The stock of electric vehicle (EV) startup Lucid (NASDAQ: LCID) has continued its losses from 2023 into the early days of the new year, facing setbacks that are also impacting the general market. Notably, the company continues to struggle in keeping up with rivals such as Rivian Automotive (NASDAQ: RIVN) and Tesla (NASDAQ: TSLA) in the premium EV market.
Lucid has encountered financial losses, and analysts emphasize the need for the company to scale up its production and deliveries to transition into a profitable state. In the short term, the stock has reached a new low point despite delivering 1,734 electric cars in the fourth quarter of 2023, surpassing Wall Street’s prediction of 1,696.
Worth noting is that the company beat estimates following a price reduction of up to $12,000 on its Air electric cars last year. Additionally, the company commenced deliveries of its Lucid Air Sapphire, a competitor to Tesla’s Model S Plaid.
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Following the delivery data, CFRA Research downgraded LCID from a Sell rating to a strong sell rating and further reduced Lucid’s 12-month price target on the company’s shares to $1.
In the quest for insights into the future projection of Lucid stock, Finbold consulted artificial intelligence-enabled algorithms on CoinCodex to analyze LCID’s stock price trajectory for the end of the year.
AI prediction for Lucid stock
The AI tool has predicted a bullish outlook for LUCID stock by December 31, 2024. According to CoinCodex, LCID is expected to trade at $11.35 on the last day of 2024, reflecting gains of over 270% from the price at the time of publishing.
The tool anticipates minimal gains for LCID in the short term, projecting it to trade at $3.19 by the end of January 2024.
On the other hand, Wall Street analysts at TipRanks also forecast a bullish trend for the stock in the next 12 months. Specifically, based on projections from nine analysts and considering the stock’s last three months’ performance, it is anticipated to trade at an average price of $5.09 in the next 12 months.
The high forecast is $7, and the low estimate is $1. The average price target represents a 69.38% change from the last price of $3.01. None of the analysts have recommended buying the stock.
It is worth noting that Lucid’s struggle is not uncommon, especially considering the company’s relatively new presence in the highly competitive EV industry. The challenges, particularly regarding demand, were evident in the company’s 2023 performance. Throughout the year, Lucid delivered 6,001 vehicles but produced 8,428, resulting in a 40% difference.
At the same time, the company grapples with challenges, as it was revealed that Lucid would recall more than 2,000 vehicles. The recall is reportedly attributed to potentially faulty high-voltage coolant heaters and encompasses the 2022 and 2023 Lucid Air model years.
These factors have generally affected the Lucid stock, which has continued to trade in the red over the past year.
Despite the lows, the company might have bullish elements in the future that are likely to impact its stock, such as support from its investors in Saudi Arabia. Notably, Lucid is enjoying backing from the Saudi Arabian government, holding a 60% majority stake in the company through its Public Investment Fund (PIF).
This strategic partnership aligns with the kingdom’s commitment to transition from fossil fuels, positioning the struggling automaker as a key player in achieving long-term diversification objectives.
As part of this collaboration, the Saudi Arabian government has committed to purchase 100,000 Lucid vehicles over the next decade.
Lucid stock price analysis
As of the latest update, Lucid is trading at $3.01, reflecting a 7% loss over 24 hours. Overall, 2024 has seen the stock experience a significant decline of more than 27%.
LCID has continued to incur short-term losses, influenced by the market’s response to reports indicating higher-than-expected inflation and potential cash flow redirection to cryptocurrencies from the stock market.
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