Despite a valuation pop today, Lucid stock is still down 47% in 2024.
Lucid (LCID 7.42%) stock is making big gains in Friday’s trading. The electric vehicle (EV) company’s share price was up 6.5% at 1:30 p.m. ET and had been up as much as 11.5% earlier in the day’s session.
Lucid stock is climbing today following the company’s announcement on X that the production of its Gravity SUVs had begun. Despite today’s valuation pop, the stock is still down roughly 47% year to date.
Lucid stock gets a lift from Gravity production
Production on Lucid’s Gravity SUVs has started at the company’s manufacturing plant in Arizona. The Gravity is the company’s first electric SUV. It offers more than 440 miles of travel range from a single charge and seats up to seven passengers. The push into the luxury EV market represents an important growth opportunity for the company, and investors will be watching to see how much demand there is for the new vehicle.
What’s next for Lucid?
Lucid stock posted an operating loss of $770.5 million on revenue of roughly $200 million in the third quarter. The company produced 1,805 vehicles and delivered 2,781 vehicles in the period and closed out the quarter with cash and equivalents totaling roughly $1.89 billion. The company went on to raise an additional $1.75 billion in funding.
Even with the business using cash fast, Lucid should have enough funding to continue operating into 2026 without the need to raise additional capital. On the other hand, demand for the company’s vehicles has come in weaker than anticipated over the last couple of years — and that raises questions about the company’s plans to scale up its business.
Lucid’s path to profitability hinges on increasing vehicle demand and production to the point where the company can benefit from economies of scale and see production costs per unit decline. The launch of the Gravity SUV represents an important step in the company’s strategy, and deliveries for the vehicle will be under the microscope over the next year.
Keith Noonan 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.
