If you’re tempted to invest in electric vehicle manufacturer Lucid Group (NASDAQ:LCID), you’d better do your research on the company first. You’ll find out that Lucid Group only delivered 6,001 vehicles in 2023, and that Lucid is a consistently unprofitable startup business. Our LCID stock analysis advises caution and recommends against buying shares currently.
Bear in mind, this is a time to be highly selective with your EV-industry investments. According to Reuters, “Growth in the global EV market is expected to slow to 27.1% this year from estimated growth of 29% in 2023.” Amid this challenging backdrop, Lucid stock gets an “F” grade and isn’t a confident pick for 2024.
LCID Stock Investors Shouldn’t Be Happy About This
As you may be aware, Lucid Group’s fourth-quarter 2023 vehicle production and deliveries declined on a year-over-year basis. Lucid slashed its full-year 2023 vehicle-production target in November.
There are other issues that we could point out, such as Lucid Group reportedly being removed from the Nasdaq 100 index. Plus, LCID stock fell 9% soon after Sherry House resigned as Lucid Group’s chief financial officer.
Overall, Lucid has experienced numerous problems and the company’s long-term shareholders have lost a great deal of wealth. Yet, Lucid Group board approved a $6 million cash bonus to the company’s chief executive, Peter Rawlinson.
Tesla (NASDAQ:TSLA) CEO Elon Musk reportedly opined that Rawlinson’s compensation is “inversely proportionate to performance.” Now, we’re not here to provide an editorial commentary on how much CEOs ought to be compensated.
Rather, we’re only observing that Rawlinson is getting a huge cash bonus even while Lucid Group isn’t profitable and isn’t producing or selling large numbers of vehicles. Moreover, investors who lost money on LCID stock may have strong feelings about Rawlinson’s hefty compensation.
Lucid Group’s Desperate Move to Sell More Vehicles
If an automaker lowers its vehicle prices once, that’s notable. Then, it’s becomes an unsettling pattern if the company reduces its vehicle prices multiple times.
As a Seeking Alpha report observed, Lucid Group just lowered its prices “on key electric vehicle models for the third time in just seven months.” There’s a pattern forming here, and it feels like Lucid is desperate to sell more EVs.
Here’s the kicker, though. Even after the series of price reductions, Lucid Group’s vehicles are still unaffordable for many Americans. According to Reuters, “The Air Pure rear-wheel drive now has a starting price of $69,900, while Air Touring is priced at $77,900 and Air Grand Touring at $109,900.”
The actual, out-the-door prices will be higher than those figures. When all is said and done, U.S. buyers will have to add “tax, title, license, options, destination and documentation fees.”
Lucid Group’s management tried to put a positive spin on these vehicle-price reductions. However, we encourage you to use your common sense. Lucid didn’t really want to enact several price reductions in seven months. An automaker would only do this if it’s not selling enough vehicles and feels the need to take immediate action.
LCID Stock Analysis: You Don’t Need to Risk Your Money on This
In a challenging EV-market environment, stock traders need to be highly selective. It’s hard to invest in Lucid Group with confidence, as the company clearly isn’t selling enough vehicles. Otherwise, why would the company slash its EV prices multiple times?
Some investors might be frustrated to discover that the Lucid Group CEO is getting a huge $6 million cash bonus. We’ll let you decide what to do with that information. For now, though, our LCID stock analysis indicates an unfavorable risk-to-reward balance, and we’re assigning the stock an “F” grade.
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.
