It has not been a simple run for progress shares recently. Excluding Tesla (NASDAQ:TSLA), it has additionally been a troublesome experience for electric vehicle (EV) makers like Lucid Motors (NASDAQ:LCID). From the 52-week excessive, LCID inventory is now down virtually 62% because it languishes close to final month’s low of $20.49. The inventory didn’t reply nicely to the corporate’s earnings report that released on Feb. 28. Non-GAAP earnings had been in-line, however GAAP earnings had been a miss. Whereas income grew greater than 600% yr over yr as the corporate now has deliveries, it got here in considerably beneath analysts’ expectations.
As you will have guessed, manufacturing and deliveries have been a perpetrator to the decline in LCID inventory value. Sadly, the corporate needed to reduce its 2022 manufacturing numbers from its predicted 20,000 autos right down to a variety of 12,000 to 14,000 autos. Lucid’s chief executive officer stated, “This displays the extraordinary provide chain and logistics challenges we’ve encountered and our unrelenting deal with delivering the highest-quality merchandise.”
To assist with its provide chain points, the corporate lately introduced plans for a brand new battery plant. LG Vitality Options shall be investing $1.4 billion to construct a battery manufacturing facility in Queen Creek, Arizona — inside an hours drive from Lucid’s manufacturing plant in Casa Grande, Arizona. Lucid hopes this transfer will assist its long-term progress. By 2030, the corporate plans to have the Arizona manufacturing unit producing 500,000 EVs annually.
Together with its promising EV know-how, traders proceed to surprise if Lucid can grow to be the following Tesla. It’s not that Lucid can’t be Tesla-like sooner or later in the case of manufacturing. Nonetheless, many non-Tesla supporters fail to separate among the issues that make Tesla distinctive. For starters, it has Elon Musk, who appears to hold a premium with him. Second, the corporate has a complete vitality enterprise to contemplate, alongside an EV-leading manufacturing setup. It has quite a few areas around the globe in North America, China and Europe.
So, can Lucid get there from an automotive perspective? After all it may possibly — finally. However manufacturing delays are part of life for automakers and Lucid Motors is working by these points now. Actually, vital points.
It might want to stabilize its manufacturing plans to begin engaged on “being the following Tesla.” Manufacturing will increase and stabilization can be a terrific begin for LCID inventory’s future to go nicely. Nonetheless, it additionally wants the bear market in progress and EV shares to return to an finish earlier than it may possibly discover sustainable upside momentum.
On the date of publication, Bret Kenwell didn’t have (both immediately or not directly) any positions within the securities talked about on this article. The opinions expressed on this article are these of the author, topic to the InvestorPlace.com Publishing Guidelines.