24/7 Insights
- After a recent run, Lucid Group Inc. (NASDAQ: LCID) stock has reversed course.
- Tiny production numbers suggest the EV maker will have to raise money again soon.
After a surge triggered by management’s comments that its $1 billion deal with the Saudi Arabia Public Investment Fund had started to yield results and posting production numbers slightly better than expected, Lucid Group Inc. (NASDAQ: LCID) posted a sharp sell-off that took the stock down by almost 16% in a single trading day. Investors may have examined the recent news and found nothing truly encouraging.
The Trouble With Lucid
While investors liked Lucid’s second-quarter production numbers at first, those numbers were tiny. Production totaled 2,110, and deliveries hit 2,394. These are not enough to show that Lucid can break even anytime in the foreseeable future. That means it will need to raise more money, which could cause dilution and cause the stock to sell off further.
Lucid announces quarterly results on August 5 and will post another loss in the hundreds of millions of dollars. In the most recently reported quarter, revenue rose from $149 million in the year-ago quarter to $172 million. Its operating loss was $772 million last year and $730 million in the recent quarter. At its current burn rate, it needs more money.
Lucid faces the same barriers as every EV maker. Many buyers are worried about the distance EVs will go on one charge, the number of charging stations, and the price of the cars. Lucid certainly has a price challenge. The price range of Lucid’s vehicles is $70,000 to almost $90,000. Experts say the EV market can only grow if prices drop to $25,000. Major car companies, including Tesla, plan to come to market with vehicles in that range. Even at high prices, Lucid is up against EVs from BMW, Mercedes, Porsche, and Cadillac. (See the top 10 EV brands right now.)
Eventually, and probably soon, Lucid’s unit sales will need to rise to the tens of thousands each quarter. Today, it is not even close.
Be sure to grab a copy of our “The Next Nvidia” report if you are looking for more great stock ideas.
100 Million Americans Are Missing This Crucial Retirement Tool
The thought of burdening your family with a financial disaster is most Americans’ nightmare. However, recent studies show that over 100 million Americans still don’t have proper life insurance in the event they pass away.
Life insurance can bring peace of mind – ensuring your loved ones are safeguarded against unforeseen expenses and debts. With premiums often lower than expected and a variety of plans tailored to different life stages and health conditions, securing a policy is more accessible than ever.
A quick, no-obligation quote can provide valuable insight into what’s available and what might best suit your family’s needs. Life insurance is a simple step you can take today to help secure peace of mind for your loved ones tomorrow.
Click here to learn how to get a quote in just a few minutes.
Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.
Latest from 24/7
