Lucid Group today
As of 11:34 am ET
- 52 week range
- US$1.93
▼
$4.43
- Target price
- $3.04
Lucid Group, Inc. NASDAQ: LCID recently caught the attention of investors by announcing record sales and delivery figures for the fourth quarter of fiscal year 2024 (Q4FY24). This news, coupled with the highly anticipated launch of the new Gravity SUV, paints a picture of a company on the move. At the same time, shares of the electric vehicle maker have dropped noticeably, leaving many wondering whether this is a sign of serious trouble or a golden opportunity to buy.
As Lucid navigates the rapidly evolving electric vehicle (EV) market, a closer look at its first and third quarter fiscal 2024 performance, strategic initiatives and challenges ahead is warranted.
2024: Building on the foundation of success
Buoyed by a 40% year-over-year delivery increase in the first quarter and a 70.5% year-over-year increase in the second quarter, Lucid continued its upward trajectory in the third quarter, delivering 2,781 vehicles. While production fell slightly to 1,805 vehicles from 2,110 in the second quarter of 2024, this could be seen as a strategic adjustment reflecting Lucid’s efforts to align production with demand and optimize inventory levels.
This is not an indication of a slowdown, but rather a calculated move as part of a broader growth strategy. This is further highlighted by the fact that the company met its annual production target of approximately 9,000 vehicles, producing 9,029 vehicles in 2024. Additionally, shipments continued to outpace production for the year, culminating at 10,241 shipments, further evidence of growing demand.
Lucid’s financial results for the third quarter of fiscal 2024 continued the positive trend of the first half of the year. Revenue remained stable at $200.0 million, roughly the same as the second quarter. This stable income, coupled with the significant capital raised during the year, indicates that the company is strengthening its financial position. Lucid plans to report fourth-quarter 2024 financial results at the end of February.
The $1.75 billion raised in October, following $1 billion raised in the first quarter and a $1.5 billion commitment received in the second quarter, underscored the continued confidence of major investors such as Saudi Arabia’s Public Investment Fund (PIF) ). This unwavering support provided Lucid with approximately $5.16 billion in total liquidity at the end of the third quarter, providing a healthy financial cushion to support its ambitious strategy.
Gravity SUV: a bold entry into a new market
The launch of the Lucid Gravity SUV marks an important milestone. This entry into the SUV market, which begins production in late 2024, opens up a huge new segment for the electric vehicle maker. With a starting price of $94,900, the Gravity Grand Touring boasts a projected range of more than 440 miles and a powerful 828-horsepower engine capable of accelerating from 0 to 60 mph in less than 3.5 seconds. A more affordable Touring model, priced at $79,900, is scheduled for release in late 2025.
The Gravity SUV is a testament to Lucid’s commitment to innovation. The vehicle seats up to seven adults and has up to 120 cubic feet of cargo space, all within the footprint of a midsize SUV. A strategic partnership with Panasonic Energy ensures that Gravity will be equipped with the latest 2170 lithium-ion batteries. Known for their high energy density, these next-generation cells play a critical role in delivering Gravity’s impressive range and performance.
Technological mastery: the defining advantage
Lucid’s core strength lies in its patented electric vehicle technology. For example, the 2025 Lucid Air Pure model achieved an impressive efficiency rating of 5.0 miles per kilowatt-hour and a record EPA-estimated range of 146 mpg. Additionally, the 2025 Lucid Air Grand Touring should achieve an EPA-estimated range of 512 miles, a testament to Lucid’s advanced engine design, battery cell chemistry and thermal performance.
The company’s vertically integrated approach, which includes developing and producing powertrains in-house, allows for greater control over quality and innovation. This technological advantage extends beyond vehicles. Lucid partners with Amazon NASDAQ:AMZN Integrate Alexa into your cars, enhancing your driving experience with seamless control over navigation, communications and multimedia. The rollout of multiple over-the-air software updates throughout 2024 further underscores Lucid’s commitment to continuous improvement and innovation.
Purchasing problems and opportunities
Despite the positive momentum, Lucid faces serious challenges. The electric vehicle market is becoming increasingly competitive, with both established automakers and new entrants vying for market share. Although Lucid has seen growth in production and shipments, it continues to operate at a net loss. The company’s ability to achieve profitability will depend on its success in scaling production, managing costs and expanding its customer base.
Additionally, recent stock market volatility has impacted Lucid’s share price. As of January 9, 2025, Lucid shares were trading down 6.3% at $2.98. The decline could be attributed to a variety of factors, including broader market trends and investor concerns about the company’s ability to achieve profitability in the near future. In December 2024, Lucid CEO Peter Rawlinson openly expressed interest in partnering with the traditional car manufacturer. Such a partnership could help Lucid save money and increase revenue by licensing its technology. For example, in a similar collaboration Rivian NASDAQ: RIVN will provide Volkswagen with some of its automotive technology worth up to $5.8 billion.
Lucid Group, Inc. Price Chart (LCID) on Friday, January 10, 2025
Lucid’s future success depends on its ability to effectively execute its strategic plans. The successful launch and ramp-up of the Gravity SUV will be critical. Continuous technological innovation, cost management and strategic partnerships will also play a vital role. The upcoming fourth quarter 2024 earnings release scheduled for February 25, 2025 will provide investors with additional information about the company’s financial performance and future prospects.
In the meantime, investors will be watching closely to see whether Lucid can maintain its growth trajectory and navigate the challenges of a dynamic EV market. The recent drop in stock prices could present a buying opportunity for those who have a long-term investment horizon and believe in Lucid’s vision. However, the inherent risks associated with the rapidly evolving electric vehicle industry and Lucid’s current financial position require careful consideration.
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