From many perspectives, the next decade should prove very exciting for Lucid Group (LCID +0.61%). The company plans to release several new models in the years to come, and may ultimately pursue a strategy shift that aligns itself more closely with the biggest electric vehicle (EV) stock in the world: Tesla.
Where will Lucid be 10 years from now? Investors should be focused on two primary catalysts.
NASDAQ: LCID
Key Data Points
1. Expect Lucid to release cheaper electric cars
The biggest growth catalyst for EV companies has been the introduction of mass market vehicles. That is, vehicles that are priced low enough for the masses to afford them. Right now, Lucid's existing lineup can cost $100,000 or more depending on options. Put simply, the vast majority of people will never even consider a Lucid model for purchase. That's a big problem considering more than 90% of Tesla's sales now come from just two models: its affordably priced Model 3 and Model Y.
Lucid has teased cheaper models in the past. Last year, the company revealed that several models were in its pipeline that should have starting prices under $50,000. Since then, however, updates have been scarce. The most recent update suggested that production on a cheap SUV model would begin in late 2026 at the company's newly upgraded factory in Saudi Arabia. But Lucid has missed production milestones before. I wouldn't be surprised to see this timeline extend into 2027, especially with Lucid's current financial constraints.
Still, cheaper vehicles are a must for an EV maker hoping to grow long-term. Whether it's this year, next year, or even 2028, expect Lucid to focus more on cheaper vehicle models. Over the next decade, these vehicles should account for most of its vehicle sales, similar to Tesla's current sales breakdown.
Image source: Lucid Group.
2. Lucid may follow Tesla's strategic shift
I expect cheaper models to account for most of Lucid's vehicle sales only over the next decade, not necessarily its total sales. That's because the company's leadership has repeatedly told investors that, long-term, it hopes the minority of its sales will come from hardware sales. In time, management wants the company to be mostly focused on software, supplying other EV makers with the software required for advanced capabilities like autonomous driving.
While most of Tesla's sales still come from vehicle sales, CEO Elon Musk also has a greater vision for his company. Robotaxis, artificial intelligence, and other software components will increasingly drive Tesla's sales over the future. Other EV makers like Rivian are attempting the same pivot, and I expect Lucid will attempt a similar strategic shift. Whether Lucid can manage this pivot successfully is another question entirely. Its relative lack of financial firepower is concerning. But over the next decade, investors should expect Lucid to attempt this strategic pivot. Being comfortable with dedicating massive resources to this potential growth driver is a must for all shareholders.
