Lucid Is Shifting Into Higher Gear. Is the Stock a Buy Now?

If you've been following the electric vehicle (EV) industry, it's been an interesting ride so far. Some global markets are exploding much faster than North America, especially when you look at China, where recent monthly EV sales accounted for more than 50% of new vehicle sales. Lucid (NASDAQ: LCID) in particular has captured momentum, seemingly at the expense of rival Rivian, but is it a buy for long-term investors?

What have you done for me lately?

Lucid has an unfortunate trend in its short history of disappointing investors with its production hiccups, delays, and lower-than-expected deliveries. That said, management has quietly overcome those speed bumps and turned in three straight quarters of record deliveries.

In fact, with Lucid hitting three consecutive quarterly records for deliveries, the company has now let consumers take the wheel of over 7,100 Lucid EVs in 2024, already easily topping the company's 2023 total of 6,001 deliveries.

Despite the company's delivery momentum, which will only increase with the Gravity now officially on sale, its stock price has been stuck in reverse -- even when compared to rival Rivian, which posted a disappointing third-quarter delivery result due to a production snag of its own.

RIVN data by YCharts.

Stuck in reverse?

Lucid's momentum with three quarters of record deliveries was essentially offset by a mixed third-quarter result and the announcement that the EV maker plans to sell more than 262 million shares in a public offering. If completed, the offering will also sell nearly 375 million shares to its majority shareholder, Saudi Arabia's Public Investment Fund (PIF), which only furthers the company's ties to Saudi Arabia. https://ir.lucidmotors.com/news-releases/news-release-details/lucid-group-inc-announces-public-offering-common-stock-and-0/

It's fair for investors to say this is expected, as we largely recognize these young EV makers will likely have to raise capital again before the companies become self-sustaining. It's also fair to note that Lucid's shareholder dilution is noticeable compared to Rivian, as a similar example.

RIVN Shares Outstanding data by YCharts.

Is Lucid a buy now?

The silver lining is that the company's delivery momentum is poised to continue moving forward. That's because the company's Gravity EV SUV recently went on sale and will start contributing to deliveries in the near term. The execution of the Gravity launch and following production ramp-up will be needed for a strong finish to the year and to start 2025 with sales momentum. There's also a lesser-known step after the Gravity. Lucid plans to launch a midsize crossover priced lower than $50,000, before shipping, in about two years' time.

The global EV industry seems to have an incredibly bright future as the world transitions from gasoline-powered vehicles to EVs, but early investors have to understand how speculative and risky these stocks are currently. Just take a glance at Fisker's bankruptcy mess.

Lucid's current delivery momentum isn't enough to make it a buy now, but it is enough to place Lucid on your watch list as the company drives through speed bumps, expands its vehicle lineup, cuts costs, and tries to position itself as one of the top EV players in an expanding industry. The company's stock price is hovering just above all-time lows and offers an intriguing entry point for investors willing to accept the risk of owning Lucid. For those willing to take that risk, companies like Lucid should still round out a smaller position of your overall portfolio.

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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.