The electric vehicle (EV) industry is grappling with multiple headwinds, including inflationary pressures and supply chain constraints. The Russia-Ukraine conflict has added fuel to the fire by causing commodity prices to rise, which in turn, increased costs for EV makers. These costs are then transferred to consumers via higher prices.
Lucid Group (NASDAQ: LCID) is among such American EV manufacturers. It announced revised pricing across most of its models to be implemented starting June 1, 2022. However, the pricing will still be the same for existing reservations and any new reservations made by May 31, 2022.
Though the company is striving to ease the impact of disruptions caused by multiple challenges in the industry, its production might be affected by further issues. At present, the company has maintained its production volume outlook of 12,000 to 14,000 vehicles for the year.
It reported a smaller-than-expected loss for the first quarter of 2022. Also, revenues topped analysts’ expectations.
Results in Detail
Lucid recorded a loss of $0.05 per share against the Street’s loss estimate of $0.30 per share.
Additionally, quarterly revenues of $57.7 million beat the consensus estimate of $53.43 million and compared favorably with revenues of $0.3 million recorded in the prior-year quarter. Revenues sparked on 360 vehicles delivered to customers in the first quarter.
Interestingly, customer reservations rose to over 30,000, reflecting significant potential sales of $2.9 billion.
Recently, the government of Saudi Arabia inked a deal with Lucid to purchase up to 100,000 electric vehicles over the next 10 years.
As of March 31, 2022, the company had about $5.4 billion of cash on hand.
Outlook
Encouragingly, the CEO of Lucid, Peter Rawlinson, said, “Looking forward, we remain intently focused on ramping production and are excited about our product roadmap in 2022 and beyond with Air Grand Touring Performance deliveries expected in June; Air Touring and Air Pure later this year; and with our Project Gravity SUV remaining on target to begin production in the first half of 2024.”
Wall Street’s Take
Wall Street is cautiously optimistic about the stock, with a Moderate Buy consensus rating based on three Buys versus one Sell. The average Lucid price target of $40.50 implies 113.4% upside potential from current levels. Shares have decreased almost 51% year-to-date.
Bloggers Weigh In
Bloggers seem enthused by the company’s earnings results. TipRanks data shows that financial blogger opinions are 80% Bullish on LCID, compared to a sector average of 68%.
The Bottom Line on LCID Stock
EV companies are facing production issues due to global supply chain and logistics challenges on the back of COVID-related factory shutdowns in China as well. Nevertheless, EVs are currently demonstrating rapid technological improvements and expanding charging infrastructure. Therefore, being in the evolving stage, these are likely to be the future of the auto industry.
Based on the current stock price performance, analyst ratings, decent results, and production outlook of Lucid, it fits well into a buy-the-dip strategy for investors.
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