The narrative for electric vehicles (EV) has flip-flopped faster than you can turn the pillow to the cold side. The industry went from potentially overhyped, full of optimism, with EVs about to go mainstream to today's narrative of stalling sales growth, charging infrastructure woes, and a lack of affordable options to drive demand.
Despite the surrounding doom and gloom, investors in Lucid Group (LCID 1.68%) received some great news when the young EV start-up released first-quarter delivery numbers. Let's take a closer look at that news and whether it makes the stock a buy now.
By the numbers
There hasn't been much good news for EV investors to digest of late. Yet, Lucid reported a 40% jump in first-quarter 2024 deliveries, compared to the prior year. Lucid even cleared a little inventory as it delivered 1,967 Air sedans while producing only 1,728 during the first quarter.
The first-quarter delivery result was also a 13% increase sequentially compared to Q4 2023's total of 1,734. Lucid's first-quarter result checked in well ahead of Wall Street's estimates calling for just over 1,800 vehicles delivered, according to Bloomberg.
Part of the driving force behind Lucid's spike in deliveries was its February price cuts. Lucid slashed prices of the Air Pure trim by $7,500 in mid-February, which puts its starting price at around $70,000. While Lucid also slashed prices on higher-trim versions of the Air sedan, it even offered incentives to lure consumers by offering leasing deals in April.
In addition, Lucid is offering a $5,000 discount on certain inventory and a $1,000 credit for charging equipment. The company is determined to offset weakness in demand with more competitive pricing as the higher-end market for EVs has become saturated.
Is Lucid a buy now?
Lucid's 40% year-over-year jump in deliveries is great news for investors, but it's also not a singular reason to jump into owning shares of the young EV maker. However, delivering more vehicles and generating more revenue could give investors confidence that the company can get to the next leg of the race.
That is where things could get much more interesting for investors as Lucid plans to launch its Gravity crossover this year, potentially opening the door to a new and broader consumer segment. That will be important. Another leg of the race will be the company's plan to launch a new "midsize" platform that will offer vehicles to compete with Tesla's Model Y and Model 3 -- the best-selling EVs in the U.S. market.
Lucid's surge in deliveries during the first quarter doesn't specifically make it a stock to start a position in now, as this year will be challenging for cash-strapped young EV makers. But if Lucid can continue to be competitive on pricing, increase sales at a time when momentum is slowing for the broader EV industry, and flawlessly launch its Gravity crossover, it could turn out to be a better-than-expected year for Lucid investors.
