Whether Tesla CEO Elon Musk is working full-time at his electronic car company or not, smaller rival Lucid faces an existential challenge. It is one the smaller company is bound to lose. Lucid, for the gamblers who own its shares, may not be part of the EV future–at least not in its current form
Musk’s rivals all hope that his fascination with Twitter will mean he takes his eye off Tesla. His eye has been off it for some time, as he focuses on projects, particularly SpaceX. Dozens of car companies, both large and small, have been chasing Tesla for years. None has gained on it. The only real competition in the market now is the Ford F-150 Lightning. Ford has millions of earlier F-150 models on the road, which gives it a built-in market. However, the F-150 faces supply chain challenges and the question of whether Ford can produce advanced car software systems. Investors have not given Ford a vote of confidence. Its shares are down nearly half from their 52-week high.
Lucid is a development stage company posing as a car manufacturer. In its most recent quarter, it sold 360 vehicles and brought in revenue of $57 million. In Tesla’s most recent quarter, it delivered over 300,000 cars.
Lucid says it will make 12,000 to 14,000 vehicles this year. It missed its last estimate. Supply chain problems could drop this number again. Certainly, management’s ability to predict production has been called into question.
Another hurdle Lucid faces is the level of quality of its cars. Too few are on the road to determine whether they will have hardware or software problems. Every manufacturer has these. Will Lucid be modest or substantial?
Lucid faces the fate many niche car companies are up against in an EV future. It competes with every large car company in the world. And it competes against Tesla. Its stock has fallen from a 52-week high of $57.75 to $18. Is it any wonder?
Sponsored: Find a Qualified Financial Advisor:
Finding a qualified financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to 3 fiduciary financial advisors in your area in 5 minutes. Each advisor has been vetted by SmartAsset and is held to a fiduciary standard to act in your best interests. If you’re ready to be matched with local advisors that can help you achieve your financial goals, get started now.