What happened
Lucid Group (LCID 0.96%) had a hard fall this morning, with the electric vehicle (EV) stock tumbling 6.9% at its lowest point in trading Thursday. Lucid shares regained some ground as the day progressed but still traded 4.5% lower as of 2 p.m. ET.
Lucid is touted to be one of Tesla's (TSLA +2.40%) biggest emerging competitors, but the latter may have just reminded Lucid investors what a tough fight it'll be for the EV start-up.
So what
Lucid recently slashed its production estimate for 2022 by a whopping 40% citing supply chain constraints. That, and other numbers Lucid reported, has put the EV stock under a lot of pressure so far this month.
NASDAQ: LCID
Key Data Points
To be sure, the problem isn't restricted to Lucid, and Tesla has repeatedly said the ongoing supply challenges may not ease anytime soon.
Yet Tesla has one power Lucid doesn't have: the ability to pass on higher costs to customers.
Tesla has just raised prices of Model 3 and Model Y EVs in both the U.S. and China. It will now charge $1,000 more per Model Y SUV and Model 3 Long Range sedan in the U.S. Meanwhile, Tesla's sales in China soared in February, as per the latest industry data released on March 10.
Image source: Getty Images.
Tesla blames the price hike on the unprecedented surge in the price of nickel, a key metal used in EV batteries. Nickel's price, in fact, doubled within hours on the London Metal Exchange (LME) on Tuesday as the Russia-Ukraine conflict escalated, even prompting the LME to halt trading in the metal.
Now what
High input costs and a shortage of key materials like semiconductor chips are already hurting Lucid hard, as is evidenced in the company's dramatic cut in production estimate for 2022. The rally in nickel price could only add to Lucid's woes, and that's making investors in the once-hot EV stock very nervous today despite Lucid's rising reservation numbers.
