Please ensure Javascript is enabled for purposes of website accessibility

Why Lucid Group Stock Has Gained 38% in the Last Week -- and Is Up Again Today

By John Rosevear – Sep 21, 2021 at 11:11AM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

After years of preparation, the company is finally close to shipping its first electric vehicles to customers. That's a big deal.

What happened

Shares of electric vehicle start-up Lucid Group (LCID 3.28%) were trading higher on Tuesday, adding to its notable run-up even as rivals' stocks have slumped amid broad concerns about the potential collapse of a debt-laden Chinese property developer. 

As of 10:30 a.m. EDT, Lucid's shares were up about 8.7% from Monday's close, and up about 38% since last Tuesday's close. 

So what

Auto investors are clearly excited about Lucid: The company's stock bucked the market's trend during Monday's broad sell-off, closing up 4.8% on a day when nearly all of its rivals were down sharply. 

But there was no big news from Lucid Monday (or Tuesday), so why the excitement?

I think the explanation is the obvious one: Lucid is probably no more than a few weeks away from making the leap from "minimal-revenue start-up" to "automaker," and its first model -- the luxury Lucid Air sedan -- has a lot of potential. 

A bronze Lucid Air, an electric luxury-performance sedan.

The Lucid Air sedan has impressed critics and earned industry-leading range ratings from the EPA. Image source: Lucid Group.

Lucid's Arizona factory has been building test vehicles for several months as the company refines its manufacturing plan and works to ensure that the vehicles it delivers to the public will be of the highest possible quality. Now, with some positive early reviews and impressive EPA range ratings in its pocket, the company is expected to begin production of customer vehicles very soon -- likely next month. 

Lucid has always had a great story. But now that story is becoming a tangible reality, and so far, the company appears to be delivering on its bold promises. Given that, it's no surprise that investors are excited.

Now what

Lucid will hold a series of events for investors and the media at its Arizona factory next week. I expect that it will begin ramping up production of the Air shortly thereafter, but I also expect we'll get more details about its plans during those events. 

John Rosevear has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.