Lucid Group Inc (NASDAQ:LCID) has electric vehicle leader Tesla (NASDAQ:TSLA) in its sights. Mind you, Lucid has quite a way to go before Tesla is sweating. At this stage in the game, Lucid is just rolling out its first production EV, and the company has a market capitalization of around $40 billion. In comparison, Tesla released its first production EV in 2009. In August, its Model 3 became the first EV to sell over 1 million units. Tesla’s market cap is roughly $875 billion. Given the David and Goliath story here, is LCID stock even worth considering?
The contrast between companies make Lucid an interesting option for investors. Tesla is a mature company that has seen phenomenal growth. Today, TSLA stock opened at $873.72 a share. Given its value, the days of massive gains may be over. LCID stock went for just $24.85 per share at today’s open, and the company is in very early days. Dangerous territory, but also full of potential. And based on reviews of the Lucid Air — its first EV — Lucid has the potential to take on Tesla.
Improving on Tesla
You can’t have a conversation about Lucid’s ambition to better Tesla without talking about the elephant in the room. That would be Lucid CEO Peter Rawlinson. He just so happens to be a former Tesla vice president and the chief engineer for the Tesla Model S. Rawlinson has credibility, proven chops, and he knows the competition intimately. Lucid’s first release is the Lucid Air, a luxury sedan that is designed to beat the Tesla Model S in every way.
LCID stock value is largely being supported at this point by the fact that Lucid had 10,000 pre-orders for the luxury EV booked by June.
Lucid Air Garnering Killer Reviews, Tesla-Beating Range
Tesla’s Model S offers a maximum range of 412 miles on a charge and the base model starts at $91,190. The Lucid Air has a starting price of $77,400 and its maximum range is a whopping 520 miles. With both vehicles, you have to shell out extra for the extended range, but the Lucid Air is off to a good start by beating the class-leading Tesla Model S on both starting price and maximum range.
The news gets better for Lucid, now that reviews of the Lucid Air are beginning to arrive.
MotorTrend praised the Lucid Air’s design, while ripping on luxury EV rivals:
“The interior is another matter entirely. Wow. Whereas every Tesla since day one has seemingly shipped without a finished interior, Lucid not only crafted a perfectly wonderful luxury-car cabin, but it also smartly avoided the screens über alles aesthetic that plagues cars like the Mercedes EQS.”
Car and Driver’s verdict:
“The all-electric Lucid Air is a remarkable first effort from a first-time automaker, and the sizable sedan is also an excellent EV.”
Consumer Reports re-iterates the Lucid Air’s range advantage:
“When it comes to electric vehicles with really long ranges, there’s a new champion… In total, six Lucid vehicles beat the previous record-holder, the Tesla Model S Long Range, which has a range of 405 miles.”
Lucid Plans Include Targeting the Model 3
It’s sounding like Lucid has done an excellent job of targeting the Tesla Model S. However, the real threat to Tesla is what it will become when Lucid begins to take on the Tesla Model 3.
According to a Forbes interview with Peter Rawlinson, Lucid plans to hit 25,000 units per year of the Lucid in 2022. That would be followed by a crossover, tentatively named the Gravity in 2023. Phase two of the company’s production facility is currently under construction and when complete, will support volume of 90,000 vehicles per year. Phase three will take that to 400,000. High-volume, cheaper models aimed at the Model 3 would arrive within five years.
Bottom Line on LCID Stock
If you missed out on the huge TSLA stock gains over the past two years, LCID stock offers the opportunity for a do-over.
However, this Portfolio Grader “B” rated stock isn’t without risk. Production is only just beginning on the Lucid Air. The first cars off the assembly line were destined for reviewers and actual customer deliveries aren’t expected until later this month. That will be the test of how well the assembly line delivers in terms of volume and quality.
In addition, the circumstances are different now than during Tesla’s ascent. Tesla was practically the only game in town at a time when government policy and consumer environmental concern kicked off a surge in EV interest. In contrast, Lucid is making its entry into a market that is maturing and rapidly filling with competition — including from traditional automakers.
However, the potential is there and the early reviews of the Lucid Air are encouraging.
On the date of publication, neither Louis Navellier nor the InvestorPlace Research Staff member primarily responsible for this article held (either directly or indirectly) any positions in the securities mentioned in this article.
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