Since reporting earnings on Feb. 28, Lucid (NASDAQ:LCID) stock has declined by more than 10%. Why? The earnings report was overshadowed by a decrease in estimated 2022 production. Previously, the electric vehicle (EV) company had provided 2022 production guidance of 20,000 vehicles, but the figure fell to between 12,000 and 14,000 vehicles in the report. Lucid attributed the decreased production estimate to “extraordinary supply chain and logistics challenges.” As of Feb. 28, Lucid has produced 400 vehicles and delivered 300 of them.
With that in mind, let’s jump into some of the top Lucid headlines investors should be watching this week. This week, the top headlines include more news on supply-chain issues as well as a new studio, among other things.
Here’s what investors should know.
LCID Stock News: Top Headlines of the Week
Lucid announces a new studio and free charging in Canada
This week, Lucid announced that it will be opening a new studio in Toronto, which will be the company’s second in Canada. After the new studio, Lucid will have 23 studios across North America.
In addition, Lucid announced a collaboration with Electrify Canada to provide two complementary years of free charging. The free charging is available to Canadian customers who reserve a Lucid Air by June 30. Deliveries of the Lucid Air in Canada are expected to begin this spring. Electrify currently provides 150 and 350 kilowatt (kW) charging through its 120 individual chargers in Canada. By 2026, the company expects to operate over 500 individual chargers across the country.
Will a spike in gas prices increase EV demand?
Gas prices have soared in recent weeks as a result of Russia’s invasion of Ukraine. As a result, many investors are speculating that the demand for EVs will spike. However, this may not exactly be the case. CNBC reports that many customers hoping to switch to EVs may be “out of luck.” This is because the ongoing supply-chain issues, inventory shortages and existing demand for EVs have already made it difficult for customers to acquire them.
CNBC also adds that industry experts “don’t foresee gas prices, even at record levels, spurring long-term changes in what Americans decide to drive.” Higher gas prices are more likely to change the amount and distance people drive.
Supply-chain challenges threaten Lucid’s production goals
Lucid’s supply-chain issues really came to light back when the company lowered its 2022 production guidance. Now, the big question remains: how long will these issues last for LCID stock? To answer this question, it’s helpful to look at how the company’s peers are dealing with the same challenges.
Last week, Nio (NYSE:NIO) reported earnings that were highlighted by weak first-quarter guidance. Analysts had expected Q1 deliveries of 27,958 vehicles, but Nio reported that it expects 25,000 to 26,000 vehicles. That decreased guidance was a result of supply-chain issues and other headwinds. Nio’s guidance may mean further weakness for Lucid’s production goal.
Last Friday, General Motors (NYSE:GM) also reported that it would be pausing production efforts at its Fort Wayne assembly plant for a week. GM explained: “There is still uncertainty and unpredictability in the semiconductor supply base, and we are actively working with our suppliers to mitigate potential issues moving forward.” However, GM also said that semiconductor supply has been better in Q1 “compared to last year as a whole.” As a result, GM has improved its production and delivery process during 2022 so far. That bodes well for other automakers.
On the date of publication, Eddie Pan did not hold (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.
