The stock is down 77% in the last five years. The S&P 500 is up 95% during the same period. The shares of its largest competitor are up 241%. The company has lost so many billions of dollars that it is hard to count them.
Key Points
Lucid Has Failed In The EV Business
The EV Industry Is Crowded
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The company is in what was once among America’s most forward-looking industries. That same industry is struggling today. The sector is also under siege from more successful companies in China.
In 2021, President Biden set a target for 50% of all vehicles sold to be EVs by 2030. In February, the number was under 8%. And, EV sales in the US are close to stagnant.
And, the US EV industry is crowded. Despite troubles, Tesla (NASDAQ: TSLA) still has nearly 50% of the market. Legacy car companies, which include GM and Ford, have bought their way to 7% market shares by spending billions of dollars on failed EV programs. Although Ford doesn’t like the math, at one point last year, it lost $125,000 on every EV it sold.
Ford (NYSE: F) has struggled with EVs so terribly that it has relaunched its initiative in the sector. The day of the announcement, the stock fell on lower than the average volume.
While Tesla’s stock is up 241% in the last five years, it is down 18% this year. Some of this is because CEO Elon Musk is a controversial figure. However, the more critical issue is that Tesla’s unit sales are down.
Lucid (NASDAQ: LCID) trades at $2.18 and is the worst $2 stock investors can buy on any equity market. It is down 31% this year, while the S&P 500 is 9% higher. According to Yahoo, the average price target among analysts who cover Lucid is $2.50. It traded at that level last month.
The Lucid stock price collapse was partly due to its cutting back its forecast of production for the year to a range of 18,000 to 20,000. Earlier in the year, management put the figure at 20,000. Interim CEO Marc Winterhoff tried to steady investors. He told CNBC, “I have never seen so many surprises within a year as this year. So all of those plans are still set up for where we were before, but we just want to be a little bit more cautious and, therefore, provide a range.” He was whistling past the graveyard.
Lucid posted an adjusted loss of $0.24 per share in the most recently reported quarter. Wall Street had expected $0.21. Revenue for the quarter was $259 million, compared to expectations of $280 million. The company’s net loss was $855 million, compared to $790 million in last year’s period. Lucid only delivered 3,309 vehicles in the quarter.
Investors did not seem to care that Uber would invest $300 million and plans to build 20,000 robotaxis in the next six years.
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