The electric vehicle (EV) market seems primed for an exciting year as the trend of vehicle electrification powers forward. Today, Lucid (NASDAQ:LCID) is in the spotlight after the company’s official Twitter (NYSE:TWTR) account made an exciting announcement. To recap, LCID stock became a publicly trade company last year after merging with special purpose acquisition company (SPAC) Churchill Capital IV. The company topped off its debut trading year by joining the Nasdaq-100 and winning MotorTrend’s Car of the Year award with its Lucid Air model.
So, what was this exciting announcement?
Lucid announced via Twitter that “Expansion to European markets will begin this year. Stay tuned for country-specific delivery information.” No further details were released at the time.
Despite the announcement, shares of LCID stock are in the red today. Furthermore, shares of LCID stock have declined by more than 16% the past month. While there is no company-specific news to explain the decline in price, high-growth technology stocks have been hammered in 2022 so far. Investors may be retreating to safer, more profitable and lower duration names amid a tightening in tapering. The Fed also announced that it expects up to three rate hikes during 2022 to combat inflation.
The Bottom Line on LCID Stock
While the European expansion news is certainly positive for shareholders, Lucid still has a lot to prove. The EV company last reported that it had 17,000 reservations for its Lucid Air model, up from 11,000 in July. Looking forward, Lucid forecasts that it can deliver up to 250,000 per year by 2026. Meanwhile, Lucid’s current production facilities can only produce 34,00o cars per year, which means that Lucid has to aggressively expand its output in order to reach its goal. Lucid is currently working to expand its AMP-1 facility, which is estimated to produce 90,000 vehicles per year by 2023. New and expanded facilities will equate to expenses in the short term, which may be a headwind for LCID stock.
However, CEO Peter Rawlinson seems prepared to take on these challenges. He explained, “We see significant demand for the award-winning Lucid Air, with accelerating reservations as we ramp production at our factory in Arizona. We remain confident in our ability to achieve 20,000 units in 2022.”
On the date of publication, Eddie Pan 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.