A lot has happened since Lucid Group (LCID 0.41%) went public in July 2021. Its Air Dream Edition with 520 miles became the longest-range electric vehicle (EV) yet and attracted rave reviews once it hit the roads in late October. With the company also expanding production capacity, Lucid stock rose a stunning 280% in 2021.
In the past three months, though, the stock has lost more than 50% of its value, partly because of the broader sell-off in growth stocks and largely because of a subpoena from the Securities and Exchange Commission (SEC) in December, regarding its merger with a special purpose acquisition company and unnamed "projections and statements." (There have been no updates on the SEC matter.)
Lucid investors have since pinned all hopes on its fourth-quarter numbers and outlook to help the stock bottom out and rebound. Instead, the earnings report sent the stock plunging even further, with its share price dropping 19% at one point this morning.
The big question now is whether Lucid's numbers and outlook warrant such a knee-jerk reaction or has the market overreacted and in doing so, presented you with a golden opportunity to buy the once-hot EV stock before it rebounds?
Before you jump to conclusions, here are the most crucial numbers from Lucid that you must know.
Reservations: Lucid had secured more than 17,000 reservations across all of its four models (the Air Dream Edition, Air Grand Touring, Air Touring, and Air Pure) by mid-November. As of Feb. 28, Lucid's reservations exceeded 25,000 units, worth more than $2.4 billion in potential sales.
Deliveries: Lucid started deliveries of the Dream Edition in late October. As of Feb. 28, it had delivered more than 300 units, including 125 units in 2021. Investors had bigger expectations given that Lucid had earlier said it plans to start deliveries of other models only after delivering 520 Dream Editions.
Production: This, by far, is the most important number investors are focused on, because the ability of an EV manufacturer to produce at scale and its pace of production are two of the biggest advantages to have in such a highly competitive industry. Until November, Lucid was confident of producing 20,000 vehicles in 2022 as it ramped up production at its Arizona factory. It now expects to produce only 12,000 to 14,000 units this year as it navigates supply and logistics challenges.
The Lucid Air. Image source: Lucid Group.
To be fair, Lucid isn't the only EV start-up to fall short of its production estimates. Rivian Automotive (RIVN 6.10%), whose debut electric truck has also won accolades, like Lucid's debut electric car, is just one of the other companies to have missed its goals. Also, Lucid isn't the only automaker facing supply constraints.
Importantly, its reservation numbers are strong. Also, during its fourth-quarter earnings conference call, Lucid said that reservations for its second-most expensive model after the Air Dream Edition, the Grand Touring, were higher than its two lowest-priced trim packages. Lucid also confirmed plans to set up a factory in Saudi Arabia, a nation it has strong connections with.
I'd want to believe Lucid is prioritizing quality over quantity when it comes to production right now, and its revenue could grow steadily once the dust settles on the supply chain. As that happens, Lucid's stock could be back in the limelight again.
