A bit of good news for lucid investors

It’s been a wild ride for investors Clear (LCID 3.87%)They spent the electric vehicle (EV) maker’s early history being disappointed by, among other things, production and delivery numbers.

But at a time when rivals like Rivian While deliveries have stalled, Lucid has managed to put together a handful of impressive quarters. There is more good news for investors this week.

What’s up

Lucid will officially begin taking orders for its second vehicle, the Gravity Crossover, on November 7th. The selection starts with the high-end Grand Touring version, which the company says will be priced at nearly $95,000 before delivery.

That’s important for investors because the much-hyped sub-$80,000 Gravity Touring trim, which investors hope will help reach more mainstream consumers and increase sales volumes, doesn’t arrive until late 2025 Production will begin.

Accordingly Automotive NewsRobby DeGraff, analyst at AutoPacific, said: “While it is of course not uncommon for a start-up or even a legacy automaker to launch the most expensive trim of a new electric vehicle first in order to recoup development costs, it will be interesting. “to see what the take rate is at almost $100,000.”

That means investors hoping for an immediate increase in sales and deliveries (and there should still be a noticeable increase) will have to be patient as the automaker works toward a cheaper version. That’s not necessarily a bad thing, because if the company ramps up production gradually, it will have time to get the quality and production in order before moving on to higher volume equipment.

To understand how much this vehicle means to investors, consider that management predicts the potential market for the Gravity crossover will be six times larger than that for the Air sedan.

The path ahead

Lucid has had a solid 2024, selling more electric vehicles in the first three months of the year than in all of 2023. The company posted three consecutive quarters of record deliveries.

Still, the news isn’t all positive for investors as the company prepares for its third-quarter earnings report. According to financial data firm FactSet, management said it expects a larger-than-expected operating loss for the third quarter: between $765 million and $790 million, higher than the $752 million loss analysts expected.

But long-term investors can take the third-quarter report with caution. More important to them is the company’s plan to launch a midsize crossover in about two years, priced under $50,000 before delivery. For now, it’s just a bit of good news that orders for Gravity are coming soon. If management can ramp up production, investors should expect a solid 2025.