The stock price of electric vehicle (EV) manufacturer Lucid Motors (NASDAQ: LCID) continues to face downward pressure, shedding recent gains that helped the equity recover from its all-time low.
Notably, LCID received a temporary boost in response to news that competitor Tesla (NASDAQ: TSLA) was recalling over 4,300 vehicles in Australia due to software issues. Despite the short-term upside, Lucid’s gains have been short-lived, resulting in a 36% plunge in 2024.
As of the latest price recording, LCID is valued at $2.65, experiencing 24-hour losses of less than 0.5%. This current valuation is disappointing for investors, as maintaining the $3 support zone was considered crucial for facilitating a stock rebound.
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Lucid’s move to take on Tesla
Notably, Lucid’s losses are partly attributed to its business, which has experienced setbacks as the company strives to scale up production and deliveries while aiming to cut losses.
At the same time, the company has grappled with challenges in keeping pace with competitors like Tesla, which has maintained its dominance by implementing strategies such as price cuts.
In this regard, Lucid continues to implement initiatives to compete with established rivals. In a recent update, CEO Peter Rawlinson revealed that Lucid has been developing midsize vehicles to be unveiled soon. The initiative has been dubbed ‘Project Midsize’.
The development was revealed by Car and Driver contributing editor John Voelcker in a January 24 post on X (formerly Twitter). He disclosed that Rawlinson, during the launch of Lucid’s expanded Casa Grande facility in Arizona, showcased a photo of a sleek, sloped-back midsize SUV design concealed under a veil. However, the Lucid executive was adamant on the exact date for the product.
The potential unveiling of a midsize fleet holds significance for Lucid, as its current lineup comprises large sedan models with a high price tag, limiting their market reach. Introducing a midsize vehicle could position Lucid to compete with Tesla’s Model 3 or Model Y, potentially boosting production and deliveries and addressing critical needs for the company’s growth.
AI predicts chances of Lucid reclaiming $55
With Lucid’s recent stock decline partly attributed to the company’s inability to compete with rivals such as Tesla, the midsize models could position the EV maker for growth. As the stock struggles, attention remains on whether it can replicate previous gains and reclaim the all-time high of $55.
To gather insights into prospects of LCID reclaiming the record high, Finbold turned to generative artificial intelligence (AI) tools, including OpenAI’s ChatGPT and Alphabet’s (NASDAQ: GOOGL) Google Bard.
On its part, ChatGPT noted that it’s challenging to assess the possibility of the company reclaiming the record high. However, the tool cited factors that could impact Lucid’s growth, such as performance in areas like financials, product launches, and any significant developments.
The AI tool also highlighted that the possibility of attaining an all-time high depends on market conditions, economic factors, and analyst recommendations.
On the other hand, Google Bard pointed out that Lucid faces uncertainty, making it challenging to determine if the stock can reach its record high again. The tool emphasized the importance of investors considering indicators such as competition, production, and demand, as they can provide insights into LCID’s performance in 2024.
Meanwhile, nine Wall Street analysts at TipRanks anticipate a potential upside for Lucid stock in the next 12 months, though it is expected to fall short of its all-time high. According to projections based on the stock’s performance over the last three months, the average target for Lucid is $5.09, with a high forecast of $7 and a low forecast of $1. This average price target reflects a 92.08% change from the current price of $2.65.
Lucid recovery path
Currently, Lucid is grappling with the challenge of convincing investors that it can address recent shortcomings, particularly in production and significant losses. The company’s efforts to overcome these challenges include unveiling the Arizona factory, which is a positive step.
The expansion increases the factory size from 800,000 square feet to over 3.8 million, introducing a new production line dedicated to the upcoming Gravity EV crossover.
In addition to the midsize models, LCID is counting on expanding its product line, featuring the Lucid Gravity SUV scheduled for release in 2025. Anticipated growth also stems from potential gains from its partnership with the Saudi government.
However, the stock faces a long road ahead in reclaiming its record high in 2024 as it needs to convince investors it can grow consistently.
Disclaimer: The content on this site should not be considered investment advice. Investing is speculative. When investing, your capital is at risk.
