Lucid (NASDAQ: LCID) has become something of a posterchild for the troubles facing West-based electric vehicle (EV) makers that are not Tesla (NASDAQ: TSLA).
Not only has LCID stock done little else than decline in 2024 and beyond, but technical analysis (TA) of the shares now signals an even greater downtrend to come.
Specifically, on the evening of Thursday, November 14, Lucid formed its first death cross chart pattern since 2022. The death cross is a technical analysis signal that forms when the short-term moving average (MA) moves below the long-term MA.
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As the name implies, it signals an imminent downtrend – a prospect particularly concerning for LCID stock investors.
Why the latest death cross could kill Lucid stock
To begin with, the previous Lucid shares’ death cross triggered a downturn that the company has not escaped to date. Lucid shares entered 2022 priced above $40 and crossed into 2023 valued below $7.
Repeating such a downtrend could finally eliminate Lucid as a credible investment and a credible player in the electric vehicle (EV) industry, as the stock has dropped 49.52% to its press time price of $2.10 even before forming the death cross.
Why is Lucid stock price collapsing?
Lucid’s downfall is the story of a death by a thousand cuts, and the EV maker might still be in the race due solely to the influence and wealth of its majority owner – the Saudi Arabian Public Investment Fund (PIF).
Once heralded as a ‘Tesla-killer,’ the EV maker has woefully underperformed investor hopes and its own promises as, for example, it missed its original delivery target for the first half of 2024 by about 90%.
Additionally, while traders and analysts were optimistic that Lucid’s inbound models could revitalize the company, the news that the first new SUV to come will be priced above $94,000 and that there will be no cheaper offerings before 2025 left them sorely disappointed.
Could 2025 be better for LCID shares?
The EV maker’s issues related to its inability to move its premium units en masse might also worsen in the coming years due to a sharp shift in U.S. policy.
Even the biggest West-based electric car company, Tesla, entered a steep 1-day decline following the news that the incoming Trump administration is preparing to cut the $7,500 EV tax credit. For its part, LCID collapsed 4.59% on the same day.
The Republican’s promised tariff increases are also likely to impact the already high prices of Lucid’s models, meaning the company may face even stronger headwinds.
Such an outlook has become prevalent among prominent Wall Street analysts. Wedbush’s Dan Ives, for example, has long predicted that the EV industry as a whole will suffer under Trump but that Tesla might benefit by better absorbing the headwinds and increasing its lead over competitors.
Should the predicted dynamic play out, it would mean that Lucid’s already comparatively minuscule market shares will fall further, likely reinforcing the downtrend and leading to an ever-increasing number of missed delivery targets.
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