Investing

This EV Company Could Become a Penny Stock

hapabapa / iStock Editorial via Getty Images

Lucid, the worst run of all the EV companies, now trades as a penny stock, which means it has a price of under $5. Its current share price is $3.80, The shares are down 70% in the last year.

Why such a severe stock price drop? First, a cardinal sin. Lucid said it would produce 10,000 vehicles this fiscal year. It changed that figure to 8,000-8,500 a few days ago.

Revenue for the most recent quarter was $137 million, down from $195 million in the same quarter the year before. The loss from operations was $752 million compared to $687 million in the same quarter a year ago. Some investors do not think Lucid has enough cash and short-term investments to break even. Others think it will never break even no matter how much cash it has.

Lucid’s cars are ridiculously expensive. At $77,000, the vehicles are too costly, particularly when many Teslas cost less. Tesla has a powerful brand to drive sales, but Lucid does not. Tesla will be in business to repair and maintain it cars. Lucid may not be.

Lucid is also caught in the current EV trap. People do not want electric cars. Their ranges are too short. There are too few chargers. They take too long to charge.

In sum, the belief that Lucid is a viable business has disappeared.

Also read: 13 Biggest Electric Vehicle Business Failures in American History

URGENT – New Seats Available (sponsored)

Top financial advisors are now accepting new clients for 2024! Finding the right advisor can be the difference between retiring early, or working forever. Don’t waste a moment matching with the right advisor for you. Every moment today can mean riches tomorrow, with the right advisor by your side.

Use the advisor match tool below, or click here now, to find your financial freedom!

Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.