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Should You Be Buying Lucid Stock?

Lucid Motors stock is hot at the moment but should you add it to your portfolio? Read on for a range of factors affecting the stock price and its future potential.

Lucid's stock has been one of the darlings of the wacky-but-influential Wall Street Bets since its February merger with SPAC Churchill Capital IV Corp. From a base of $10 the Reddit community helped power the stock to heights of nearly $65 before the price retreated to settle around the $20 mark.

Now, LCID seems to be back on the climb. Buoyed by general bullishness in the EV market and with experienced ex-Tesla Chief Engineer Peter Rawlinson at the helm, Lucid looks poised to maintain its successes and growth. The announcement of October's Lucid Rally, which celebrated the Air Dream Edition's first customer deliveries, pushed the stock to a $40 high. It's been hovering in the mid-thirties for the past week.

So now we're up to speed, should you invest? Here are the factors Lucid has working for and against it:

Promises Kept
Lucid has consistently kept its promises and hit its targets, making it all the more likely that the company will meet its goal of producing 20,000 vehicles in 2022 and generating $2 billion in revenue as a result. Current maximum production capacity at the Casa Grande, Arizona factory is 53,000 vehicles per year, 13,000 of which Lucid says are already reserved. That factory, by the way, is America's first facility built from a blank slate to produce EVs.

Lucid's Q3 earnings report will take place on November 15th and will reveal the number of additional reservations placed for Air sedans. Stay tuned to Torque News for that.

Another confidence-inspiring factor for Lucid is the technology built into the company's vehicles and the glowing reviews that the Air has been generating recently. It's here that I can hold back no more: time for the Tesla comparison.

David vs. Goliath?
Google anything about Lucid's stock and you'll inevitably see headlines that read "Is Lucid the Next Tesla?"

Whether it is or isn't, Tesla has a huge head start on Lucid and it'll be a long time before the latter will be able to compete with the former on revenue or production numbers. What we can do is compare the companies' offerings car-to-car, and it's here that Lucid shines.

With over 100 miles more range than the longest-range Model S, the Air is grabbing headlines for all the right reasons. Customers we reached out to from the Lucid Rally said they love the way the Air handles and drives, surely a good sign. On a product vs. product basis then, Lucid seems more than ready to take the fight to Tesla.

Image showing the fields of vision of the various sensors on the Lucid Air

Of course, it's not just Tesla that Lucid needs to contend with. Legacy automakers are jumping on the EV bandwagon and luxury EVs (Lucid's immediate niche) are appearing from Porsche, Audi, and Mercedes. Lucid's range outshines all its rivals for now, but the segment is filling rapidly.

There's also the obvious point that Lucid is quite far away from profitability, posting losses of $3.18 billion in the first half of 2021. That's to be expected, of course, but worth mentioning when you're deciding whether to invest or not.

Finally, there's the fact that Lucid isn't going to create its own charging infrastructure as Tesla has done with the Supercharger network. Instead, the company will rely on the ever-expanding network of third party charging stations across the country. That's fine for Lucid, as the Air can add 20 miles of range from a minute of charging, or 300 miles in 20 minutes, but it means that the company won't have access to the revenue stream that Tesla does by allowing other brands' EVs to fill up at Superchargers for a premium.

Buy it. It's a gamble, but it always is, and Lucid is meeting its deadlines with experienced people guiding the ship. Do you agree? Let me know in the comments below!

Images credit: Pixabay, Lucid

James Walker is an automotive journalist at Torque News focusing on Rivian and Lucid Motors electric vehicles. James is a car nut and journalist with experience in writing, filming, and presenting automotive shows and car reviews. Born in England before moving to Canada he loves twee little sports cars and thundering American Muscle in equal measure. He is also very excited to see what the EV revolution will bring us in terms of performance/driver's cars and everyday transport. Whether it's fast, slow, new, or old, James wants to poke around it and relay his findings in print and on video, ideally with some twisty roads or a track involved. You can follow James on Twitter, Instagram, and LinkedIn.

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