Lucid Motors (NASDAQ: LCID), the luxury electric vehicle (EV) manufacturer, has encountered a challenging year so far after grappling with missed revenue expectations and the need to reduce its workforce.
The company’s stock has been in the red since the beginning of the year, reflecting the difficulties faced by the innovative electric vehicle maker.
However, Lucid’s fortunes may be poised for a change. On Monday, June 26, the company struck a major supply deal with UK car manufacturer Aston Martin. Notably, Aston Martin is set to pay a $232 million technology access fee to Lucid in a cash and stock deal over a 3-year period. In return, Lucid will allow the Gaydon, UK-based auto giant, to access its powertrain and battery technologies.
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Lucid’s shares opened sharply higher on Tuesday trading following the reports. Aston Martin’s stock rose to the highest level in over a year. At the time of publication, shares of Lucid Motors were changing hands at $5.98, up 9.34% on the day.
The upward move partially offset the earlier weekly losing streak that saw the EV maker lose more than 17% in stock value. Year-to-date, the company’s shares still remain in the red, down 3.7%.
What it means for LCID
While the jump represents a sign of optimism, LCID stock still needs to overtake the former support level at $6.20 to embark on a sustained rally. If that happens, it could propel the company’s shares up to the resistance range between $8 and $8.28 or even the $8.69 resistance level from April 11 and 12.
The surge marks a much-needed boost for LCID shares, which have been struggling this year due to the company’s mounting losses and restricted cash reserves amid recession risks and a price war triggered by EV leader Tesla (NASDAQ: TSLA).
Last month, Lucid slashed its 2023 production outlook and posted a lower-than-anticipated Q1 revenue, sending its shares plummeting.
Details of the deal
Additionally, Lucid’s powertrain and battery parts will be integrated with Aston Martin’s battery electric vehicle (BEV) chassis.
“Combined with our internal development, this will allow us to create a single bespoke BEV platform suitable for all future Aston Martin products, all the way from hypercars to sports cars and SUVs.”
– Roberto Fedeli, chief technology officer of Aston Martin, said in a statement.
Aston Martin also pledged to spend a minimum of $225 million on Lucid’s powertrain components.
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