It seems that the overheated enthusiasm surrounding electric-vehicle stocks has cooled off in 2021. A case in point would be Lucid Motors (NASDAQ:LCID), as the performance of LCID stock may have disappointed some eager investors.
Lucid Motors’ flagship automobile, known as the Lucid Air, stands out from other electric vehicles. It’s a futuristic-looking luxury sedan which features a California-inspired design and race-proven automotive technology.
If you’re going to buy LCID stock and stay the course, you’ll need two things: an open mind and a whole lot of patience.
Therefore, this stock isn’t for everybody. Yet, if you have what it takes to invest in Lucid Motors, I invite you to hold on for a ride that won’t always be smooth, but will always be interesting.
A Closer Look at LCID Stock
Not long ago, I covered a special purpose acquisition company (SPAC) known as Churchill Capital IV, which traded as CCIV stock. That company’s purpose was to bring Lucid Motors to the markets.
CCIV stock cost around $10 in 2020 before the merger deal was announced. After the announcement, however, the share price rocketed to a 52-week high of $64.86 in February 2021.
That rally was too much, too fast. Unfortunately, the price chasers got punished as CCIV stock quickly deflated to the $20 area.
Fast-forward to July 26, as that was the day when Churchill became Lucid.
Perhaps due to a renewed sense of excitement, the stock closed at $26.83 on its first day of public trading. That represented a very quick 11% gain.
Since that day, the stock’s price action hasn’t been particularly exciting. Today Lucid’s stock is hovering slightly below $23.
Incidentally, it’s possible that the Reddit short-squeeze mob could force Lucid’s shares to rally.
However, I feel that it’s more important for investors to believe in the company itself, rather than sit around and hope for an epic short squeeze.
Staying on Track
So why should prospective shareholders have faith in Lucid Motors?
According to CEO Peter Rawlinson, investors should believe in the automaker because it’s on target to meet its production targets.
These goals include producing 577 vehicles this year and up to 20,000 vehicles next year.
That’s why 2022 will likely be the breakout year for LCID stock, rather than 2021.
Those expectations are ambitious, to say the least. Reportedly, Lucid Motors expects revenues of $2.2 billion next year and a whopping $22.8 billion of sales in 2026.
At that point, Lucid Motors expects to sell 250,000 automobiles annually, while earning around $3 billion of profits and generating $1.5 billion of free cash flow.
The Next Tesla?
When it comes to buzz-worthy electric vehicle companies, you can’t get any bigger or more famous than Tesla (NASDAQ:TSLA).
And while Lucid Motors isn’t nearly as big or as production-ready as Tesla, Lucid’s CEO seems to suggest that the two automakers are comparable.
According to InvestorPlace contributor Chris MacDonald, Rawlinson recently discussed the large extent to which government support for the electric-vehicle sector drove Tesla’s successful performance.
“Without that [funding], the Model S would have never happened … Tesla probably wouldn’t exist today. Really, the U.S. government made Tesla the success that it is today. That is a hell of an achievement,” Rawlinson asserted.
I don’t know about you, but I’m going to interpret that statement as a hint that the U.S. infrastructure bill could help take Lucid Motors to the next level.
Or at the very least, it’s a suggestion that Lucid Motors could follow in the sizable footsteps of its rival, Tesla. That would be an impressive feat, if it happens.
The Bottom Line
Admittedly, the recent performance of LCID stock hasn’t been inspiring.
However, the story isn’t fully written yet.
The CEO of Lucid Motors is clearly ambitious and confident. The automaker’s loyal shareholders may feel the same way, as 2022 could be the company’s most important year.
On the date of publication, David Moadel 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.
