EV maker Lucid’s new manufacturing facility in Arizona is churning out vehicles. Investors are cheering the news.
Courtesy of Lucid Motors
Stock in electric-vehicle maker Lucid Group is rising because the company has hit a big milestone for an aspiring automotive startup. Production has begun at its new assembly facility Casa Grande, Arizona.
Lucid (ticker: LCID) shares are up 5.2% in after hours trading.
It’s a nice bump after a terrible day. Lucid stock fell 5.2% in Tuesday’s regular session. The slump wasn’t company-specific, and rising interest rates seem to be what spooked investors Tuesday. The Nasdaq Composite dove 2.8%, while the S&P 500 and Dow Jones Industrial Average fell 2% and 1.6%, respectively.
Lucid stock fell more than the general market, but it’s a new company without significant sales. Newly public stocks of such companies are typically marked with volatility.
Rising rates are a macroeconomic issue, but the news coming on a microeconomic level is positive. The new Lucid factory is making cars. A lot of EV startups including Fisker (FSR) aren’t making cars yet. Getting to production is a milestone for any new EV company.
Customer deliveries will begin later this month. Lucid’s first car is a high-end sedan called Air. Lucid is pursuing a Tesla
-like (TSLA)strategy going after high end customers first with plans to develop and sell lower priced EVs down the road.
Lucid stock isn’t valued like Tesla’s, but it’s still valuable for an auto maker. Lucid’s market capitalization is about $46 billion based on fully diluted shares outstanding. Ford Motor
‘s (F) market cap is about $56 billion. Ford, of course, makes millions of vehicles annually. Lucid is just starting to produce cars.
Lucid stock is also worth more than many other EV startups. Fisker, for instance, has a market value closer to $5 billion. That’s much lower than Lucid’s because investors appear to favor car companies that are already in the manufacturing stage.
Lucid stock, as of Tuesday’s close, was down about 9% over the past three months, while the S&P 500 is up about 1% over the same span.
Wall Street is split on Lucid stock. There are only three analysts that cover the company, according to Bloomberg. Two rate shares at Buy, and one has a Sell rating. Price targets range from $28 to $30 for the bullish analysts, while the bear’s stands at $12.
Write to Al Root at [email protected]
