Amid a rough environment, electric vehicle (EV) manufacturer Lucid (NASDAQ:LCID) just unveiled a new capability enabling its models to charge other EVs. Still, although the innovative vehicle-to-vehicle (V2V) adapter — which will be available for purchase first for U.S. customers — expands Lucid’s utility, it hasn’t been enough to convince investors to bid up LCID stock today.
Earlier today, Lucid said that its V2V adapter — called RangeXchange — is enabled by the company’s Wunderbox bi-directional charging technology and proprietary software, which is already integrated into all Lucid Airs. Further, the process to charge another EV is intuitive, merely requiring the adapter and charging cable to be plugged directly into the receiving car.
Notably, RangeXchange represents Lucid’s “first application” of its Wunderbox technology solution. Per a press release, RangeXchange allows energy to flow from the Lucid Air’s battery pack to the receiving EV at a rate of up to 9.6 kilowatts. The amount of added range will depend “on the other vehicle’s energy efficiency as well as typical environmental factors.” The press also explains that, “for most EVs currently on the market in the U.S., a charge rate of 9.6 kW will add 24 to 40 miles per hour.”
That said, while this capability adds some fresh utility to Lucid EVs, LCID stock continues to suffer. Shares are down about 5% as of this writing.
LCID Stock Faces Significant Headwinds
On one level, management’s efforts to right the ship against an increasingly hostile backdrop are commendable. “RangeXchange is a small step to further enhance the everyday usability of the electric vehicle,” said Lucid CEO and Chief Technology Officer Peter Rawlinson. However, Wall Street is failing to have the same sentiment for LCID stock.
Predominantly, the EV sector is facing a severe credibility crisis right now. Starting late last year, sector pioneer Tesla (NASDAQ:TSLA) began cutting the prices of its EVs, sparking a war of attrition. As a result, several EV makers have fallen sharply, as the competition can’t afford to lose market share. Additionally, stubbornly high inflation and ballooning interest rates make already-expensive Lucid cars available to only an exclusive club.
Even worse, the pain has extended into the broader value chain, with lithium prices stumbling. Unfortunately, the implied lower material costs are failing to yield upside for LCID stock or other EV investments.
Pouring more salt on the wound, bi-directional charging solutions — while innovative and potentially useful for grid resilience — also carry a set of potential negatives. According to Semiconductor Engineering, one challenge with these solutions stems from possible battery lifespan reduction. Even more problematic, these solutions “can open the door to more cyberattacks.”
Why It Matters
Contrarian investors looking to buy LCID stock on the cheap should note that institutional traders appear to have written (sold) over 5,000 contracts of the Dec. 15 ’23 4.50 Put. Since buyers of this put are now in the money, the put writers may be forced to cover the position, which would likely have bearish implications.
On the date of publication, Josh Enomoto 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.
