- Lucid (NASDAQ:LCID) is issuing a large-scale vehicle recall
- According to the company, 1,117 Lucid Airs have a wiring harness problem
- So far, the recall news isn’t effecting LCID stock
Today, an electric vehicle (EV) producer is issuing a large recall — and it isn’t Tesla (NASDAQ:TSLA). Sector rival Lucid is recalling 1,117 Lucid Air EVs due to a deficiency with the wiring harness feature. Last month, the company began inspecting vehicles for harnesses with “insufficient clearance to the steering shaft.” But even as the company recalls vehicles, LCID stock is staying in the green.
LCID stock has been slightly rising today in spite of the news. That said, Lucid has traded poorly recently, falling almost 4% for the week.
News of a recall is never good. However, it hasn’t really pushed other EV stocks down before. Tesla has issued multiple recalls this year, none of which have weighed on shares for long.
Let’s take a closer look at what this recall means for Lucid.
What’s Happening with LCID Stock?
The number of Lucid Airs recalled may seem large at first glance. However, it’s actually only a small portion of the total vehicles inspected for the wiring problem. AutoEvolution reports the following:
“Of the said vehicles, approximately two percent suffered from below-spec clearance. Lucid established a clean point at the plant for vehicles with production dates beginning May 4th, implementing a temporary countermeasure to secure any excess harness length prior to installation.”
The Product Safety Working Group says this issue could lead to harness chafing. “The wires in question supply data to the display screens […] In case those wires get damaged, the vehicle would fail to comply with the requirements of a safety standard.” However, this still shouldn’t pose a huge hindrance to Lucid drivers.
Recalled vehicle owners can contact a Lucid technician for an in-person visit. If the vehicle is determined to have a harness with below-spec clearance, it will be quickly fixed for no cost. This isn’t quite as simple as Tesla’s over-the-air (OTA) solutions, but it isn’t likely to majorly inconvenience drivers either.
What It Means
What does this news mean for LCID stock? In short, not much. If vehicle recalls kept stocks down, TSLA stock would have a much worse trading year so far. Rather, recalls have become commonplace for the EV sector as names like Lucid pioneer innovative technology — tech that InvestorPlace analyst Luke Lango thinks could “unseat Tesla” as leader of the EV race.
Lucid has seen a difficult season, down about 10% for the past month. But for many experts, this period of decline is an opportunity to buy LCID stock. This company continues to succeed, even as the field becomes more crowded. Recently, it even ventured into Saudi Arabia, a market large untouched by U.S. EV producers.
On the date of publication, Samuel O’Brient 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.