Just a month ago, markets speculated enthusiastically that Lucid’s (LCID) big investor, Saudi Arabia’s Private Investment Fund (or PIF), would buy out shareholders. Rumors sent LCID stock briefly to $18 before it crashed lower.
After Lucid posted Q4/2022 results, the $10 support price broke down. The firm failed to meet delivery expectations. This sent Lordstown Motors (RIDE), Nio (NIO), Workhorse (WKHS), and Rivian (RIVN) lower. Tesla (TSLA), the EV leader, shares held up relatively well.
Selling premium EVs, then many mainstream vehicles, was Lucid’s business plan. When it produced only 3,493 vehicles in Q4 at its Arizona manufacturing facility, the 1,932 delivery further disappointed investors. Markets expected Lucid to deliver 2,831 units.
Lucid has 28,000 reservations. This represents over $2.7 billion in sales, assuming customers do not cancel orders. The recession is hurting consumer demand. Higher interest rates increase the cost of borrowing to buy the vehicle.
Lucid shareholders are suffering. Its revenue soared from $26.4 million last year to $257.7 million but the staggering $749.7 million is a major red flag. It warns investors to stay away.
The share count continued to balloon to 1.71 billion. Any small profit Lucid reports are quickly diluted.
Tesla is the reigning champion in the EV market. Lucid and the others will continue to struggle.