Is Lucid the next Tesla?

Lucid Motors, which is fairly new in the EV industry has recently seen a lot of achievements including better stock market performance. Analysts have also estimated that it might be the next ‘Tesla’, the biggest car-maker company today.

Tesla and Lucid

The Covid-19 pandemic induced economic downturn did not affect Tesla Inc. much. The company ‘shined’ during the pandemic when other automotive companies suffered significantly. It reported profits for the first quarter of FY20 despite the pandemic. It earned $104 million. CEO Elon Musk said the firm is focused on expansion and growth. “I’ve never been more excited and optimistic about the future of Tesla in the history of the company,” Musk added.

The pandemic had forced the company’s main factory in California to be shut down. However, it still managed to beat analysts’ expectations. Tesla produced 82,272 cars and delivered 90,650 to customers in the first quarter. However, the production went down about 5% from the same quarter in 2019. In addition, the decline hit revenue, which also slipped about 5% to $6 billion. In the second quarter it sold 139,593 cars which increased 54% from the previous quarter and 44% year-over-year.

The recent third quarter results of Tesla beat the analysts’ estimates. The EPS was $1.86 against $1.59 expected. The revenue was $13.76 billion against the estimate of $13.63 billion. In addition, its net income surpassed $1 billion for the second time- 1.62 billion. It had delivered 241,300 electric vehicles and produced 237,823 vehicles during the quarter ending September 30, 2021.

It is the largest car-maker company today, therefore, its sales and operation weren’t hampered much due to the pandemic. However, Lucid Motors on the other hand is a start up. Being a new entrant it still has a long way to go before it reports quarterly profits. The second quarterly results showed a revenue of $174,000, which is not even 10% of its rival’s.

However, the third quarterly results of LCID were a breather. They reported that the customer reservations rose to 13,000 in Q3, reflecting an order book of approximately $1.3B, and have since increased beyond 17,000. Also, the customer vehicle production started in Q3 at Lucid’s Advanced Manufacturing Plant (“AMP-1”) in Casa Grande, Arizona, and the second phase of construction broke ground to add 2.85 million square feet of space. It announced in the filings that its balance sheet to close Q3 with approximately $4.8B in cash.

LCID Recent Stock Growth

Lucid Motors IPO made its debut on July 26 when Churchill Capital Corp. IV took the luxury electric-vehicle leader public in a highly anticipated initial public offering. LCID is trading approximately 20% below its recent highs.

Its stock is labelled as buy. The company’s shares surged by more than 11% just before the market opened on Tuesday. Its market value blew past Ford when it exceeded the $89.9 billion mark after closing at $55.52 a share. However, it is much less than that of Tesla which is worth more than $1 trillion.

Earlier, after the delivery event’s official recap video was released, the company’s stocks skyrocketed. As the markets closed, LCID was trading at $41.80, up +4.68 points (12.61%) for the day. In the after-market hours, the company was trading at $41.95, up by +0.15 points (0.36%).

Car orders and Delivery

Lucid Air, delivered for the first time a few weeks back, is considered the first worthy rival for Tesla EVs. The Lucid Air Dream Edition was sold-out. The Lucid Air Pure edition is priced at $77,400 before incentives and offers 480 horsepower.  The Air Dream edition can also be reserved at $139,000 Grand Touring, and delivery can be expected in the early part of next year.

Analyst Rating for Stocks

InvestorsObserver gave Lucid Group Inc (LCID) an Analyst Rating Rank of 74. This means LCID is ranked higher by analysts than 74% of stocks. The average price target for LCID is $44 and analyst’s rate the stock as a ‘Strong Buy’.

As per the IBD Stock Checkup, Lucid Motors stock shows a modest score of 71 out of a perfect 99 IBD Composite Rating. The Composite Rating helps investors to easily measure a stock’s fundamental and technical metrics. Weak IBD Composite Ratings are normal for new entrants in the stock market. However, LCID stocks didn’t have a weak score. Thus, indicating that investors interested in investing in the EV industry should look forward to investing in it.

The Road Ahead

CEO Peter Rawlinson, mentioned Lucid Motors’ future plans in the press release for the third quarterly earnings for FY21.

“We see significant demand for the award-winning Lucid Air, with accelerating reservations as we ramp production at our factory in Arizona. We remain confident in our ability to achieve 20,000 units in 2022. This target is not without risk given ongoing challenges facing the automotive industry, with global disruptions to supply chains and logistics. We are taking steps to mitigate these challenges, however, and look forward to the launch of the Grand Touring, Touring, and Pure versions of Lucid Air through 2022.”

– said Peter Rawlinson, CEO and CTO of Lucid
Lucid Air’s Achievement

Lucid Air, the first model produced by Lucid Motors, is named the 2022 MotorTrend Car of the Year. MotorTrend announced on November 15, 2021 that it had won the 2022 MotorTrend Car of the Year, the first instance in which the first product from a new automotive start up brand has been awarded the “Golden Calipers.” This was an aid to Lucid in becoming the next ‘Tesla’.

Essential takeaways from the announcement include the following:

  • Lucid Air awarded MotorTrend’s Car of the Year against a formidable field of 24 competitors from major manufacturers
  • The win marks the first time that the initial product from a new automotive company has been awarded MotorTrend’s flagship Car of the Year award
  • Designed in Silicon Valley and produced in Arizona, Lucid Air delivers an industry-leading 500+ miles of range from Lucid’s proprietary powertrain technology, which is designed and built in-house
  • Announcement follows the start of customer deliveries for the fully-reserved Lucid Air Dream Edition

The company’s CEO was elated on this and remarked:

“Earning this coveted distinction for Lucid Air, our very first car, is a resounding endorsement of our ability to deliver the most advanced electric vehicles in the world. Our objective of achieving range through efficiency and technical innovation is crystallized in Lucid Air, and we’re elated that this effort has been recognized by MotorTrend against such formidable competition from well-established automakers.”

– said Peter Rawlinson, CEO/CTO, Lucid Group

Lucid is currently one of the hottest EV stocks out there. It’s also the only startup EV company that has started deliveries. Although their 2022 delivery target is just 20,000 cars, they seem to be the only car company worthy of competing with Tesla in terms of design, range and technology.

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