Shares of Electric Car Makers: Lucid Group Displaces Tesla from Pedestal
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The fastest business class electric car is manufactured by Lucid Group (NASDAQ: LCID). The car that can cover the longest distance on one charge is also a car of Lucid Group. The car that charges faster than any other is also a Lucid Group car.
A Lucid Group electric car beats all records set by Tesla (NASDAQ: TSLA). What is this company, is it worth investing in, and what are its differences with Tesla?
Lucid Group
Lucid Group Inc. was founded in 2007 and was initially called Atieva. The company specialized in batteries and powertrain for electric cars.
Things changed in 2013, when Peter Rawlinson became a technical director of Lucid Group. Earlier, he used to be a vice president of engineering in Tesla. He was disappointed by his former job and was eager to create an electric car that would surpass electric cars by Tesla in all ways.
Seems like his dreams are beginning to come true. Electric cars by Lucid are gradually displacing Tesla from its pedestal, while Rawlinson has become director-general in Lucid Group. The problem to solve is the high price of their products.
First electric cars by Lucid and Tesla
On October 28th, first serial cars Lucid Air Dream Edition Performance and Lucid Air Dream Edition Range were off the assembly line of Lucid AMP-1 Factory. They cost over 160,000 USD.
For comparison, the first serial car by Tesla – Tesla Roadster – cost from 100,000 USD, and this was in 2008. The next serial car was Tesla Model S that cost 75,000 USD. And just 10 years later the company managed to manufacture Tesla Model 3 that cost from 35,000 USD.
Hence, the high price of the first electric cars by Lucid is quite and expectable and logical event because they spend huge money on designing them.
Who financed the construction of Lucid AMP-1 Factory?
To make electric cars cheaper, manufacturers need to improve already existing technologies and have decent electric powers. For this, Lucid Group started gathering money for buikding their own plant. In 2019, the company managed to get financed by the State Investment fund of Saudi Arabia. The fund gave 1 billion USD.
By 2020, the initial stage of the construction was over, and on September 28th, 2021 first cars were off the assembly belt. After all works on the plant are complete, the power is going to reach 400,000electric cars a year. Experts are optimistic about the company and note that this is a good workplace for beginner engineers.
Now Lucid employs experts from such companies as Apple (NASDAQ: AAPL), Alphabet Inc. (NASDAQ: GOOG), Boeing Company (NYSE: BA), and other successful tech companies.
Ambitions of Peter Rawlinson
Peter Rawlinson decided to make his company better than Tesla not only in terms of tech characteristics but also in terms of prices. His aim is an electric car that will cost 25,000 USD, i.e. cheaper than Tesla Model 3. Rawlinson is, indeed, like a bone in Elon Musk’s throat.
After Lucid presented technical characteristics of its electric car Lucid Air, and it turned out more powerful than the most powerful electric car by Tesla, Musk’s company announced it started accepting applications for the new Tesla Model S Plaid. This electric car is to be faster than Lucid Air and run farther on one charge.
After Lucid announced that the base cost of its Lucid Air was 77,000 USD, on the next day Elon Musk decreased the initial price of Tesla Model S by 5,500 USD.
And now Rawlinson says they can design an electric car that costs 25,000 USD. Immediately, we hear that Tesla starts working on Tesla Model 2 that will cost about 25,000 USD.
I do not think tat Musk reacted in any similar way to the activity on NIO (NYSE: NIO) that was nicknamed “Killer of Tesla”.
Price of electric cars and Formula E decreases
Director-general Lucid states that other electric car makers focused on batteries in their attempts to make their electric cars cheaper, while his approach is to work on efficacy and charge. The confirmation is Lucid Air that can cover 517 miles (about 832 km). This was reached by improving aerodynamics, consolidation of details, and new battery technologies.
The tech power of the company is also proved by the fact that Lucid designs batteries for cars participating in the Formula E race. While previously electric cars had to change batteries to arrive at the finish line, Lucid created a battery that allowed finishing the race on one charge.
Looks like Elon Musk quite fairly worries about rivalry with Lucid. This means the latter company is promising, and its shares can be a long-term investment option.
Lucid Group electric cars
Currently, Lucid Group can offer 5 models of Lucid Air to customers:
- Dream Edition Range
- Dream Edition Performance
- Grand Touring
- Touring
- Pure
The price of the cheapest Lucid Air model starts from 77,000 USD. The company plans to create a 7-seater SUV, Lucid Gravity. Its starting price is 85,000 USD, while a fully equipped vehicle will cost over 180,000 USD.
So, the company actually has one electric car, and based on it, they plan to create Lucid Gravity. At the current stage, Lucid Group has designed a technology for manufacturing electric cars and is beginning to develop new models.
Is Lucid Group becoming public?
At the beginning of 2021 by merging with a SPAC Churchill Capital Group IV. Investors had kept a close eye on Lucid Group, and just rumors about the possible merger made the shares of Churchill Capital Group IV grow abruptly. Over a couple of days, the share price doubled, and over a month, their profitability grew by 450%.
A the beginning of 2021, the merger of Lucid and Churchill Capital Group IV became the largest trade between a SPAC and an electric car maker. Now Lucid shares are trading in NASDAQ under the ticker LCID.
After the merger happened, volatility in the shares started going down, and the share price dropped to 20 USD.
Then, as it often happens, the company announced the dates when first electric cars will start selling, but for various reasons, the date was postponed several times. This caused negative attitude of investors, and even rumors spread that Lucid actually had no technology, like previously Nikola Corp (NASDAQ: NKLA).
However, on October 28th, 2021, things changed. First Lucid Air electric cars were off the assembly line, and the share price of the company leaped up by 25%. Then a natural correction followed but it lasted just two days. Market participants try to get the shares as fast as possible until the price returns to its all-time high of 65 USD.
With all the agitation, the price behavior is hard to forecast. The price might go on sky-rocketing, and by the time this article is published, the shares might have grown by 50% more.
Closing thoughts
Nowadays it is important to realize that the main rival of Tesla is not NIO, it is Lucid Group. It has just made the first electric car but it already makes Elon Musk nervous.
So, buying the shares now, investors count on their long-term growth. Hence, if there will be any corrections in Lucid Group shares, this will be a good chance to invest in the company at lower prices.
