Like practically every publicly listed company, it’s possible to find good news about electric vehicle manufacturer Lucid Group (NASDAQ:LCID). Yet, Lucid Group’s problems outweigh any positive developments with the company. This isn’t the right time for investors to attempt a rescue mission with LCID stock.
There’s nothing wrong with Lucid Group sprucing up the appearance of some of its vehicles. As we’ll see, Lucid is trying out an intriguing exterior design concept that could entice some car shoppers.
Lucid Group has a lot of work to do in 2023, especially in terms of the automaker’s vehicle deliveries. It’s no secret that Lucid Group is a consistently unprofitable company with total debt in the billions of dollars. So, be sure to learn the facts before you decide whether to test-drive LCID stock.
| LCID | Lucid Group | $8.18 |
Lucid Group’s Good Intentions and Cool Cars
Don’t get the wrong idea here. No reasonable person (except maybe a short-seller) would want Lucid Group to fail. After all, the company wants to contribute to a cleaner Earth. Notably, Lucid Group joined the United Nations (UN) Global Compact, thereby demonstrating the automaker’s commitment to making transportation cleaner and more sustainable.
As for Lucid Group’s vehicles, there’s good news and bad news to report. The good news is that, at this year’s 2023 New York International Auto Show, Lucid Air was selected as the 2023 World Luxury Car of the Year. The bad news is that Lucid Group announced a recall on the automaker’s Lucid Air sedans because of power-loss risks.
Still, let’s see if we can stick to the positive news for a moment. Interestingly, Lucid Group just introduced the “Lucid Air with Stealth Appearance.” This isn’t in invisible car, if that’s what you were thinking.
Rather, it’s an “optional exterior design theme with a darker personality.” Supposedly, the Stealth Appearance design “will delight those who prefer a darker, more enigmatic look to Lucid Air,” Derek Jenkins, Senior Vice President of Design and Brand at Lucid Group.
Delivery Data Doesn’t Bode Well for LCID Stock
So, Lucid Group has some cool-looking cars that might appeal to certain automotive shoppers. That’s fine, but don’t assume that sleek, stealthy EVs will be enough to solve Lucid’s major problems.
As you may already be aware, Lucid Group is slashing its workforce by around 18%. That’s a huge cut, and it could take a toll on Lucid’s marketing efforts, development of new vehicle concepts, production speed and so on.
Besides, it’s just not an encouraging sign when a company lays off nearly one-fifth of its staff.
Along with that, Lucid Group’s investors might be concerned about the company’s deteriorating share price. Since late 2021, LCID stock has fallen relentlessly toward the $5 level.
When a stock goes below $5 and stays there, sometimes traders just throw in the towel and then a vicious cycle of capitulation ensues.
Finally, Lucid Group’s first-quarter 2023 operational data raised some red flags. The company produced 2,314 Air sedans during the quarter. Remember, the Air sedan is Lucid’s flagship vehicle model. Truthfully, 2,314 isn’t a number to get enthused about, since Lucid Group hopes to build 10,000 to 14,000 vehicles this year.
Even worse, Lucid Group only delivered 1,406 Air sedans during the first quarter. This figure falls short of Wall Street’s expectation of approximately 2,000. Lucid’s critics might point out that 1,406 delivered vehicles isn’t anything to brag about, compared to the 2,314 that Lucid Group produced. Lucid’s deliveries-to-production ratio of around 61% is less than stellar.
Don’t Count Expect LCID Stock to Make a Comeback
The Lucid Group share price has been on a downward trajectory for more than a year. That trend isn’t likely to reverse. Frankly, Lucid isn’t selling many vehicles and the company’s severe workforce cut is discouraging.
There are reasons to like Lucid Group if you’re a customer. The company has some cool-looking cars and is committed to cleaning up the planet. As a cautious investor, however, the best policy in 2023 is to stay away from LCID stock.
On the date of publication, neither Louis Navellier nor the InvestorPlace Research Staff member primarily responsible for this article held (either directly or indirectly) any positions in the securities mentioned in this article.
