Title: Predicting Lucid Group's Stock Position in the Coming Year
Newcomer Lucid, known for its luxury electric vehicles (EVs), joined the public market in July 2021 after merging with a special purpose acquisition company (SPAC). BOOM! On its debut day, trading opened at an impressive $25.24, but the stock hit a rough patch, currently trading at around $2. Sigh.
Not everyone was thrilled, especially after Lucid failed to meet its production targets. What gave? Peter Rawlinson, Tesla's former chief vehicle engineer, led the charge, but like many SPAC-backed EV companies, Lucid fell short, only delivering 4,369 vehicles in 2022 and 6,001 in 2023. That's a far cry from its initial claims of delivering 20,000 and 49,000 vehicles in those respective years. Oops!
Supply chain constraints and macroeconomic woes were blamed, but Lucid's sluggish performance wasn't helped by price cuts. The EV market is crowded—and cooling down quickly. In a desperate bid to keep up with rivals, Lucid's bottom line suffered.
Revenue amounted to a paltry $595 million in 2023, a far cry from the $5.53 billion target it set pre-merger. Disappointing, right? Lucid expects to produce 9,000 vehicles in 2024, with analysts predicting a 29% increase in revenue to $767 million. But with a net loss of $2.95 billion, there's still a long way to go.
But fear not, Lucid faithful! The Saudi Arabian Public Investment Fund stepped in, snagging over 60% of Lucid's shares. Their financial backing also helped fund the construction of Lucid's Saudi Arabian plant, and the Saudi government even agreed to buy 100,000 Lucid vehicles over the next decade.
This infusion of support and capital gave Lucid the financial boost it needed. By the end of 2024, the company boasted $5.16 billion in total liquidity. To keep the momentum going, Lucid dove into a $1.75 billion capital raise in October, ensuring it's got that sweet, sweet cash to fuel operations well into 2026.
Lucid's got a few lofty goals for the next 12 months. They plan to boost the annual capacity of their AMP-1 plant in Arizona from 34,000 vehicles to an impressive 90,000, keeping their sights on 400,000 vehicles by 2028. They also promise to roll out a cheaper version of their Gravity SUV in late 2025, aiming to rival Tesla's Model X starting at $82,000. With an eye for global domination, Lucid is targeting a near-term goal of 155,000 vehicles at AMP-2 in Saudi Arabia.
Those ambitious production targets could result in significant revenue growth, with predictions of more than doubling to $1.74 billion in 2025, skyrocketing to $3.03 billion in 2026. At an enterprise value of $5.33 billion, Lucid may be undervalued, trading at 3 times next year's sales—much less than Tesla's 11 times.
But will Lucid's stock start climbing back to its record-breaking highs? There's still plenty of work to do before that happens. However, with financial backing, strategic partnerships, and a focus on technological innovation and affordability, Lucid is making moves in the right direction. Could this underdog finally prove its worth in the next 12 months? Stay tuned to find out!
Despite facing financial challenges and missing production targets, Lucid is actively seeking to turn its fortune around. To boost its financial position, the company secured a significant investment from the Saudi Arabian Public Investment Fund and conducted a capital raise. With these funds, Lucid aims to increase the capacity of its Arizona plant to 90,000 vehicles and expand in Saudi Arabia, ultimately targeting a production of 155,000 vehicles by 2028. This strategic expansion and focus on affordability, as demonstrated by the planned cheaper Gravity SUV, could potentially help Lucid's stock price rebound and regain its losses in the financial market. While there's still a long journey ahead, Lucid's investment in finance and strategy could prove crucial in its future success. Moreover, smart investing in Lucid's stock might yield promising returns if its growth strategies prove effective.
