What happened
Ending Tuesday's trading session nominally higher than where they closed on Monday, shares of Lucid (LCID -0.53%) are racing higher this morning. News out of the Middle East is powering investors' excitement in the luxury electric vehicle (EV) manufacturer.
As of 10:19 a.m. ET on Wednesday, shares of Lucid are up 7.5%.
So what
Drivers in Saudi Arabia looking to lease their next vehicle have a new option. According to a tweet from The Saudi Post, leasing companies there have started to lease Lucid vehicles for the first time. The tweet also references the factory that Lucid is building in the nation, projecting that it will start producing vehicles by 2024.
In April 2022, Lucid announced that the government of Saudi Arabia had agreed to purchase up to 100,000 vehicles from Lucid over a 10-year period.
With an annual production capacity of 150,000 vehicles, the plant in Saudi Arabia will be Lucid's first international factory, complementing the one in Arizona. Initially, vehicles produced at the plant will be sold in Saudi Arabia, but the company expects to subsequently export units throughout the region.
Now what
Choosing to park Lucid in your portfolio solely because companies in Saudi Arabia are beginning to lease its EVs seems a bit premature. Sure, it's an encouraging development for the company, but it won't be something that truly moves the needle.
The larger issue for the company is the apparent weakening in demand. Until this improves, Lucid might be a better EV stock to watch from the side of the road.
