In the first half of this year, global electric vehicle sales increased by 168% compared to the same time frame in 2020. The level of sales growth has made investors excited about EV stocks. It was part of the reason why the stock rose in 2021.
The stock of Lucid Group has risen in the last six months. In just six months, the amount of money invested in Lucid stock would have become more than $13,000. Can Lucid stock generate similar returns over the long term? Let's talk about that next.
The image is from the Lucid Group.
The growth plans of Lucid.
After delivering a market-leading range, Lucid's next challenge is to ramp up production. The company's manufacturing facility in Casa Grande, Arizona, has an initial capacity of 34,000 vehicles a year. That's enough to produce 20,000 vehicles. The facility's capacity can be increased to 365,000 units. That's more than the 50,000 vehicle deliveries planned by Lucid.
In the long term, Lucid wants to deliver 500,000 units annually. Lower-priced models are a key part of the growth strategy.
It could easily achieve a range of 300 miles or more with a much smaller battery pack, as it could achieve 516 miles with just 112kWh of battery pack. That would make it suitable for mass markets. The range of 300-plus miles is something most EV models offer. The company plans to enter Europe and the Middle East in 2022.
The Pure version of Lucid Air will be launched next year. The Grand Touring starts at $139,000, but the Pure and Touring versions are more affordable at $95,000 and $77,400, respectively. The luxury SUV, Gravity, is expected to start production in 2023. The company has a growth plan for the next several years.
Is the stock a good buy?
The valuation of its stock can't be compared to that of Lucid and its cars. Ford has a capital of $90 billion, but it is just a little less than that of General GM.
The LCID Market Cap is calculated by YCharts.
Rivian, which has a market cap of more than $100 billion, has delivered just 156 vehicles as of October 31. The stocks seem to have a lot of room to run, if we compare their valuations to that ofTesla. The first company to make electric vehicles mainstream wasTesla. Electric vehicle space is more competitive. EV start-ups, as well as legacy carmakers, are looking to capture a part of the EV pie.
That is not to say that all start-ups are doomed. Companies that can deliver technologically better products at competitive prices are more likely to succeed. The balance of a strong offering and buzz to attract potential buyers seems to have been achieved by Lucid. Customers would like to be associated with the brand. The company has a lot to deliver, but it had the right start.
The above should bode well for the stock. I don't think Lucid will generate returns likeTesla, but I think it has the potential to generate market-beating returns over the long term.
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