Shares of Lucid Group (NASDAQ: LCID) have rallied 18.4% in the past month as the luxury electric vehicle (EV) maker posted encouraging Q1 results. The stock, however, has yet to fully recover and is still trading near its 52-week low of $13.25.
Furthermore, LCID stock is down roughly 56% year-to-date and was down 5% on Friday, closing at $18.02.
One reason for LCID’s stock price lagging in the lower range could be the company’s announcement of a hike in vehicle prices that came into effect on June 1. Lucid attempted to lessen the impact of its price hike earlier this week by making it easier to purchase its Lucid Air.
Further, the company unveiled Lucid Financial Services, a digital platform “offering a flexible, fast and easy financing process, including lease and loan purchase options to Lucid Air customers,” specifically in the U.S. through a strategic partnership with Bank of America.
Lucid stated in its press release that this financing option will be accessible to customers taking deliveries of Lucid Air Grand Touring and Pure models.
Amira Aly, Lucid’s Director of Financial Services commented, “Lucid Air customers have requested flexible financing options, including lease and loan purchase, with many of them preferring a 100% digital experience.”
Lucid Financial Services platform will offer a concierge service and enable all “aspects of the vehicle purchasing process to be completed online, including the finance application and e-signing of the finance contract.” Customers will be able to apply for leases ranging from 24 months to 48 months and loans with various durations.
The EV maker had stated in its Q1 press release that it would increase the prices of its vehicles from June onwards.
Elaborating further on the elevated pricing, Sherry House Lucid’s CFO commented on its Q1 earnings call, “As of June 1, the new pricing will be $154,000 for Grand Touring, $107,400 for Touring, and $87,400 for Pure. And as Peter said, we will honor current pricing for all existing customer reservations as well as new reservations made before the end of the month, as long as potential customers convert their reservations to orders within 30 days of the opening of the order system.”
Wall Street’s Take
Citigroup analyst Itay Michaeli maintained a Buy rating on the stock but lowered the price target to $36 from $45, implying an upside potential of 99.8% at current levels.
Wall Street analysts are cautiously optimistic about LCID with a Moderate Buy consensus rating based on two Buys and one Sell. The average LCID price target of $31 implies an upside potential of 63.5% at current levels.
Bottom Line
It’s probable that Lucid’s financial services platform is an attempt to lessen the impact of its vehicle pricing hikes.
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