Lucid Motors stock (NASDAQ:LCID) remains one of the most watched stocks on the NASDAQ this year as the company closes in on its first deliveries of its luxury EV Lucid Air model. The stock gained 28% in yesterday’s trading session, marking one of its best trading days since its merger with CCIV.
The importance behind the companies first deliveries, which is expected to take place on October 30, is that Lucid Motors is transitioning from a pre-revenue phase company to recording sales on the income statement and focusing the companies marketshare in the EV space.
For high-tech firms especially in the luxury EV industry, delivery growth and vehicle margins are key fundamentals investors tend to focus on. Therefore, the October deliveries have reinstated a bullish sentiment in the Lucid Motors stock after a quiet few months. However, it’s not just the October 30 deliveries that investors are excited about. Here’s everything you need to know about Lucid Motors stock as the company transitions to a revenue generating business.
Lucid CEO Rawlinson has set out to challenge Tesla from the very start
A unique aspect of Lucid Motors and their management is that they have always set out to take on the Goliath EV maker Tesla. Rawlinson spent time as an engineering executive at Tesla prior to starting the Lucid Motors enterprise. More recently, Rawlinson highlighted that both Tesla and Lucid make their Electric Vehicles from scratch, down to the battery packs, software and even the transmissions.
According to Rawlinson, Lucid and Tesla are currently the only Electric Vehicle manufactures that do this. This of course gives both companies greater performance control and explains the insane range of the Lucid Air Dream. The Lucid Air Dream Edition received an Environmental Protection Agency-rated range of 520 miles, beating the Tesla S Long Range Model range by 108 Miles. This makes it the longest-range EV ever rated by the agency.
Overall, Lucid’s management team have successfully brought a high performance, Luxury Electric Vehicle to the North American market which is an extremely difficult task, as we saw with Tesla’s long road to success. However once Tesla entered the market, the demand was astronomical and investors are banking on Lucid Motors to see a similar level of demand over next 12 months.
Can the Lucid Air steal marketshare from Tesla?
The first Lucid Air deliveries mark an important milestone for the company however it will only mark the beginning of a new era of luxury Electric Vehicle’s in North America. The question on investors minds is how much market share can the Lucid Air steal from Tesla?
Lucid expects the Lucid Air to take 0.6% of the global EV market share in 2022. It will be crucial for Lucid to deliver on this first market share target, which will establish their name as a true player in the EV luxury market. By capturing marketshare particularly in North America next year, the Lucid Air model aims to steal market share off Tesla’s luxury S model.
Looking ahead, Lucid Air is expects to hold 0.5% of the global EV market share by 2025 according to company estimates. As we noted in a previous article, Michael Klein Chairman and CEO of CCIV is confident that the Lucid Air will significantly disrupt the EV market over the coming years.
“We are pleased to partner with Peter and the rest of Lucid’s leadership team as it delivers the highly anticipated Lucid Air to market later this year, promising significant disruption to the EV market and creating thousands of jobs across the U.S.”said Michael Klein, Chairman and CEO of CCIV.
Wallstreet analyst sees Lucid Motors stock as the Ferrari of new EV makers
Last month, Bank of America analyst John Murphy initiated coverage on Lucid stock with a Buy rating and $30 price target. Murphy noted that Lucid Motors were the “Tesla/Ferrari of new EV automakers.” The analyst also noted that Lucid were “one of the most legitimate start-up EV automakers” currently trading according to theFly.
In Murphy’s analysis, the multiples used for his price target valuation is at a premium compared to Tesla’s (NASDAQ:TSLA) early trading multiples and multiples from Lucid’s peers. Lastly, Murphy added that Lucid’s competitive technology is an attractive product in the Air sedan which holds key advantages over competitors.
Interestingly, at the time of the $30 valuation Lucid Motors stock was trading at $19 a share. After yesterday’s rally, the stock surpassed the $30 valuation for the first time since June 30.
The Bottom Line – Lucid Motors Stock Forecast
In summary, Lucid Motors is entering into an exciting phase of growth for the company with deliveries expected on October 30. With a strong PR play expected on social media with its its first deliveries, investors are creating a buying frenzy of Lucid stock.
The real test for Lucid Motors stock will be quantifying its effect on North American EV marketshare. If it is inline with the companies estimates, we can expect Lucid Motors to thrive over the next few reported quarters. With deliveries expected on October 30, these sales will be reported in the Q4 report.
The information above is strictly for informational purposes only and is not financial advice nor does it constitute a recommendation. 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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