With the expansion plan, Lucid Group shares are positioned for new highs in 2022


Electric vehicles are likely to remain a key investment topic until 2022. However, as competition in the industry increases, investors need to be increasingly selective in their choice of EV shares. Lucid group (NASDAQ:LCID) share is one share that deserves a place in the portfolio. The price of the LCID share has increased by 8.83% in 2022 so far.

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Last year was quite volatile for LCID shares. From the euphoric rise before the announcement of the SPAC business combination to the sharp drop below the $ 20 level.

However, the current rise in LCID shares is not speculative. Once deliveries to customers begin, the upward trend is likely to drive the groundbreaking news.

It is worth mentioning that the Lucid Air Dream edition is fully occupied. In addition, the company has started making reservations for the Air Pure, Air Touring and Air Grand Touring models.

It is important to note that Lucid acceptance of reservations on the Web from 17 countries, except the United States. The company is pursuing an aggressive international expansion plan.

Nio (NYSE:NIO) has been in business for several years and in 2021 began international expansion with Norway. Furthermore, Nio plans to expand to 25 countries by 2025.

This puts in perspective the aggressive expansion of Lucid Motors.

Lucid will probably follow Tesla (NASDAQ:TSLA) approach to international enlargement. Tesla’s Gigafactory is present in the USA, Europe and China.

Also watching is Lucid Motors CEO Peter Rawlinson build factories outside USA This will help the company expand capacity and reduce logistics costs.

The original carmaker is already considering quadrupling the size of its Arizona plant. This will help meet the growing demand in 2022 and 2023.

Why is Lucid likely to succeed?

I believe Lucid is likely to receive a strong response by 2022. It is worth mentioning that the company has already had more than 13,000 bookings since November 2021.

Lucid set up the first model as a luxury car and the market response is clearly positive. The model has a technological advantage. An example is the Lucid Air Dream Edition the first EPA-certified car to reach 520 miles.

Lucid Air was also named as MotorTrend’s car of the year for 2022. According to the automotive industry bible, it is a car “It’s a technological show.”

One of the reasons for Lucid’s opening of bookings in several countries is the fact that Lucid Air is aimed at a higher end of the market. Broader market reach is needed for strong supply growth.

However, it is very likely that Lucid will produce cars for the mass market in the next few years. This will significantly expand the company’s address market. The company plans to launch a competitor to the Tesla Model 3 by 2024 or 2025.

In addition, it is likely that Lucid partner with car manufacturers for an electric car worth $ 25,000 over the next three to four years. It is clear that the company has ambitious plans and the electric vehicle market has been facing obstacles for many years.

LCID stock supported by sustainable growth

Lucid Motors is likely to be present in all key electric vehicle markets by 2023 or 2024. With international expansion, new models and a focus on technology, the company is positioned for sustainable growth that will support the launch of LCID shares.

The company reported $ 4.8 billion in cash and cash equivalents for the third quarter of 2021. In December 2021, it raised more than $ 2.0 billion through interchangeable banknotes. As a result, the company has a liquidity buffer of nearly $ 7.0 billion (not adjusted for spending in the fourth quarter of 2021). This provides great financial flexibility for aggressive growth over the next 12-18 months.

It is worth mentioning that the company invested $ 342 million in research and development for the third quarter of 2020. Investments increased 72% to $ 587 million in the third quarter of 2021. This is a clear indication of the company’s focus on creating differentiation through technology investment.

Overall, LCID shares look attractive even after a 63% rise in the last six months. The growth trend of shares is likely to continue until 2022.

On the day of publication, Faisal Humayun did not hold (directly or indirectly) any position in any of the securities mentioned in this Article. The opinions expressed in this article are the opinions of the writer who are the subject InvestorPlace.com Guidelines for publication.

Faisal Humayun is a senior research analyst with 12 years of industry experience in credit research, equity research and financial modeling. Faisal is the author of more than 1,500 articles on stocks with a focus on the technology, energy and raw materials sectors.


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