Lucid Group (NASDAQ:LCID) stock hasn’t had much of a year, giving up nearly 60% of its value.
While many investors think that the company is going nowhere, I believe it has strong potential to grow over the years. The company is expected to make losses until next year but if it manages to ramp up production, there is a lot of room to grow.
LCID stock was spiked to around $57 in November, but after its late-year tumble, it is starting to climb slowly back.
| LCID | Lucid Group | $16.60 |
A Closer Look at LCID Stock
The company introduced Lucid Financial Services, a digital platform that offers quick and convenient financing services including loan and lease options to the customers.
This program is available to U.S. customers who will take deliveries of Lucid Air Grand Touring models.
It will be extended to other customers in the latter part of the year.
It might not have an immediate effect on LCID stock, but this move will increase the trust and loyalty of customers. By offering a one-stop solution the plan will reduce buyer anxiety. It is also a great way of offering personalized services to assist customers in their purchases.
The company is only making it easier to own Lucid Air.
There Is Demand for Lucid Cars
Lucid was a prominent guest at Electrify expo where it showcased the Lucid Air Grand Touring vehicle. Boasting the longest range in the industry, there is a lot of optimism surrounding the car both from within the company and without.
The demand looks healthy and is constantly growing. Lucid already has 30,000 reservations for Air Sedan. Even if only half of the reservations convert into actual buys, the revenue will be massive. That said, it also has solid support from Saudi Arabia which will give a much-needed push to the company.
If the EV maker can manage to honor deliveries without any delays, it can build a solid position in the EV industry.
The Bottom Line
While the market is not confident about LCID stock meeting the production guidance, there is more to look out for.
China’s lockdowns have affected the supply chain for some time now but as the country prepares to ease lockdowns and extend subsidies to EV makers, Lucid could stand to benefit.
Even though I am not confident about the company meeting the target of 12,000 deliveries since it has delivered fewer than 1,000 cars in the first quarter, the bigger picture still looks attractive.
Supply chain issues will be a bottleneck of the entire industry and how Lucid tackles it will reflect its potential to meet the projections. LCID stock is trading in the same range as rival Nio (NYSE:NIO) but the upside potential for Lucid is much higher.
Lucid is still in the growth stage and there is ample upside from here. Buy LCID stock below $20.
On the date of publication, Vandita Jadeja 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.
