Shares of Lucid Group (LCID) experienced a notable increase on Wednesday. The luxury electric vehicle (EV) manufacturer’s stock rose by 3.3% as of 2:47 p.m. ET, with a peak increase of 9.9% earlier in the day. This surge occurred while the S&P 500 and Nasdaq Composite indices fell by 0.5% and 0.2%, respectively.
Reports indicate that Lucid is garnering increased interest from former Tesla owners as the company begins production on its second vehicle.
In an interview, Lucid’s interim CEO, Marc Winterhoff, disclosed that there is a rising interest from Tesla owners seeking alternatives. He remarked that Tesla buyers have historically been a source of Lucid’s sales since they are accustomed to electric drivetrains and are often on the lookout for something superior. Winterhoff made these comments following an event showcasing the Gravity SUV, Lucid’s latest model, at the company’s showroom in New York City.
Lucid might avoid the impact of President Trump’s new tariffs, as well as existing tariffs on auto parts, which have negatively affected many automakers’ stocks. The company might evade the majority of these trade levies since most of its manufacturing occurs within the U.S. This situation is somewhat similar for Tesla, suggesting that the advantage may be more applicable over traditional manufacturers rather than direct competitors.
Despite the positive outlook, Lucid faces significant challenges. The Gravity SUV has a starting price of $79,900, which positions its market as relatively niche. The company needs to develop a vehicle that is more affordable to a broader market segment to achieve sales growth.
Additionally, Lucid continues to operate at a loss. Concerns remain regarding whether the company can reduce costs sufficiently to produce the earnings necessary to justify its current stock price.
Johnny Rice, the author, has no position in any of the mentioned stocks. The Motley Fool also holds no positions in any of the stocks cited, adhering to their disclosure policy.
