Lucid Group (LCID -5.29%) has been a divisive stock since its public debut last July. The bulls will point out that the electric vehicle (EV) maker is led by Peter Rawlinson, a former Tesla (TSLA 2.46%) engineer who worked on the Model S, and that its debut vehicle, the Lucid Air, can travel much farther on a single charge than Tesla's Model S Long Range. Lucid also believes it can eventually ship half a million vehicles annually by 2030.
The bears will note that Lucid recently recalled most of its delivered vehicles over a suspension issue, broadly missed analysts' sales expectations in its fourth quarter, slashed its full-year shipment forecast for 2022 by 30% to 40%, and postponed the upcoming launch of its Gravity SUV. Its losses are still widening, its debt levels are climbing, and the stock definitely isn't cheap at more than 20 times its projected sales for the current year.
Image source: Lucid.
These issues have been discussed before, and I believe Lucid's bears will likely outnumber its bulls in the near term in this challenging market. But today, I'll focus on three lesser-known facts about Lucid -- and how they might differentiate it from Tesla and other higher-end EV makers.
1. A "post-luxury" brand
The Lucid Air starts at $77,400, while its higher-end Grand Touring and Dream Air models start at $139,000 and $169,000, respectively. Tesla's Model S starts at $89,900, and a fully loaded Plaid S model costs about $150,000. Tesla also sells the cheaper Model 3, which starts at $39,940.
Lucid's prices are somewhat comparable to Tesla's, but it claims that it targets a higher-end "post-luxury" market.
During an investor presentation last February, Lucid said BMW, Daimler's Mercedes-Benz, and Volkswagen's Audi were "established luxury" brands. It called BMW a "sport luxury" brand, Audi a "tech luxury" brand, and Mercedes-Benz a "classic luxury" brand. But then it said Tesla was "innovative but not luxury" -- a surprising statement since Kelley Blue Book (and many consumers) still consistently classify Tesla as a luxury brand.
Lucid claims this "post-luxury" niche, which it plans to carve out with its vehicles, will be defined by "increased expectations" from consumers. That's a vague statement, but it suggests that Lucid will continue to prioritize six-figure vehicles as Tesla launches more lower-end vehicles like the Model 3.
2. It goes all-in on Alexa
Lucid natively integrates Amazon's (AMZN -3.19%) voice assistant Alexa into its in-vehicle lighting, climate control, entertainment, and navigation systems. It can even remotely access smart home devices.
Tesla also supports voice-activated commands, but they run on its own proprietary Linux-based operating system. Some developers have created unofficial Alexa apps for Tesla's vehicles, but they require paid subscriptions and aren't as smoothly integrated as Lucid's built-in Alexa services.
A growing number of automakers, including Ford, BMW, Audi, and Mercedes-Benz, have also integrated Alexa into their newer vehicles. By tethering itself to that broader ecosystem, Lucid might become a more appealing choice than Tesla for Alexa users.
3. It's likely using Mobileye's chips
In 2016, Lucid partnered with the Israeli chipmaker Mobileye -- the world's leading maker of advanced driver assistance systems (ADAS) and computer vision chips -- to develop its autonomous driving platform.
Intel (INTC 0.38%) acquired Mobileye the following year, but neither Intel nor Lucid have provided any updates regarding that partnership since then. However, Mobileye's chips, which account for 70% of the ADAS market, probably still power Lucid's DreamDrive semi-autonomous driving platform along with components and services from Continental, Bosch, Here, and other companies.
Intel plans to spin off Mobileye again in an IPO later this year, so we might hear a lot more about its work with Lucid and other automakers once it starts disclosing its numbers separately again.
Mobileye also previously supplied ADAS chips to Tesla, but it discontinued that partnership in 2016 after expressing safety concerns regarding Tesla's usage of its chips for its Autopilot feature. Therefore, sticking with Mobileye might enable Lucid to launch safer autonomous vehicles in the near future.
It's still a speculative stock
Lucid has stirred up a lot of excitement among investors and auto enthusiasts, but it remains a highly speculative investment. It's only delivered 300 vehicles between last October and the end of this February, and it will face a lot of supply chain challenges as it tries to achieve its reduced forecast for 12,000 to 14,000 deliveries this year.
It's making some smart moves by aiming higher than Tesla, tethering itself to Alexa, and (probably) using Mobileye's industry-leading chips, but those decisions probably won't resolve its biggest challenge -- scaling up its operations to meet its rising reservations -- anytime soon.
