As Tesla Stock Surges, Lucid Falls

By Douglas A. McIntyre Published Nov 8, 7:10AM EST

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As Tesla Stock Surges, Lucid Falls — © Toa55 / iStock via Getty Images

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Tesla Inc. (NASDAQ: TSLA | TSLA Price Prediction) stock saw a post-election surge, but shares of smaller rival Lucid Group Inc. (NASDAQ: LCID) retreated.
Investors seem to think Lucid will be more of a victim if tax credits for EV buyers are eliminated.
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The Tesla Inc. (NASDAQ: TSLA) share price rose by a double-digit percentage after Trump’s election victory. The primary impetus for that appeared to be the close relationship between Tesla CEO Elon Musk and the president-elect. However, it is unclear whether the new president might end up with policies that favor America’s largest electric vehicle (EV) maker. In a period in which EV sales in the United States have slowed, Tesla’s gain would create victims of the smaller companies competing with it, each battling for market share in a stagnant industry.

The day after the election, Tesla’s stock was up almost 20%, and the share price of Lucid Group Inc. (NASDAQ: LCID) retreated by as much as 8%. It recovered somewhat the next day but is still down 47% for the year. Tesla’s surge put it up almost 20% and the S&P 500 is up 24% over the same period. At just above $2 a share, Lucid is considered a penny stock by most definitions.

Lucid cannot afford Tesla to have an edge beyond its much larger company’s unit sales and revenue, and the market share it already has.

Lucid’s revenue rose 45% in the third quarter, compared to last year, but only to $200 million. It lost $932 million, compared to a loss of $631 million in the same quarter a year ago. And, disappointingly, it delivered only 2,781 vehicles.

The theory is that the new president will cut tax credits for EV buyers. On paper, that should also hurt Tesla, but investors do not think so. It appears that investors think Lucid will be a victim.

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About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.