What happened
Tesla (TSLA +2.96%) has been the undisputed leader in global electric vehicle development, and has yet to see any meaningful competition in the U.S. market. But its stock can move due to everything from a social media post by CEO Elon Musk to a trade by ARK Invest CEO Cathie Wood or just general tech sector momentum. Today seems to have a mix of several reasons why shares were up 2%, then down 1% before settling to a small gain as of 3:30 p.m. EDT.
So what
Tesla's valuation is based on its technologies as much as its vehicle sales. But a new player in the domestic EV market is thought to be its first real potential competition. Lucid Group (LCID 5.26%) said it has begun production and has more orders than previously revealed as it hosts analysts at its new Arizona manufacturing facility this week.
Image source: Tesla.
Now what
Comparing Lucid to Tesla was almost inevitable. Lucid CEO Peter Rawlinson was previously the chief engineer for Tesla's Model S sedan development. And Rawlinson has touted what he believes is a technology advantage for Lucid over its competition. That boast gained credibility two weeks ago when the Environmental Protection Agency rated the long-range version of the Lucid Air sedan with a 520-mile battery range, the longest range ever rated for an EV by the EPA and more than 100 miles beyond Tesla's Model S rating.
Lucid has now begun production of its luxury sedan and says it has 13,000 reservations for the Lucid Air. It also expects to produce a symbolic 520 of its high-end $169,000 Dream Edition with deliveries beginning in late October. But Tesla produced more than 386,000 electric vehicles in the first half of 2021 alone. Its guidance implies it should surpass 750,000 this year globally.
Tesla shares may also have dropped some today due to famed tech investor Cathie Wood having sold more than $270 million worth of Tesla stock Tuesday, according to Business Insider. But that shouldn't shake Tesla bulls as three of her funds still have the stock as the top holding. Longer-term, it may be more important for Tesla investors to watch Lucid, but it won't be anytime soon that the start-up catches up to Tesla's sales.
