A Little Good News for Lucid Investors

It's been a wild ride for investors in Lucid (NASDAQ: LCID), They spent the early history of the electric vehicle (EV) maker being disappointed in production and delivery figures, among other things.

But at a time when rivals such as Rivian are stalling in deliveries, Lucid has managed to string together a handful of impressive quarters. There's more good news for investors this week, too.

What's going on

Lucid will officially start taking orders on Nov. 7 for its second vehicle, the Gravity crossover. The selection will start with the high-level Grand Touring version that has a price tag nearing $95,000 before shipping, according to the company.

That's important for investors, since the much hyped sub-$80,000 Gravity Touring trim, which investors hope will help reach more-mainstream consumers and raise sales volumes, won't start production until late 2025.

According to Automotive News, Robby DeGraff, an analyst at AutoPacific, said: "While it's of course not uncommon for a start-up, or even legacy automaker, to launch the highest-priced trim of a new EV first to recoup development costs, it will be interesting to see how strong the take rate is at nearly $100,000."

That means investors hoping to see an immediate boost in sales and deliveries (and there should still be a noticeable bump) will have to be patient as the automaker works toward its more-affordable version. This isn't necessarily a bad thing, because as the company gradually ramps up production, it has the time to get the quality and production right before moving to higher-volume trims.

To understand how much this vehicle means to investors, consider that management forecasts the potential market for the Gravity crossover will be six times that of its Air sedan.

The road ahead

Lucid has put together a solid 2024, and through the first three months of the year, it sold more EVs than it did in all of 2023. It has three straight quarters of record deliveries.

Despite this, the news isn't all great for investors as the company gears up for its third-quarter earnings report. Management announced that it anticipates a larger-than-expected third-quarter operating loss: between $765 million and $790 million, more than the $752 million loss expected by analysts, according to financial data company FactSet.

But long-term investors can take the third-quarter report with a grain of salt. What's more important for them is the company's plan to launch a midsize crossover in roughly two years priced below $50,000 before shipping. For now, it's just a little good news that orders are about to be open for the Gravity, and if management can execute its production ramp-up, investors should be in for a solid 2025.

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Daniel Miller has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.