Currently, the electric vehicle industry is facing significant winds.
Lucid vehicles are expensive and leadership stability is a big question.
It is best to take a waiting approach to Lucid Stock, not buy.
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The electric vehicle industry is tempting because despite some failures, many countries and customers around the world are transferring their attention to EVS. The profits in the acceptance of EV are often attributed to both consumer interest and government stimuli that prompt the growth of the industry.
The result is that in 2024 1.3 million EVs were sold, an increase of 7% compared to the previous year. Still, it’s not all the sun and arcs in the EV industry. The high cost of electric vehicles and the lagging EV infrastructure are listed by the consumers as a significant barrier to buy an electric vehicle.
Lucid (Nasdaq: LCID) He knows the struggle to remove EVS from Earth in the US just as well as anyone. After years slower than expected production and several changes to leadership, Lucid Stock fell. The shares decrease by about 50% of their 52-week peak, currently setting the price of their shares under $ 3.
With the steep decline, now is the right time to buy Lucid Stock at a discount? I think investors are better to wait to see how things are shaking for the company. That is why it is better not to buy Lucid right now.
Image source: Lucid.
Having a long -term perspective on the shares you own is an important investment strategy, which is why it is worried to see that the US is withdrawing from some of its investments and incentives for the EV infrastructure.
First, the Trump administration threw cold water on the idea of maintaining tax incentives to buy electric vehicles. The incentives were worth up to $ 7,500 for new vehicles and although Lucid did not qualify for them – its EVs are too expensive – the incentives still acted as a catalyst for raising the width industry of EV.
With those who go, there are less incentives for buyers to buy EV and less incentives for car manufacturers to make bold transitions to electrified models. In addition, the administration has returned the government’s previous engagement to invest billions of dollars in EV charging infrastructure. A legal battle is currently underway for funding, but if the administration paves its way, countries may not receive $ 5 billion funding to build EV charging devices across the country.
The wide market conditions of EV are important for Lucid because it is still a newly hatched EV mark. In order to succeed, Lucid and his peers need a great deal of demand for their vehicles and a greater infrastructure to charge EV. Unfortunately, this now seems less likely in the next few years.
Of course, not all Lucid problems stem from external forces. One problem that is currently confronted with is that vehicles are too dangerous expensive for many American buyers. Not only does this injure Lucid’s ability to expand its customer base, it also injures its ability to scales its production more efficiently.
In order to make a profit in the automotive industry, companies must have savings of scale for their product groups, sharing components in many vehicles. Lucid’s most cheap air sedan starts at nearly $ 70,000, and its gravitational SUV starts at about $ 80,000. Gravity is still in low production, so any cost savings by sharing parts have not yet had time to start.
More importantly, initial air prices and gravity are expensive than even EV standards. The average price of the EV transaction in the United States in May was about $ 57,700. This makes the cheapest air model 21% above the average price of EV, and gravity by 39% is more expensive than the average.
Lucid is expected to launch its Earth EV, at a price of about $ 48,000, in 2027 or 2028. This will ultimately help Lucid achieve more efficient production costs and potentially expand its customer base, but how well the company will be able to deliver this and when the land is actually sold are large unknown.
Exactly four months ago, Peter Rowlinson withdrew from the position of Lucid CEO. The company, Mark Winterhoff, is now a temporary executive director while the board is looking for a permanent leader.
Although it may be the right course of Lucid to seek new leadership, the fact that the company is still in the process of finding a constant replacement at such a difficult time for Lucid that investors may be cautious to jump with Lucid right now.
Changing leadership can be normal, but Lucid is currently on it third CEO-two permanent and one intermediate-from 2019 I would like to see more stability in C-Suite before I feel comfortable that Lucid is on the right path and can introduce it to its ambitions on EV.
I root for Lucid, as I am for many EV companies, but that doesn’t mean that I will feel comfortable at the moment to buy his shares. For all the above reasons, I think it is best to take a waiting approach with Lucid before purchasing shares.
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Chris Neiger has no position in any of the mentioned shares. Motley Fool has no position in any of the reserves mentioned. Motley Fool has a policy of disclosure.
Do you have to buy Lucid Stock while under $ 3? Originally published by Motley Fool
