Lucid pares its gain as investors weigh EV tech edge, Saudi funding against soft demand trends

Lucid Group (NASDAQ:LCID) pared its post-earnings gain as investors and analysts showed some concerns about the near-term demand trajectory.

Needham analyst Chris Pierce said the firm is believers in Lucid’s (LCID) industry-leading electric vehicle efficiency technology, but noted that management opted against increasing FY24 vehicle production forecasts despite the first-half strength, which is seen leaving demand uncertainty as an overhang on the stock. Needham reiterated its Hold rating on the EV name, with LCID trading at 15X the 2030 adjusted EBITDA estimate discounted back. Cantor Fitzgerald lifted its rating on Lucid (LCID) to Neutral from Underweight due to the cash runway being extended and expectation for improved deliveries in 2025. Bank of America also has a Neutral rating on Lucid Group. Analyst John Murphy and his team see risks from softer demand and expect the company will need to raise more capital in addition to the $1.5 billion brought in this quarter. Those negative factors are seen being balanced by the view that LCID has class-leading powertrain tech and attractive products.

During the earnings call (transcript), Lucid Group (LCID) took a victory lap over the company’s tech advantage. “We estimate that if the closest competitor were to continue at its rate of operational efficiency progress, it would take them many years to match where Lucid’s core EV technology is today,” noted CEO Peter Rawlinson.

“By this measure, Lucid is many years ahead off the number two player. And of course, the traditional car brands are even further behind them. And I think you’re seeing this play out. Some are recognizing just how hard it is, and I think it’s a matter of time before car brands might look to enhance their own know-how with Lucid’s advanced technology.”

Lucid Group (LCID) was up 1.18% at 11:48 a.m. vs. the 52-week trading range of $2.29 to $7.30. Short interest on the EV stock stands at 10.2% of the total float.