The electric vehicle (EV) industry, once considered the harbinger of a green revolution, is starting to show cracks in its façade, with Lucid Motors’ (NASDAQ: LCID) epitomizing this turbulent phase.
As of late, Lucid’s shares have been on a spiraling downturn. A catastrophic 17% drop over the last week, a descent of nearly 40% in the past three months, and an all-time low of $4.26 per share paints a somber picture for investors.
Several factors have conspired to push Lucid to the brink. The company’s repeated struggles to meet production goals, coupled with a broader anticipated slowdown in the EV market, have left shareholders with jittery nerves.
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Lucid’s recent announcement about the launch of its Gravity SUV at the Los Angeles Auto Show on November 16 should have been a silver lining. However, the revelation that production wouldn’t commence until late 2024 dimmed any resultant enthusiasm.
AI-driven predictions by CoinCodex, as cited by Finbold, set a rather cautious tone. Projecting Lucid’s stock to rise to $6.17 in a year and marginally peak at $6.69 at the outset of 2024 indicates tempered expectations.
By 2025, LCID is expected to hover around $10.26, a commendable 135.14% increase from its current levels. Yet, while this might offer a glimmer of hope, the current scenario raises questions on the viability of such predictions.
Lucid’s future looks bleak on the surface
A deeper dive into Lucid’s operations reveals an unsettling trend. The company’s challenge in ramping up the production of its Lucid Air luxury electric cars remains evident. The third quarter results were underwhelming, to say the least: 1,550 vehicles produced, 1,457 units delivered, and a significant number of vehicles—700 to be exact—shipped to Saudi Arabia for assembly. The dwindling production figures are even more alarming when juxtaposed with prior quarters.
Adding to the murky waters is Lucid’s opacity in revealing reservation numbers post the first quarter of 2023. As of February 21, 2023, they reported over 28,000 reservations (excluding the colossal Saudi Arabian agreement for 100,000 cars over a decade). However, this figure had been in steady decline, hinting at waning demand for Lucid’s offerings.
One of the most pressing concerns is Lucid’s ambitious claim of achieving a 10,000-unit full-year production target. With the recent numbers in consideration, the feasibility of such a goal remains suspect.
The broader industry trends don’t help Lucid’s case. With indications of an impending slowdown in the EV market, companies like Lucid, which are already facing production hurdles, are set to face even stronger headwinds. Tesla Inc.’s (NASDAQ: TSLA) recent cautionary statements provide further rationale for investors to remain wary of the EV stock landscape, with Lucid being no exception.
Lucid’s future might seem clouded in uncertainty, but the potential for recovery remains. Whether it can harness the power of innovation and market dynamics to rebound from its current predicament is a narrative that remains to be seen.
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