Lucid Stock Warning: Steer Clear in the New Year
This wasn’t a blockbuster year for folks who invested in Lucid Group (NASDAQ:LCID) stock. The prospects for Lucid Group next year aren’t promising. The best grade we can give it is a “D” and we’re not recommending it for the new year. Lucid Group is testing its investors’ patience.
Stifel analyst Stephen Gengaro argued that Lucid is “two to four years away” from significantly ramping up the automaker’s production volume. Lucid stock is struggling and shareholders’ patience may not pay off in 2024. So, it’s probably not worth the time and effort to put Lucid Group on your watch list, and risking your hard-earned capital on this unprofitable EV startup should be out of the question.
Troubling News for LCID Stock Investors
The cavalcade of worrisome news items just never seems to stop for Lucid Group’s shareholders. We already mentioned that it will likely take years for Lucid to significantly ramp up its EV production pace.
We could add that Lucid Group only expects to produce 8,000 to 8,500 vehicles this year. Bear in mind, the automaker’s prior guidance had called for production of “more than 10,000” EVs in 2023.
Lucid stock investors faced multiple troubling developments recently. First, Lucid Group has been removed from the Nasdaq 100 index. It’s typically not a good sign when a company gets dropped from a major stock-market index.
Second, Needham analyst Chris Pearce lowered his rating on Lucid shares from “buy” to “hold.” Reportedly, the analyst cited weak demand for Lucid Group’s EVs.
More Issues for Lucid Group’s Shareholders to Consider
Lucid Group announced a top-level executive change on Dec. 11. Specifically, Chief Financial Officer Sherry House resigned after more than two years in the role.
Almost immediately, LCID stock fell 9% on the news of House’s resignation. It’s a tough blow to Lucid Group as the company attempts to navigate a fiercely competitive EV market.
In addition, according to a Reuters report, Lucid Group disclosed that the company has “assembled almost 800 cars in its Saudi Arabian factory since its opening.” That’s all fine and well, but Lucid has a complicated process for making those EVs.
Faisal Sultan, Lucid Group’s global vice-president, explained, “The car is fully built in Arizona… then it gets de-assembled… then the car gets shipped here as a kit, and that kit is then put back together.”
This sounds like it may be an expensive and time-consuming way to get vehicles built for sale. Only time will tell whether Lucid can turn a decent profit with this vehicle-production methodology.
Lucid Stock: Multiple Problems and Risks
After taking Lucid Group’s issues into consideration, the bullish argument for Lucid stock just doesn’t hold up. Ask yourself: Do I really need to invest in a problematic company like this?
Eventually, Lucid Group might prove to investors that it can successfully compete against the many EV makers out there. For the time being, however, LCID stock only gets a “D” grade and isn’t an ideal investment for 2024.
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.
