Today's significant rise in Lucid's stock price.
Lucid Group's (LCID) shares experienced a surge on Wednesday, recording a peak increase of 8.9% in the early hours. By 12:30 p.m. ET, the stock was trading 4.5% higher.
Investors in the electric vehicle (EV) sector appear to be overlooking their displeasure with President-elect Donald Trump's choice of new Environmental Protection Agency (EPA) leader and focusing on factors that could potentially revitalize Lucid.
Lucid anticipates police utilization of its Air sedans
Lucid's shares experienced a decline the previous day due to investor reactions to Trump's selection of former Congressman Lee Zeldin as the EPA leader. Given Trump's past stance as president, environmentalists and clean energy and EV stock investors are concerned that Trump may reduce the EPA's budget and repeal the Inflation Reduction Act, which earmarked billions for clean energy, including EV tax credits. Zeldin voted against the act while in Congress.
However, Lucid's shares recovered today following the release of inflation numbers for October, which aligned with expectations. High inflation and interest rates often suppress car demand in general.
On its social media platform X, previously known as Twitter, Lucid shared images of its modified sedan's police car version and announced that the Air sedan had been tested by the California Highway Patrol (CHP). While specifics about the vehicle testing are scarce, Lucid's announcement implies that its flagship sedan might be integrated into law enforcement agency fleets, which are increasingly adopting EVs.
Lucid's shares also received a rating upgrade from Jaime Perez of R.F. Lafferty. Perez upgraded the EV stock's rating from hold to buy and set a price target of $4 per share, citing Lucid's third-quarter earnings report.
Despite reporting a substantial net loss of over $990 million on revenue of $200 million in the quarter, Lucid's costs decreased and deliveries increased by 91% year over year and 16% sequentially. Perez commends Lucid's volume growth, cost reduction, and financial stability -- the company concluded Q3 with approximately $5.2 billion in liquidity, after raising additional funds during the quarter.
Could Lucid's stock continue to climb?
Lucid is now primarily focused on its Gravity SUV. It began accepting orders for the SUV this month and plans to commence production later this year. While it's currently accepting orders for the Gravity Grand Touring starting from $94,900, it estimates launching the Grand Touring trim with prices beginning at $79,900 in late 2025.
The anticipated demand for Gravity and the effects of Lucid's ongoing cost reduction efforts on its margins are the primary factors that could propel Lucid's stock further, especially after it recently plummeted to its 52-week low.
Investors might be drawn to Lucid's financial prospects, as the company's focus on reducing costs and increasing deliveries could potentially yield positive returns. With the upcoming launch of the Gravity SUV and the stable financial position, there's a possibility that money could be invested in Lucid Group (LCID), aiming for potential financial gains.
As the Lucid Gravity SUV garners interest and production begins, finance analysts might take notice of the company's improving financial situation, which could lead to further investment opportunities in the EV sector.
