Shares of electric vehicle start-up Lucid have taken a hit after a Wall Street analyst expressed concerns over the demand for its cars. Chris Pierce from Needham downgraded Lucid shares from Buy to Hold, citing reservations about demand despite acknowledging the company’s technological advantage and positive reception of their recently unveiled Gravity SUV.
The Gravity SUV marks Lucid’s second model after the Air sedan and made its debut at the L.A. auto show in November. Boasting an impressive estimated range of 440 miles on a single charge, the Gravity SUV is priced at around $80,000, making it more exclusive in a relatively small market segment.
During the first three quarters of 2023, Lucid managed to deliver approximately 4,300 Air Sedans, which have a price tag exceeding $100,000. The company’s technology stands out due to its high range per charge, and it has even licensed its technology to other electric vehicle manufacturers, establishing itself as an auto supplier to the EV industry. However, Pierce doubts that this alone can support the company’s valuation.
Ahead of Monday’s trading session, Lucid stock had experienced a downward trend of about 57% over the past year. Rising interest rates and decreasing demand for electric vehicles have dampened investor enthusiasm for start-up EV makers that have yet to turn a profit.
Currently, only one analyst rates Lucid shares as Buy – approximately 7% of those covering the stock. In comparison, the average Buy-rating ratio for stocks in the S&P 500 stands at around 55%. The average analyst price target for Lucid is $5.30. A year ago, 33% of analysts covering the stock rated shares as Buy, with an average price target of $16.60 per share.
