Lucid Motors stock (NASDAQ:LCID) rallied on its first day as a public company following the highly anticipated merger with CCIV. The stock jumped 10.64% on Monday, marking a new era for the luxury electric vehicle manufacturer.
Lucid Motors has captivated the interest of investors after noting their ambitions to take on domestic giant Tesla. Today we will breakdown everything investors need to know about Lucid Motors stock.
Why the Lucid Motors merger was a big deal
The highly anticipated merger between SPAC Churchill Capital Corp IV and Lucid Motors made waves on Wallstreet. The business combination raised approximately $4.4 Billion for the combined company to fund their expansion strategy.
The strategy involves the execution of its operational initiatives including the expansion of Lucid’s manufacturing facility in Arizona.
Unlike many other Electric Vehicle mergers this year, Lucid Motors can provide investors some peace of mind that deliveries are on the horizon in 2021. This of course translates to revenue which will be vitally important if the company wishes to produce 1 million vehicles by 2027.
Lucid Motors will be lead by CEO & CTO Peter Rawlinson who has spent time as an engineering executive at Tesla.
“Lucid has further increased its momentum as we gear up to make the first customer deliveries of our Lucid Air lineup of electric sedans later this year.
We are making significant investments in the long-term growth and innovation of our company, and we will continue to bring to bear world-class technology to positively impact mankind’s transition to sustainable mobility. “
Lucid Motors expects to generate $2.21 Billion next year
The lucrative, luxury electric vehicle market is expected to grow to $733 Billion by 2026. Lucid Motors aims to lead this industry with their Lucid Air sedan model.
Deliveries for the Lucid Air are progressing well and on track to begin production in the second half of this year. Therefore, Lucid Motors stock will likely track the success of this timeline meaning any delays in production will have a strong influence on price action.
The company currently has 11,000 paid reservations for the Lucid Air, which is expected to have a realised value close to $1 Billion. Furthermore, Lucid expects to deliver upwards of 20,000 vehicles in 2022 which will generate $2.219 Billion in revenue.
In 2023, the company aims to expand their inventory with the Gravity SUV model. The company expects to deliver 12,000 SUV’s and 36,000 Lucid Airs in 2023. This forecast translates annual revenue of $5.5 Billion, more than doubling YOY.
Looking long term with Lucid Motors
Firstly, shareholders are excited about the midterm outlook for the company. However, the companies long term ambitions are extremely impressive. By 2026, the company expects to deliver 251,000 vehicles annually. This is expected to generate Lucid over $22.7 Billion in annual revenue. In comparison, Tesla generated $31.5 Billion in 2020 which highlights how far Lucid has to go.
Nevertheless, the company aims to produce over 1 million luxury electric vehicles by 2027. The company also expects to have $1.515 Billion in Free Cash Flow by 2026. If compared to Tesla, the EV giant currently holds $619 Million in Free Cash Flow based on their Q2 earnings result.
The comparison of Lucid Motors long term outlook and Tesla’s current position shows the scale of which Tesla is currently operating in the EV space. In saying this, Lucid Motors aims to steal market share off the giant.
This of course would close the gap between both companies, which would be a major win for long term Lucid Motors shareholders.
The Bottom Line – is Lucid Motors stock a buy?
In summary, the merger between Lucid and CCIV has opened up an exciting new chapter for the luxury EV manufacturer. Lucid Motors is generating serious investor sentiment, which has been a rarer sight in the SPAC market this year.
As discussed the mid-long term outlook provided by the company highlights the lucrative market Lucid aims to tap into. Overall, Lucid Motors stock is one to watch in 2021.
Written by Tyger Fitzpatrick
The information above is not financial advice. Youth Investment Group has no liability for personal financial interests or investment decisions. You should make your own investment decisions based upon your own research and what you believe is best for you.
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