This EV stock has dropped a lot in the
past 10 days and I feel that this is
great value at the current price. The
company I want to talk about today is
lucid motors (ticker: lcid) this dock is
one of the most talked about stocks of
2021 and I feel that recent events have
once again provided a great entry point
into this ev company that looks set to
become one of the major players in the
coming years
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hit that subscribe button now and turn
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costs you nothing but it could make you
a lot of money this is not financial
advice and I encourage everyone to do
your own due diligence now let's dive
into it lucid group is an american
electric vehicle manufacturer
headquartered in newark california lucid
was founded in 2007 and originally
focused on building electrical vehicle
batteries and powertrains for other
vehicle manufacturers the company was
originally named ativa and was rebranded
as lucid motors in 2016 as the company
began to focus on producing an
all-electric luxury vehicle in february
this year it was confirmed that (Nasdaq: lcid)
was in talks with the spac
churchill capital group to bring the
company public through a reverse merger
the transaction valued lucid at 24
billion dollars and included the largest
ever spec related common stock pipe
lucid is backed by several large
investment funds including the public
investment fund of the kingdom of saudi
arabia who were registered as by far the
largest shareholder of the company
owning over 60 percent of the total
shares
lucid operates their flagship
manufacturing factory amp-1 or advanced
manufacturing plant 1 out of arizona it
is here that the company has developed
and will produce its flagship ev the
lucid air sedan
the factory design was implemented with
a future ready strategy in mind and the
current production capacity is 34 000
units
with production expected to increase
over the coming years so far lucid
produces just one care the lucid air and
the very first deliveries of this ev
have begun in recent weeks and the sales
and reservation figures have been very
promising before I look at the most
recent news I think that this is a very
good warning to remember
ev stocks have proven to be volatile and
will continue to be so
simple announcements from the company or
analysts can have a significant impact
on lucid motor stock price
and this is true of the whole ev sector
take tesla for example
elon musk tweeting seems to affect the
tesla share price
furthermore lucid motors is not a large
automaker like mercedes renault or
general motors
lucid is a startup with little revenues
yet and a high level of cash burn
because it finances the production of
its electric vehicles in-house
rather than
outsourcing this as part of the
manufacturing process to contractors
the electric vehicle is the future of
the auto mobile industry
there is potential for exponential
revenue growth in a market that is still
in its infancy
china has been miles ahead but things
are changing and the rate of
transformation is likely to accelerate
as green energy policies become law in
the united states
when we consider the infrastructure bill
that was recently passed and the
substantial federal subsidies the impact
on the ev sector will be huge
subsidies can be as high as twelve
thousand dollars per electric vehicle
and they are certain to boost electric
vehicle adoption in the united states a
market that is still underserved in
terms of adoption
only 3.6 of all vehicle sales in the
united states were electric vehicles in
the second quarter leaving significant
room for growth in one of the world's
largest markets the electric vehicle
penetration rate in the united states is
extremely low and lucid motors will play
an important part in serving this market
and this brings me on to today's topic a
new investment opportunity has arrived
three compelling reasons why lucid
motors will fare well with electric
vehicle buyers and investors annual
production and sales of one hundred
thousand electric vehicles translates to
at least twelve billion dollars
in revenue potential reservations for
the lucid air are increasing lucid group
has big ambitions in the electric
vehicle market and it has everything it
needs to follow in the footsteps of
tesla
so the number one reason here is
customer deliveries already have started
and reservations are on the rise
now this has only started in the past
few weeks (Nasdaq: lcid) had not delivered any
cares prior to the final days of october
this article here was published on the
30th of october there are many ev
companies in the industry but only a few
can show a finished product that is
selling
I have said this plenty of times over
the past few months there is a lot of ev
companies that are priced very high that
have their valuations based on hope and
concepts of what they can develop
there are only a small number
who are actually producing and selling
cares on this front tesla is miles ahead
of the market leader and in china you
have neo who are expanding very rapidly
too beyond that in the us there is lucid
and polster who have got a big lead over
everybody else in the industry and i've
said it time and time again
the market will not be big enough going
forward to support the amount of ev
companies out there first mover
advantage here is key
this is a market with very high barriers
to entry and competition is growing
legacy care makers like toyota
ford
and general motors all have significant
resources and already have worldwide
brand loyalty
these legacy brands will definitely have
a place in the market but so too will
tesla pulse there and lucid
lucid motors announced that it has
received approximately 17 000
reservations for the lucid air luxury
sedan up from approximately 13 000
reservations in the previous reservation
status
lucid will scale up capacity to around
34 000
evs in the first phase of manufacturing
build up in arizona
the second reason is the lucid air range
rating of 520 miles is unrivaled in the
industry no other competitors
come close
this 520 mile
beats the nearest competitor by a solid
100 miles
and reason number three the production
of lucid motors air sedan is just
getting started
(Nasdaq: lcid) is expected to reveal details
about new models in a relatively short
period of time
(Nasdaq: lcid) is currently on track
to produce and sell only one primary
product the lucid air sedan but they are
hard at work on a second project
which will see the introduction of the
gravity luxury suv the suv from lucid is
still in the design phase and few
details have been revealed so far other
than the fact that the new electric
vehicle will be available in 2023
so a major question comes down to this
how many vehicles will lucid motors be
able to sell by 2025 the author here
believes that lucid can sell at least
100 000 cars annually by 2025
adding that we know that lucid motors
annual production capacity for the air
sedan
and gravity suv will be around 90 000
units a figure that may rise
significantly as ev company
expands its amp-1 manufacturing plant
the author here calculates that by
selling 100 000 evs at an average of 103
000
this equates to 12.3 billion dollars of
revenue which then brings us on to the
valuation of the company
lucid trades at sales multiple
of six
based on the 12.3 billion in expected
sales for 2025 but does note that
estimates
this far in the future have a high
margin of error
lucid's valuation is not low and the
stock remains highly volatile so this is
not a stock for everyone should buy
however such a high multiple can be
justified given the ev revolutions
accelerating pace and shifting attitudes
towards electric vehicles the biggest
risks with this company are
if lucid's delivery guidance is thrown
off for any reason and the company has
to delay production
this could have an impact on how
investors value lucid motors ev
potential again there is no guarantee
that estimates will be achieved in the
past few days (Nasdaq: lcid) stock has dropped
but let's not forget that lucid has made
serious gains
over the past couple of months gaining
about 200 percent since september
but in the past week lucid was served
with a subpoena by the sec regarding
projections and statements
it made from the spac merger and lucid
is issuing a convertible senior note
with a 1.75 billion value
now the real value of this is over 200
million higher and this is something
that I will talk about in a video later
this weekend
where I will also look at the subpoena
in more detail in conclusion
lucid motors has a high market value and
a high sales multiple but it has the
best chance of any available ev
manufacturer to grow into its valuation
over time
lucid motors valuation is high because
ev investors have high expectations of
the company
but if the company can stay out of
trouble and meet its guidance (Nasdaq: lcid)
motors could be the hottest thing since
tesla and I agree with much of this the
question is
whether or not
can lucid achieve its projections and
meet its guidance
if it can then lucid will be one of a
very small number of ev manufacturers
that will dominate the market
over the coming years
looking at the charts we can see just
how high the share price went back in
february during the first lucid mania
and the generals back hype and massive
investor confidence in the market
although things
changed pretty quickly
lcid stock again began to move in
september
looking closer at this we can see the
steady gain from september to december
boosted by consumer confidence but a few
macro issues
such as the crazy 30-year high inflation
rate is putting the market under
pressure once again this coupled with
the recent subpoena and the convertible
note issue has brought another drop
and you can see here that lucid dropped
from over 57
down to 37.
even with this news this is not a normal
price drop
this is not an otc penny stock this is a
multi-billion dollar company
dropping from 57 down to 37
has seen approximately 30 billion
wiped off the stock in just the past few
days
as always when I see huge percentage
drops like this I assess the opportunity
to swing trade I really like lucid for
its long-term potential but there is
also a very nice swing trade opportunity
here I think we could easily see this
gain back between 10 and 20 next week
so guys that brings it to the end of the
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