows it to increase bookings without spending a lot on money. advertising. Similar to 2021, Lucid has made big promises for 2022. All eyes will be on the company’s ability to ramp up production, as well as move forward on the Lucid Gravity SUV, while striving to become profitable at middle term.

Stay ahead of the competition

Lucid’s decision to develop and manufacture its powertrain in-house and to safeguard its proprietary technology is a good long-term decision. With so many promising electric vehicle competitors, as well as historic automakers increasingly funding EV campaigns, Lucid’s technological advantage and design are the main factors driving its brand right now. . The company expects to have enough liquidity to last at least until 2022, but it will eventually have to turn positive in terms of cash flow or risk diluting its shares by selling additional shares to raise capital.

Despite what you think of Lucid the stock, there’s no denying that Lucid the company is pulling all cylinders and is well positioned to end the year on a high note. Long-term investors know that successful companies tend to share the common trait of good management. Company management is showing that they are capable of developing a car that is not just passable, but raises the bar, so other companies now have to catch up. If this is a story you can support, then there is reason to believe that there has never been a better time to buy Lucid stocks – especially now that they are delivering cars.

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Daniel Foelber owns shares of Lucid Group, Inc. and has the following options: short call options of $ 20 in December 2021 on Lucid Group, Inc., short sell of $ 22.50 in December 2021 on Lucid Group, Inc. ., $ 20 short call in February 2022 on Lucid Group, Inc., short January 2022 $ 17.50 put on Lucid Group, Inc., short January 2023 $ 17.50 calls on Lucid Group, Inc., short January 2024 $ 20 calls to Lucid Group, Inc., short November 2021 calls $ 22 to Lucid Group, Inc., $ 22 short sales in November 2021 to Lucid Group, Inc., and $ 23 short calls in November 2021 to Lucid Group , Inc. The Motley Fool owns stock and recommends Tesla. The Motley Fool has a disclosure policy.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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