With Fisker collapsing, many investors are wondering which company could fall next -- is it time to give up on Lucid?
It's been a rough go for electric vehicle (EV) start-ups lately, Lucid Motors (LCID 0.55%) included. The company has cut production forecasts numerous times, slashed prices on its only vehicle, reported a widening net loss during the fourth quarter, and barely delivered 6,000 vehicles in 2023.
Combine those factors with a macroeconomic environment of high interest rates and slowing EV demand, and you get the collapse of an EV start-up such as Fisker. But is it time to also give up on Lucid, or should investors hang on during this rough patch?
Setting the scene
No matter which way Lucid turns, it faces challenges. At first the company's supply chain caused disruptions in production, and then once those issues were rectified, demand slowed and weighed on deliveries.
Lucid's fourth-quarter 2023 net loss checked in at $654 million, wider than the prior year's loss of $474 million, and production is expected to hit just 9,000 vehicles in 2024 after reaching nearly 8,500 in 2023 -- certainly not tantalizing growth.
The bigger picture is even more eye-opening, with Lucid's total 2023 net loss checking in at $2.8 billion compared to 2022's $1.3 billion loss. For context, the EV start-up's total liquidity was $4.78 billion at the end of 2023.
Time to give up?
Investors watched how quickly things can turn south with Fisker, as its stock price plunged 99% year to date and the New York Stock Exchange has delisted the stock. That said, Lucid likely has the liquidity needed to survive a year or longer before things get as dire as Fisker, since the latter couldn't even cover accounts payable recently.
Further, the industry is getting closer to the point when EVs will be much more price competitive with gasoline vehicles. In fact, Pedro Pacheco, vice president of research at technology analysis firm Gartner, said that EVs are predicted to be less expensive to build than internal combustion cars by 2027, thanks to innovative manufacturing techniques and declining battery costs.
The Gravity and low-cost platform
Another reason not to give up on Lucid just yet: Its product pipeline.
One could argue the biggest hurdle for Lucid so far has been selling its only vehicle, its Air sedan. Part of the difficulty in selling the vehicle is certainly its starting price tag of around $170,000. That price tag puts Lucid's only sellable product in a very high-end niche market -- one that was quickly saturated.
But later in 2024, the company is scheduled to launch its second vehicle, the Gravity crossover. The new offering starts under $80,000, which gives the company access to a broader consumer base. However, it's fair to note that this is still a fairly high price point, and it might not generate the demand needed at a time when other EV companies are trying to push prices down into the $30,000 range to tap into the mainstream consumer.
Further, after the company launches the Gravity, it plans to dive into a more mainstream luxury market with less expensive vehicles. The midsize platform is targeting a price tag around $50,000, and it's thought the first vehicle on the platform will be a crossover designed to compete toe to toe with Tesla's Model Y. Investors shouldn't expect this next platform vehicle to drive into consumers' garages until early 2026, but it's a future that Lucid can sell investors on sooner, rather than later.
Hang on
Ultimately, 2024 is set up to be a bumpy year for EV start-ups, including Lucid. Much anticipation rides on the company's upcoming Gravity launch, and the demand for that vehicle will heavily influence how investors feel about the company's ability to reach its long-term vision as a big-time EV player in the industry.
It's definitely not time to give up on Lucid, and its situation is far less dire than Fisker's, but investors willing to take on heavy risk owning a young start-up EV company in this macro environment should recognize it is highly speculative and volatile.
Daniel Miller has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Tesla. The Motley Fool recommends Gartner. The Motley Fool has a disclosure policy.
FAQs
The automaker is grappling with slowing growth, spiraling losses, and weakening consumer sentiment in the electric-vehicle (EV) industry, putting its long-term survival in doubt.
Is Lucid stock expected to go up? ›
Lucid Group Stock Forecast
The 9 analysts with 12-month price forecasts for Lucid Group stock have an average target of 3.82, with a low estimate of 2.90 and a high estimate of 5.00. The average target predicts an increase of 50.39% from the current stock price of 2.54. * Price targets were last updated on May 8, 2024.
What is the success rate of the Motley Fool? ›
If you're patient, Motley Fool is a get rich slowly plan. They recommend stocks to hold for 3–5 years. They have a track record of successful recommendations about 65% of the time. No one is perfect; but you can make good money with that success rate.
What is Lucid prediction for 2024? ›
The company said it expects capital expenditure of $1.5 billion in 2024 as it prepares to start manufacturing its Gravity SUV later this year, up from $910.6 million last year. Lucid said it was on track to produce 9,000 cars this year, compared to the 8,428 vehicles it made last year.
Is Lucid going to go out of business? ›
While many EV and green energy companies might go bankrupt over the next couple of years, Lucid Motors might not - for the simple reason that it had a total liquidity of $5.45 billion at the end of September 2023, which it believes will fund the launch of its Gravity vehicles and also last into 2025.
Is Lucid in trouble? ›
Lucid Group Inc.
(NASDAQ:LCID) had a tough start to 2024, with its stock down over 34%. The good news is that for now, Lucid can continue to count on its largest investors' backing to support its massive cash burn.
What is the outlook for Lucid? ›
LCID Stock 12 Month Forecast
Based on 8 Wall Street analysts offering 12 month price targets for Lucid Group in the last 3 months. The average price target is $3.16 with a high forecast of $4.00 and a low forecast of $2.90. The average price target represents a 25.40% change from the last price of $2.52.
What will Lucid stock be worth in 5 years? ›
According to the latest long-term forecast, Lucid price will hit $3 by the middle of 2025 and then $4 by the end of 2026. Lucid will rise to $5 within the year of 2028, $7 in 2031 and $8 in 2034.
Who owns the most lucid stock? ›
Top Shareholders
| Holder | # of Shares | Type |
|---|
| Mohammad bin Salman Al-Saud | 1,374,700,298 | Institution |
| Vanguard Index Funds | 93,656,827 | Institution |
| Vanguard | 80,685,495 | Institution |
| iShares | 12,644,932 | Institution |
6 more rowsLet's say that you start with the time frame in mind, hoping an investment will double in value over the next 10 years. Applying the Rule of 72, you simply divide 72 by 10. This says the investment will need to go up 7.2% annually to double in 10 years. You could also start with your expected rate of return in mind.
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Mark Roussin, CPA has positions in AbbVie, Alphabet, Coca-Cola, Microsoft, Prologis, and Visa. The Motley Fool has positions in and recommends Alphabet, Chevron, Home Depot, Microsoft, NextEra Energy, Prologis, and Visa.
Has anyone made money with Motley Fool? ›
Yes, Motley Fool stock picks have historically beat the market significantly. Their Stock Advisor picks have returned over 5x more than the S&P 500 over the past 20 years.
Do lucid motors have a future? ›
Lucid Motors may have run into headwinds in 2023 when it came to demand for the Air sedan, which prompted some price cuts (as with elsewhere in the industry). But the luxury EV maker is now aiming to boost its footprint in the US as it works on expanding its lineup further following the debut of the Gravity SUV.
Is Lucid a buy now? ›
Lucid stock has received a consensus rating of hold. The average rating score is and is based on 13 buy ratings, 15 hold ratings, and 7 sell ratings.
Is Lucid better than Tesla? ›
There's no question that the Lucid Air Sapphire is a better car than the Tesla Model S Plaid. It's brilliant to drive as a canyon-carving supersports sedan and a cross-country grand tourer. Its exceptional range and fast-charging capability challenge Tesla's reputation as the untouchable EV technology leader.
Why is Lucid Motors crashing? ›
On the heels of recent production shortfalls and a major recall for its 2022 and 2023 model Lucid Air vehicles, new signs of weakening EV demand threaten Lucid's outlook. The company is already facing some business-specific challenges, and the overall industry now appears to be moving in unfavorable directions.
Will lucid cars succeed? ›
The company faces significant challenges, including fierce competition, price considerations, and the need to continually improve its technology. However, if Lucid Motors can navigate these challenges successfully, it has the potential to become a key player in the EV industry.
How is Lucid doing financially? ›
Lucid reported Q1 revenue of $172.7 million on deliveries of 1,967 vehicles and expects to manufacture approximately 9,000 vehicles in 2024. In Q1, Lucid raised $1.0 billion in financing via a private placement to an affiliate of the PIF, reflecting the PIF's continued and steadfast support of the Company.
