Could Lucid's Swift expansion be encountering an Obstacle or Setback soon?
No doubt about it, Lucid Motors (LCID plummeting 7.55%) has had its fair share of setbacks. The up-and-coming electric vehicle (EV) manufacturer has navigated intense competition, price wars, supply chain woes, recalls, and software hiccups – just to name a few hurdles.
But 2024 emerged as a victorious year, marking substantial sales growth for the company. In the final quarter, Lucid delivered an impressive 3,099 vehicles, marking the fourth consecutive quarter of record EV deliveries, and culminating in a total of 10,241 deliveries – a 70% increase over the previous year.
Investors longed for this growth, with hopes that the highly anticipated Gravity SUV would further boost Lucid's delivery figures in 2025. The current surge in vehicle production has already led to a trickle of Gravity deliveries, with 665 units transferred in January, representing a sharp increase of 51% from the prior year, and an impressive 50 of these Gravity SUVs. New deliveries are likely to increase as the year progresses.
However, 2025 may bring one more challenge in the shape of potential stagnation in the U.S. EV market. According to J.D. Power, U.S. retail sales of EVs might mirror the 9.1% share of the auto market that they held in 2024, amounting to approximately 1.2 million units sold.
This slowdown in growth can be attributed to multiple factors, such as:
- Uncertainty around federal EV incentives
- Speculation on tariffs on imported products
- The ongoing struggle with public charging infrastructure
With Lucid Motors relying heavily on incentives to attract customers, uncertainty over them could dampen sales. Moreover, consumer frustration with the reliability and availability of public charging stations could further deter potential buyers. Lastly, the prospect of tariffs could make Lucid's vehicles less competitive and damage demand.
Despite the difficulties, J.D. Power predicts that the EV market will expand to 26% of the retail market by the end of the decade, which could prove advantageous for young start-ups like Lucid. To surpass the million EVs per year milestone, Lucid's CEO, Peter Rawlinson, plans to leverage the company's advanced EV technology and an upcoming midsize platform, which will underpin both a sedan and a crossover, starting at approximately $50,000.
While the Gravity sales boost could make 2025 a successful year, investors should remember that Lucid Motors is a young start-up in the EV market, burning through capital, and exhibiting volatile stock performance. Therefore, it would be wise to maintain a small position in any investment portfolio.
- To boost their sales further, Lucid Motors is heavily relying on the successful launch of the Gravity SUV in 2025, with the aim of delivering more than 665 units per month.
- In the world of finance, investing in Lucid Motors carries its own set of financial risks, given the company's status as a young start-up and its volatility in the stock market.
- In order to surpass the million EVs per year milestone by the end of the decade, Lucid Motors is planning to use their advanced EV technology and an upcoming midsize platform for both a sedan and a crossover, priced around $50,000.
- As the EV market is predicted to expand to 26% of the retail market by 2030, there is still potential for growth in the sector, presenting an opportunity for investors who are willing to weather the occasional bumps in the financial road.
