Lucid Motors Is Finally Ready to Reward the Patient Investor

Investors in electric vehicle manufacturer Lucid Motors (NASDAQ:LCID) stock have been waiting for this moment for several years.

Exterior of Lucid Motors (LCID) building
Source: gg5795 / Shutterstock.com

The company’s first customer-quality Lucid Air sedan has rolled off the production line at its facility in Arizona. Deliveries are now weeks away. Hence, it is time for the company to deliver on growth prospects for years in the making.

Originally, we were supposed to see cars rolling off the production line in early 2019. However, the company couldn’t stick to the timeline as a result of external factors like pandemics and internal considerations.

Investors balked, and shares suffered badly. However, now that the grunt work is over, the stock is set to gain handsomely.

Whether you are a day trader or a long-term investor, it will pay to keep this one in your portfolio for the foreseeable future.

Lucid Motors has revealed that it now has over 13,000 reservations for the Lucid Air. The luxury sedan starts at $77,000 and can go up to 520 miles on a full charge. With such long-range versions available, drivers will have no problem beating any distance records set by Tesla Model S Plaid+, which comes with a 500-mile range.

The new model looks like other cars but drives entirely unlike and, offering more space inside than most vehicles without the worry surrounding gas prices going up again tomorrow morning.

In the wake of Lucid’s recent announcement that customer vehicles are now rolling off the factory production line, they must live up to this immense hype.

The Air Sedan is a high-end vehicle with impressive specs, and investors hope it will set them apart in the luxury EV market. However, with so much growth already priced for these cars, the company will need to deliver blockbuster delivery numbers to maintain momentum.

That has happened with companies like XPeng (NYSE:XPEV) and Nio (NYSE:NIO), which have blown past analyst estimates multiple times and keep on beating their delivery records.

Why Is LCID Stock Soaring?

The last month has been good for LCID stock with shares up more than 20%. You can chalk that up to a couple of major announcements.

First, Lucid Air got a rating of 520 miles of range from the Environmental Protection Agency (EPA). This beats out Tesla’s Model S Plaid by 100+ miles.

Interestingly, it sets up an epic battle for bragging rights in the EV space. Lucid Air Dream Edition cars are now rolling off the production line, packed full of high-tech features including facial recognition for security purposes.

In a CNBC interview, Lucid CEO Peter Rawlinson revealed the goal is to manufacture and deliver at least 20,000 Lucid Air sedans by 2022. These announcements and the general euphoria surrounding the company’s production schedule combine to feed the price momentum.

Several important catalysts can push the price of LCID stock upward in the coming weeks and months.

Lucid Motors opened its Arizona manufacturing facility for a “Production Preview Week at AMP-1.” The event shed light on the current progress with Air sedan production.

Meanwhile, financial resources at its disposal will last until 2022. Manufacturing EVs is not cheap, and in the future, the company will have to tap the equity markets for funds. However, the existing cash on hand should pacify investors.

Finally, Lucid has plans to open 20 retail and service locations by the end of this year. That will help improve brand awareness. Lucid is still a newbie and is competing against perhaps the most well-known brand in the world, Tesla. It needs to invest heavily in its brand to ensure long-term success.

Considering all of these positive catalysts, it’s no surprise the stock is a hot ticket at the moment.

On the publication date, Faizan Farooque did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Faizan Farooque is a contributing author for InvestorPlace.com and numerous other financial sites. Faizan has several years of experience in analyzing the stock market and was a former data journalist at S&P Global Market Intelligence. His passion is to help the average investor make more informed decisions regarding their portfolio. Faizan does not directly own the securities mentioned above.


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