Lucid is a “B” rated stock in Portfolio Grader. Reduced production targets and those ongoing supply chain problems have been a big part of the LCID stock story in 2022.
LUCID NEWS WINDOWS
In February, it announced that target has been slashed to between 12,000 and 14,000 because of “extraordinary supply chain and logistics challenges.” The company has reported challenges in obtaining everything from computer chips to glass for windows and carpet for car interiors. The company had initially been targeting production of 20,000 vehicles this year. More problematic in the immediate term are ongoing supply chain issues. Lucid customers may be well-heeled (the cheapest model starts at $69,900), but even they may cut down on splurges like a luxury EV if the situation worsens. However, there are reasons why LCID stock is down so dramatically in 2022.Įconomic challenges like inflation and rising interest rates are spooking the market. The case for buying Lucid stock looks pretty good with the Lucid Air in production, winning awards, piling up orders and now the subject of a massive Saudi government purchase. Supply Chain Challenges and Economic Concerns In addition, CNBC reports that Saudi Arabia’s Public Wealth Fund holds roughly 62% of LCID stock. Remember that commitment to build a factory in Saudi Arabia? That makes sense now. Volume will initially be 1,000 to 2,000 vehicles annually starting no later than Q2 2023, and ramping up from there. The agreement will see the Saudi government purchase 50,000 Lucid EVs over the 10 year period, with the option to purchase another 50,000. The oil-rich nation is on a mission to adopt sustainable technology, and that means EVs. The company has reservations for over 25,000 of them, representing some $2.4 billion in sales. It launched to rave reviews and won Motor Trend’s prestigious 2022 Car of the Year Award. The Lucid Air is the company’s first EV, and it has been a runaway success. Lucid also announced it was planning to open a new manufacturing plant in Saudi Arabia. In addition, the company announced a planned 2.85 million square foot expansion of its Arizona manufacturing facility was on track. As of the end of February, Lucid had produced over 400 EVs, with 300 of those already in customer hands. The company has gone beyond concept vehicles and mockups - the easy part - to opening a factory and beginning commercial production. Lucid has successfully passed the toughest part of being an EV startup. The question is, with shares still near all-time lows, should you buy LCID stock? Ticker The market reacted to the Saudi deal by sending LCID up 2.4%. That’s a big deal for an EV startup that is just beginning production. News broke that the government of Saudi Arabia has placed an order for up to 100,000 Lucid EVs over the next decade. Wednesday was an altogether different story. LCID closed at $17.64, a 9% drop and an all-time low for the company’s shares. On Tuesday, Lucid was among a group of EV stocks that took a hit.
In contrast, 2022 has seen LCID stock in an extended slump. In just three weeks starting October 22, 2021, shares more than doubled in value. LCID stock soared last fall as the Lucid Air went into production and began winning awards. However, the story so far in 2022 has largely been a dismal one for Lucid investors. LCID stock popped ever so slightly the day after that news broke. There have been a few bright spots, like the announcement of the Lucid Air Grand Turing Performance, a $179,000 luxury performance EV with a 446 mile range.
LUCID NEWS FULL
Lucid (NASDAQ: LCID) has felt the full effect of the 2022 market pullback for growth stocks.
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