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Lucid stock crashes 12% in premarket; What’s going on with LCID?

Lucid stock crashes 12% in premarket; What's going on with LCID
Dino Kurbegovic

Luxury electric vehicle (EV) maker Lucid (NASDAQ: LCID) delivered only 679 vehicles in the second quarter of 2022 and slashed production targets. Investors are seemingly disappointed at what they heard during the earnings release, as the stock is now down 12.69% in premarket trading. 

Namely, the firm posted revenue of $97.3 million, missing expectations by $59.8 million; on the other hand, the earnings per share (EPS) were -$0.33, beating expectations by $0.08. 

Furthermore, the production volume outlook for 2022 was revised to a range of 6,000 to 7,000 vehicles versus the prior guidance given in May of 12,000 to 14,000 units. 

LCID premarket data. Source: Nasdaq

Supply chain woes

Peter Rawlinson, Lucid’s CEO and CTO blamed the supply chain issues for the revision cut.  

“Our revised production guidance reflects the extraordinary supply chain and logistics challenges we encountered. We’ve identified the primary bottlenecks, and we are taking appropriate measures – bringing our logistics operations in-house, adding key hires to the executive team, and restructuring our logistics and manufacturing organization.”

He added: 

“We continue to see strong demand for our vehicles, with over 37,000 customer reservations, and I remain confident that we shall overcome these near-term challenges.”

Finally, the firm’s management claims that the $4.6 billion in cash on hand that they have will be sufficient to fund the company into 2023. 

LCID chart and analysis 

In the last month, LCID has been trading in the $17.77 to $21.78 range, with the short-term trend turning sour with the premarket drop. The stock was trading in the lower end of its 52-week range, with the support line moving down to $17.71 and the resistance line to $18.70.  

LCID  20-50-200 SMA lines chart. Source. data. See more stocks here.

The strong demand for Lucid Air, of roughly 37,000 reserved units, could equate to sales of $3.5 billion, which in turn could allow the company to invest more in supply chains closer to home and more research and development. 

Meanwhile, the current trend is indicating that the stock may test the May 2022 lows; therefore, investors should watch for more volatility in the share price. 

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