Let's take a look at what was driving this luxury EV maker's surge in deliveries in the first quarter.
The narrative around electric vehicles (EVs) has flipped faster than you can flip a pillow. The industry has gone from potentially overhyped and full of optimism that EVs are about to go mainstream to stagnant sales growth, struggling charging infrastructure, and lack of affordability to drive demand. changed to today's narrative of lack of choice.
Despite the doom and gloom around them, investors lucid group (LCID -5.66%) Great news came as the young EV startup announced its first quarter vehicle deliveries. Let's take a closer look at that news and whether it's a good time to buy the stock now.
In terms of numbers
There hasn't been much good news for EV investors to digest lately. Still, Lucid reported a 40% year-over-year increase in deliveries in the first quarter of 2024. Lucid also liquidated some inventory, as it delivered 1,967 Air sedans while producing only 1,728 of his in the first quarter.
Deliveries in the first quarter also increased by 13% quarter-over-quarter, compared to a total of 1,734 vehicles in the fourth quarter of 2023. According to Bloomberg, Lucid's first-quarter results far exceeded Wall Street expectations, with deliveries of just over 1,800 vehicles.
One of the drivers of Lucid's surge in deliveries was February's price cuts. Lucid lowered the price of his mid-February Air Pure trim by $7,500, bringing the starting price to about $70,000. Lucid also lowered the price of the luxury version of its Air sedan, but also offered lease deals and incentives to entice consumers in April.
In addition, Lucid is offering a $5,000 discount on select in-stock items and a $1,000 credit towards device charging. The company is determined to offset weak demand with more competitive pricing, as the high-end market for EVs is saturated.
Should you buy Lucid now?
Lucid's 40% year-over-year increase in deliveries is good news for investors, but that's not the only reason to jump on a stake in the young EV maker. But delivering more vehicles and generating more revenue will give investors confidence that the company can advance to the next stage of the race.
That could get even more interesting for investors, as Lucid plans to launch a Gravity crossover this year, which could open the door to a new and broader consumer base. That becomes important. Another aspect of the competition is the company's plans to launch a new “midsize” platform that will offer a vehicle that will compete with Tesla's Model Y and Model 3, the best-selling EVs in the U.S. market.
Lucid's surge in first-quarter deliveries doesn't make it a stock to start a position in now, especially since this year is going to be tough for the cash-strapped young EV maker. But if Lucid can remain competitive on price, grow sales as the broader EV industry slows, and perfectly launch its Gravity crossover, this year could be better than expected for Lucid investors. It could be a year.
Daniel Miller has no position in any stocks mentioned. The Motley Fool has no position in any stocks mentioned. The Motley Fool has a disclosure policy.
