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Lucid EV production jump: Will LCID stock price follow luxury carmaker’s improved outlook?

By Jenny McCall

13:16, 2 November 2022

A image of a Lucid Air car
There seems to be light at the end of a very turbulent tunnel for Lucid - Photo: Lucid Media

It’s been a tough year and even tougher few months for electric vehicle company Lucid Motors (LCID), which has seen its stock price plummet this year by more than  68%, driven mainly by poor EV production targets.

But some good news emerged last month, after LCID reported an increase in production of its vehicles for its third quarter - triple that of its previous quarter results.

So, can LCID start to outrace its competitors, like Tesla (TSLA) and see some more positive stock price movements in the future?

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Lucid Motors (LCID share price chart

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Is LCID seeing some light at the end of a very long tunnel? 

Releasing some preliminary results, Lucid announced on 12 October it had increased its production numbers. 

LCID said: "Lucid Group Inc is setting new standards with the longest-range, fastest-charging electric car on the market, today announced preliminary production and delivery totals for the quarter ended September 30, 2022.”

“The company produced 2,282 vehicles during Q3 at its manufacturing facility in Arizona, more than tripling the number produced in Q2, and delivered 1,398 vehicles during the same period.”

Investors maybe questioning whether this latest news on higher production figures will help to move LCID stock price more positively?

Indeed, Lucid is already reaping the benefits of its latest results and it has seen its stock price rise by 7% between 12 October and 2 November.

So perhaps LCID increasing its production numbers is the magic formula it needs right now to impress investors and get its stock price back on track.

In its second quarter results, which were released on 3 August, the US EV manufacturer cut its production target for 2022 by 50%. Instead of meeting the previous forecast of between 12,000 to 14,000 cars, Lucid now expects to produce 6,000 to 7,000 vehicles a year. During the month of August the share price fell by 9%.

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It seems the link between positive production numbers and rising share prices is key.

LCID, which officially launches its third-quarter earnings on 8 November is in desperate need of a more favourable stock price right now and higher production numbers could definitely help it achieve its goal. 

Tesla (TSLA) share price chart

LCID faced challenges

LCID has faced “extraordinary challenges in the supply chain and logistics”. The forecast of 12,000 to 14,0000 cars, was already a reduction from the original plan of 20,000 Lucid Air cars for this year.

But LCID is attempting to claw back some credibility and has rolled out its largest software update yet in October, by introducing UX 2.0, which will include improvements throughout its flagship car the Air sedan and will have features such as instant-on glass cockpit, panel displays and the launch of Highway Assist.

With its software update underway, it seems that experts are also optimistic on the stock.

Itay Michaeli, an analyst at Citi said: “We rate Lucid shares a buy/high risk. Fundamentally, we are constructive on the Lucid story and its position in the EV/car of the future theme.”

Michaeli is not the only one who rates Lucid's future positively. 

“Lucid’s Air sedan is already the longest-range EV, even ahead of Tesla (TSLA) in some areas,” Charles Coldicott, an analyst at Redburn said.

With some positive share price movements, better production numbers and new software, LCID is attempting to speed away to victory and hopefully win the EV race. But there are still challenges on the horizon. 

Markets in this article

LCID
Lucid Group, Inc.
2.78 USD
0.02 +0.740%
TSLA
Tesla Inc (Extended Hours)
175.75 USD
-0.64 -0.360%

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