The stock price of electric vehicle (EV) startup Lucid Motors (NASDAQ: LCID) has reached a new low, dropping below the $3 mark, as the company struggles to compete with established players such as Tesla (NASDAQ: TSLA). The drop marks Lucid’s accelerated downtrend, experiencing losses of over 30% in 2024.
In the short term, Lucid stock, along with other electric vehicles, has faced challenges from various factors. A significant setback occurred when Hertz announced liquidating 20,000 electric vehicles from its rental fleet.
Additionally, concerns about winter storms are impacting the prospects of most EVs, with reports of owners struggling to charge their vehicles amid extreme winter conditions.
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What next for LCID?
Despite the current pullback, Lucid has the potential to rally in the future as it relies on several vital fundamentals. When comparing recent performances, Lucid’s most significant positive element is its partnership with the Saudi Arabian Public Investment Fund (PIF).
In the deal, PIF acquired 265.7 million new Lucid shares, valued at about $1.8 billion, in a June 2023 private placement. This contributed to Lucid’s goal of raising $3 billion through a stock offering and includes the delivery of approximately 100,000 vehicles in Saudi Arabia.
The Saudi government partnership is a positive aspect for the company, considering that falling stock prices may limit financing options.
Additionally, Lucid signed a deal with Aston Martin to supply drive and battery systems for the company’s future electric cars, with contracts valued over $450 million.
In ramping up production, Lucid already has plans to eat into the growing EV market through initiatives to expand its product lineup beyond the Lucid Air model. In this line, the company plans to begin deliveries of the forthcoming Lucid Gravity SUV in 2025.
Lucid earnings report
The company’s 2023 Q4 results show improvement compared to the rest of the year. In the last quarter of 2023, Lucid produced 2,391 Lucid Air electric cars (32% less than in 2022) and delivered 1,734 units globally (10% decrease YoY). Despite missing targets, both figures showed sequential improvement, marking the second-best performance after the Q4 2022 record amid price cut initiatives.
Elsewhere, nine Wall Street analysts at TipRanks predicted LCID’s future price performance. They anticipate an average price of $5.09, with a high projection of $7 and a low projection of $1 in the next 12 months. The average price target reflects a 92.08% change from the last price of $2.65.
Lucid stock price analysis
By press time, Lucid was trading at $2.65, experiencing a nearly 36% decline in 2024. In the past week, the stock dropped by almost 23%.
A review of recent movements shows that LCID has a prominent support zone at $2.50, as indicated by a trend line on the daily time frame. On the upside, it encounters a substantial resistance level at $3.5.
Considering all factors, Lucid looks grim in the short term but still has a positive outlook, and the projected interest rate cuts are likely to give it a boost in 2024. Most importantly, the company needs to cut losses and ramp production.
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