With the wild success of Tesla, everyone is looking for the next big electric car company to invest in. While several electric car companies have come and gone, Lucid Motors appears to be a company that may stick around.
The company has begun production and delivered a few hundred cars as of early 2022. The company is currently valued at about $30 billion as of May 13, 2022. If you’re interested in buying Lucid’s stock, here’s what you need to know.
|Company name||Lucid Group Inc|
|Founder(s)||Sam Weng and Bernard Tse|
|Number of employees||3,900|
|IPO date||July 26, 2021|
Lucid Motors was founded in 2007 by Sam Weng and Bernard Tse, a former Tesla executive, as Atieva. Initially, the company worked on providing battery technology for electric vehicle (EV) carmakers. In 2016, the company changed its name to Lucid Motors and began working on electric cars. It still uses the Atieva brand for some battery technology work, as well.
In 2019, Peter Rawlinson became CEO of the company. Rawlinson was the chief engineer of the Tesla Model S, which gave Lucid Motors a proven leader in the industry. Today, the company’s headquarters is located in Newark, California and the company employs roughly 3,900 people.
Lucid began producing the Lucid Air luxury sedan in 2021 and has delivered a few hundred vehicles as of the end of February 2022. Lucid is also working on a luxury SUV which they call Lucid Gravity. The SUV is expected to start sales in the summer of 2022.
Why do people want to invest in Lucid?
Investors may be interested in EV stocks such as Lucid because they’ve seen Tesla’s (TSLA) success story. People who got in early with Tesla received enormous returns if they held onto their stock. Tesla had an IPO price of $17 a share and closed at $704 per share as of June 3, 2022. Investors are hopeful that Lucid is the next electric vehicle maker success story.
Lucid is still in the early stages of its life as a company, though. While the company had started as a battery technology company in 2007, the company’s first production car rolled off the assembly line in 2021. As of early 2022, the company had just delivered a few hundred vehicles. This gives investors hope they can get in early enough to receive similar returns to Tesla's.
The company states it has reservations for 25,000 of their first vehicle, the Lucid Air, as of the end of February 2022. Production estimates for 2022 are in the 12,000 to 14,000 vehicle range, which has fallen from previous estimates.
In April 2022, Lucid announced a new version of its Lucid Air, the Lucid Air Grand Touring Performance, with higher horsepower and faster acceleration. The company also plans to add an SUV model, the Lucid Gravity, to its product line in the near future.
The company is currently valued at around $30 billion as of June 6, 2022. This is a fraction of Tesla’s current valuation of over $709 billion.
Current top shareholders of Lucid include:
- Public Investment Fund
- M. Klein & Co. LLC
- The Vanguard Group, Inc.
- Peter Rawlinson
- Venrock Associates
- Goldman Sachs & Co. LLC (Private Banking)
Reasons to invest in Lucid
People looking to invest in Lucid could find several reasons why the company is poised for success. The company falls firmly in the luxury automobile segment, which is projected to continue growing in the coming years. In 2018, this market segment had $496 billion in sales. This is expected to grow to $733 billion in sales in 2026.
The company is still in its infancy, with much room to potentially grow. Their beginnings as a battery technology company have helped the carmaker achieve the highest battery efficiency for its vehicle compared to Tesla, Jaguar, Porsche, Audi, and Rivian. This allows Lucid’s cars to get a longer range per battery charge.
The company already has 25,000 reservations for its Lucid Air vehicle. With an estimated production of 12,000 to 14,000 vehicles in 2022, this reservation backlog means there is a very good chance each vehicle produced will be immediately sold.
Lucid has opportunities to make money in ways other than by selling cars. It’s working on an energy storage system for home, commercial, and utility use. It can also supply other companies with technology it’s developed as another potential revenue source.
The company has a leadership team in place that has faced the challenges of a startup electric carmaker. Their CEO, Peter Rawlinson, served as the chief engineer for Tesla’s Model S electric car. Eric Bach, the company’s senior vice president of product and chief engineer, previously helped launch vehicles for Volkswagen AG and Tesla, as well.
Pros of buying Lucid stock
- Growing luxury vehicle market.
- Previous history as a battery technology company.
- Battery efficiency and range superiority.
- Reservation backlog.
- Can make money with batteries and technology in other ways.
- Leadership team experienced in successful electric cars.
Reasons to avoid Lucid
Lucid may be an electric car maker in a trendy and growing industry, but that doesn’t mean it’s necessarily a great investment. The manufacturer has only delivered a few hundred cars to customers as of the end of February 2022. On the other hand, Tesla has already produced well over 1 million vehicles, giving it a great advantage in the marketplace.
Tesla’s brand is well known. Many people can easily identify a Tesla car on the road. Lucid doesn’t have the same name recognition and isn't a household name. With only a few hundred cars on the road, most people haven’t even seen a Lucid car. If a consumer doesn’t know about a product, they can’t know they want to buy one.
The electric vehicle space is experiencing a lot of competition. In addition to Tesla and traditional automakers such as General Motors developing their own electric cars, several other startups are working on electric cars. Rivian, Fisker, Polestar, and NIO are some of the bigger names. Smaller names include VinFast, Canoo, Atlis, Faraday Future, Byton, Bollinger, and Lordstown Motors.
The company’s stock has had an interesting journey since merging to trade publicly through a SPAC. Lucid Group Inc’s stock history shows its stock reached a high of $57.75 toward the end of 2021. Since then, the stock’s price has plummeted. In May 2022, the Lucid stock price dipped as low as $13.25.
Other signs to consider are its earnings per share (EPS), which describe the company’s profit per outstanding share of stock. As of June 6, 2022, its EPS is -1.18, which means Lucid is losing money rather than making a profit.
Its price-to-earnings ratio, or P/E ratio, shows how much an investor will pay for $1 in earnings. Lucid’s P/E ratio for the past or trailing 12 months (TTM) is -16.15. Over the next 12 months, the P/E ratio is expected to be -14.30, which means that the company, and its investors, are likely to lose money.
For comparison, Rivian (RIVN), another start-up EV manufacturer, has an EPS of -26.71, a P/E ratio of -1.08, and a forward P/E of -4.78.
For some investors, these numbers could be reason to steer clear. Other investors might see them as an opportunity, especially after doing their due diligence and further researching Lucid and its potential.
Cons of buying Lucid stock
- Has only delivered a few hundred cars as of early 2022
- Must compete with Tesla and established traditional car makers building electric vehicles
- Not a household name
- Electric vehicle market experiencing a boom of new companies competing for sales
- Stock price hit a 52 week low in May 2022
How to buy Lucid Motors stock
Learning how to buy Lucid Motors stock is straightforward. First, you must have an account with a company that allows you to purchase stock. You could use a brokerage firm or an investing app to purchase shares of Lucid, depending on your preferences.
Traditionally, most people use brokerage firms to complete this process. People start by opening an account with a brokerage firm such as Vanguard, Fidelity, or Charles Schwab. Then, they deposit funds into the account and use those funds to place an order to buy Lucid stock. If you want to follow this model, you can check out our list of the best brokerage accounts.
Recently, investing apps have begun opening investing up to more people. These apps allow you to sign up without having a large initial deposit. Many of them allow you to buy parts of a share through a concept called fractional share investing. Most traditional brokerages require you to make purchases of stock in full shares.
To get started, open an account after downloading the app of your choice. Then, deposit funds and start making stock purchases. Examples of investing apps you may want to consider include Stash and Robinhood. If you want to start investing in Lucid through one of these apps, check out our list of best investment apps to find one that’s a good fit for you.
What is Lucid’s stock symbol?
Lucid Motor’s official company name is Lucid Group Inc. The company trades on the Nasdaq exchange under the stock ticker LCID.
How much is Lucid stock worth?
Lucid’s stock price closed at $18.67 on June 3, 2022. The company’s total market capitalization is roughly $30 billion.
How high will Lucid stock go?
No one can predict how high Lucid stock will go. Historically (as of May 16, 2021), the highest price Lucid’s stock has reached was $57.75. However, the stock trades much lower than that all-time high at the time of writing.
Should you invest in LCID stock? That’s a question only you can answer based on research, your risk tolerance, your financial position, and other factors.
If you’re learning how to invest money or just want an opinion based on your financial position, consider consulting a financial advisor. A financial advisor can look at your finances, help you formulate a financial plan, and determine if investing in Lucid should be part of that plan.
If you like the idea of investing in electric carmakers but don’t think Lucid is a good bet, you have other options. Traditional car manufacturers are beginning to work on electric vehicles. Tesla is a pioneer in the industry. Other smaller electric car companies also exist, such as NIO and Rivian. Research these companies before deciding if they’re a good fit for you.
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