Lucid Group, Inc. LCID fell over 5% on Tuesday after the manufacturer of premium electric vehicles reported third-quarter deliveries that missed expectations. Tesla investor and Future Fund Managing Partner Gary Black offered his take on the numbers.
What Happened: Lucid could only muster deliveries of 1,457 EVs in the third quarter despite its huge ad spending, said Black in a post on X, formerly Twitter. The consensus number was at 2,118, he said.
Year-to-date, the company has produced 6,037 units, and if the 700 EVs the company has shipped to Saudi Arabia for final assembly were included, the production tally is 6,737 units. Deliveries so far this year totaled 4,367 EVs.
Lucid has guided to production of over 10,000 units for the year and this leaves the company with a tall target of 3,263 units to meet for the final quarter of the year.
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More Pain Ahead For Stock: Black sees the possibility of Lucid reducing its 2023 production yet again to 9,000 units when it releases its earnings on Nov. 7. He also expects sell-side analysts to reduce their delivery guidance to around 6,000 units.
Lucid stock will likely fall to around $3, based on Rivian’s valuation multiple and the estimated 2023 revenue of $650 million for Lucid, the fund manager said. Adding $2.9 billion in net cash and taking into account 2.3 billion in fully diluted shares will give cash per share of $2.20, he said.
The Newark, California-based EV maker’s stock has been bouncing around the bottom in recent sessions, reflecting its fundamental woes. On Tuesday, the stock settled at $5, down 5.30%, according to Benzinga Pro data. Intraday, it fell to a low of $4.90, slightly off the record low of $4.87 it hit on Oct. 9.
“LCID biggest negative is a failed product strategy focused on the over $100K sedan segment, which is tiny and shrinking,” he said, adding “No amount of advertising can overcome a bad product strategy.”
“We have been and remain short $LCID,” Black said.
Price Move: Lucid shares are down about 27% year-to-date compared to a more modest 4.5% decline by the KraneShares Electric Vehicles and Future Mobility Index ETF KARS.
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