Shares of electric vehicle start-up Lucid Group (NASDAQ:LCID) 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.
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.
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.
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.