24/7 Insights
- Lucid Group Inc. (NASDAQ: LCID) stock is still in trouble and will not recover. It is too small and loses too much money to survive.
Any good news Lucid Group Inc. (NASDAQ: LCID) has released this year has not saved investors from a stock that has dropped considerably in value. Despite a modest recovery, shares are off 30% this year, while the S&P 500 is 19% higher. Even shares of beaten-down Tesla Inc. (NASDAQ: TSLA) are flat over the same period.
Lucid will likely not be rescued the way small electric vehicle (EV) company Rivian Automotive Inc. (NASDAQ: RIVN) was by Volkswagen. The German giant will invest as much as $5 billion in Rivian, primarily to access its sophisticated EV intellectual property. Lucid would have had a similar deal by now, but most giant car manufacturers have their EV fleets and strategic plans they believe in.
Saudi Arabia’s Public Investment Fund invested about $1 billion in Lucid, which did not change the overall sentiment about the EV firm. In the first quarter, Lucid delivered only 1,967 vehicles. Will Lucid go under like Fisker did?
Earnings for the first quarter were terrible. Revenue was only $172 million, up from $149 million in the year-ago period. Lucid lost $684 million, compared to $775 million a year ago. Lucid’s unit sales would need to surge for it to break even. The company said it hopes to make only 9,000 vehicles this year.
Even if Lucid had not lost so much money, the EV industry is in trouble in the United States and Europe. Prices are considered too high, and people are worried about how far vehicles go on one charge and, based on much public opinion, there are not enough charging stations.
Don’t wait for Lucid shares to recover because they won’t.
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