Could Lucid shares rise after Q3 results?
The Lucid share price hit a high of $55 last Friday, after reporting encouraging Q3 results. Its first car, the Lucid Air, just won ‘MotorTrend Car of the Year,’ and production is starting to ramp up.
MotorTrend Car of the Year
The company’s flagship $144,000 Lucid Air model recently won the 2022 ‘MotorTrend Car of the Year.’ It’s the first time a company has won the award with their first car. It was praised for its efficiency and range — two metrics that have historically kept owners of traditional Internal Combustion Engine (ICE) vehicles from switching.
The Dream R edition achieves 520 miles of range on a single charge. For perspective, that’s enough range to drive from London to York, and back, with almost 100 miles to spare. The US Environmental Protection Agency (EPA) has certified it as the longest-range car in the USA, with MotorTrend hailing it as ‘the new benchmark.’ And more affordable versions will be coming on to the market next year.
CEO Peter Rawlinson previously worked at Tesla and helped engineer the Model S, which won the award back in 2012. It’s possible that investors are envisioning a scenario where Lucid’s share price grows as rapidly as Tesla’s over the next few years. In 2012, Tesla traded for around $6 a share, and has since risen an eyewatering 18,500% to $1,116. Replicating even a small fraction of this success would delight Lucid shareholders.
In Q3 results, the start-up revealed that customer car reservations had risen to 13,000, worth $1.3 billion. Reservations have since increased to 17,000. In addition, Lucid ended the quarter with $4.8 billion in cash, which it will use to fuel expansion.
Unlike rival Rivian, production has started in its Advanced Manufacturing Plant (AMP) in Arizona, with the capacity to build 34,000 vehicles per year. However, it’s expanding the space by 2.85 million feet to increase production to 90,000 per year by the end of 2023.
Rawlinson said that he was proud of beginning ‘production of vehicles for customer deliveries, continued investing in capacity expansion…and new retail and service locations in advance of the Lucid Air launch.’ Looking ahead he expects ‘significant demand…confident in our ability to achieve 20,000 units in 2022.’ But he acknowledged the ‘challenges facing the automotive industry, with global disruptions to supply chains and logistics.’ A key concern going forward will be the microchip shortage, as electric vehicles use more than twice as many as oil-powered cars.
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