It’s been a very tough run for Lucid (NASDAQ:LCID) this year, particularly lately. LCID stock has been beaten down, falling in four straight sessions. The stock has also declined in six of the last seven weeks, dropping about 50% in that stretch.
The trend has been painfully to the downside. Shares are working on their fourth monthly decline in the last five months, with the one “up month” — October — sporting a gain of just 2.3%. Lastly, LCID stock has made a new 52-week low in 15 out of the last 18 trading sessions.
I don’t say all of this to kick the bulls when they’re down. I say it to emphasize what the trend has been and the dangers that lurk for those that blindly buy and hope the stock comes back to life.
That’s even as Lucid has positives going for it. Most recently, that’s on reports that the stock is looking to break into the Chinese EV market.
Despite the news though, the trend continues to dominate. Shares of Lucid are down about 2.2% on the day. It’s joined by others too, as Tesla (NASDAQ:TSLA) made new 52-week lows in the session. Rivian (NASDAQ:RIVN) is hitting its lowest level since May, down about 2.5% on the day as well.
Does China Matter for LCID Stock?
Entering China could be a big positive for Lucid. However, there are concerns.
While Nio (NYSE:NIO), Li Auto (NASDAQ:LI) and others continue to generate strong production results out of China and businesses may be reopening from strict Covid-19 policies, it’s not as easy as waltzing in and setting up shop. Producing cars is an expensive endeavor.
As if that weren’t enough of a hurdle, there are already plenty of producers in China that have strong momentum and customer loyalty. That’s not to say Lucid can’t succeed, only that it will be a difficult road to travel — particularly when it already operates at a loss as we face an increasingly likely global recession.
While it will be a while before Lucid begins those operations, it has begun looking to hire in the country. Although China could present long-term growth opportunities for Lucid, it won’t be an immediate boost. It will likely be a short-term negative and a long-term positive. Perhaps some of those concerns are why shares are again making new lows on the day.
On the date of publication, Bret Kenwell 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.
