Shares of electric vehicle (EV) manufacturer Lucid Group (NASDAQ:LCID) — which does business under Lucid Motors — jumped slightly higher on Monday. Late last week, the premium EV specialist settled a trademark dispute with charging equipment manufacturer Gravity. With at least one distraction out of the way for LCID stock, management can concentrate on competing in a hotly contested arena.
Fundamentally, the issue centered on impinging on a preexisting trademark. Lucid intends to launch a new luxury SUV called the Gravity. According to the company’s website, the Gravity will feature a range of up to 440 miles. It also offers seating for seven, and with over 800 horsepower, the SUV can launch itself to 60 miles per hour from a standstill in under 3.5 seconds.
However, the EV maker’s use of “Lucid Gravity” clashed with Gravity’s own brand identity. Adding to the confusion, Gravity, the company, specializes in EV charging equipment. Therefore, the two entities operate in similar fields.
However, as Matt Everitt, general counsel at Lucid pointed out, the two companies reached an agreement. Gravity CEO Moshe Cohen stated that the matter was handled “amicably.” Therefore, it’s one potential distraction that investors of LCID stock don’t have to worry about.
LCID Stock Still Faces a Challenging Road Ahead
Trademark disputes typically represent tricky circumstances to decipher. As Gouchev Law pointed out, some clear violations exist. However, it’s also possible to file suit if a competitor uses words or phrases that, while not identical to a specific trademark, may spark a “likelihood of confusion.” With LCID stock being an investment in an EV company and with Gravity being an EV charging specialist, the potential for confusion was quite apparent.
With the dispute settled, Lucid can move ahead with its Gravity SUV. However, the company still faces a challenging road ahead. In particular, industry experts will likely monitor Gravity’s pricing and consumer response.
KBB points out that the Gravity will feature a starting price of less than $80,000. That puts it on par with the Tesla (NASDAQ:TSLA) Model X and the Rivian (NASDAQ:RIVN) R1S. However, as the sector price war demonstrated, EV manufacturers are attempting to address the middle-income consumer. Therefore, LCID stock represents a contrarian investment.
That’s not necessarily a bad thing, as affluent buyers will likely be able to make the transition to electric mobility in a smoother fashion due to the income-homeownership correlation. EV drivers that own their homes should have access to home-charging solutions.
However, the price war itself demonstrates that even affluent consumers are shunning EVs. It’s a tough balancing act that will make life interesting for LCID stock.
On the date of publication, Josh Enomoto 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.
On the date of publication, the responsible editor did not have (either directly or indirectly) any positions in the securities mentioned in this article.
