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LCID Stock Alert: Why Lucid Motors Is Down 9% Today

  • Lucid Motors (LCID) is declining alongside Tesla (TSLA), as the latter and LCID stock both hit 52-week lows.
  • There are worries about Tesla’s struggles, implying weakness for the electric vehicle space more broadly.
  • That said, Lucid recently raised more capital and is beginning to come through on deliveries.
LCID stock - LCID Stock Alert: Why Lucid Motors Is Down 9% Today

Source: Tada Images / Shutterstock

If anyone thought 2023 was going to be easier than 2022, the trade in electric vehicle (EV) stocks has proven otherwise. Tesla (NASDAQ:TSLA) is down more than 12% on Tuesday and hitting new 52-week lows, while Lucid Motors (NASDAQ:LCID) is under pressure too. Shares of LCID stock are down about 9% on the day and are making new annual lows as well — albeit, barely.

The current 52-week low of $6.14 came this afternoon, barely taking out the prior low of $6.18, which was set last week. That said, it’s been a horrendous ride for Lucid Motors stock. Shares are down 85% over the past year and 90.5% from the all-time high. The stock has now logged a new 52-week low in seven straight weeks.

The fall comes after Tesla delivered disappointing fourth-quarter delivery results. The company produced 439,701 vehicles and delivered more than 405,000 vehicles. However, the latter missed consensus estimates of 409,000 to 433,000 vehicles.

There are two ways of looking at this.

While Tesla did miss expectations, it still grew fourth-quarter deliveries 31% year over year. Further, full-year deliveries of 1.37 million grew 40% year over year. Both figures were record results.

That said, production notably outpaced deliveries, while logistical issues continue to create problems as well.

What’s Next for LCID Stock?

Some may be wondering why LCID stock is paying the price of Tesla’s issues, but that’s too narrow a view. The reality is Tesla is the face of the EV space.

Tesla is still growing production and deliveries, while churning out record results. However, there are worries that Tesla is struggling with demand, which is a worry the rest of the industry may be facing as well. Concerns of a recession don’t help matters.

Worse for the other EV players though, Tesla is actually on solid financial footing. It has solid margins, operating cash flow and plenty of cash. Not to mention its business can support itself. Many other EV companies cannot say the same thing.

There is a plus side for Lucid, which is that it recently raised $600 million in a secondary offering. That was alongside $900 million in a private offering to Saudi Arabia’s Public Investment Fund.

While Lucid Motors is not on as solid of financial footing as Tesla, it’s on better footing now. The company said it has the funds to produce enough vehicles through 2024. It also began deliveries of its Air model in Europe.

Although sales are starting to pick up, Lucid Motors still operates at a loss. Bulls hope its backlog will get the automaker through a recession, but clear risks still loom for LCID stock.

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.

Bret Kenwell is the manager and author of Future Blue Chips and is on Twitter @BretKenwell.

Article printed from InvestorPlace Media, https://investorplace.com/2023/01/lcid-stock-alert-why-lucid-motors-is-down-9-today/.

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