Tesla Model S.
Head-to-head with the big pet dogs
Lucid Motors intends to redefine the high-end EV market, starting by straight contending with the Tesla Model S. And when you compare the newbie with the present leader, Lucids metrics are impressive. The table listed below shows the specs of the two automobiles, with the remarkable metric highlighted.
Tesla (NASDAQ: TSLA) has actually accomplished a significant first-mover benefit in electrical cars– but as the demand for EVs grows, so does competition. One EV rival that should have more detailed analysis is Lucid Motors, currently preparing to go public through a merger with the SPAC Churchill Capital IV (NYSE: CCIV). Lucids efficiency and cost superiority over Tesla could reward early financiers with multibagger returns over the next decade.
Lucid Motorss Air EV intends to take on Tesla. Source: Lucid Motors.
Charge Time (miles/minute).
0-60 miles per hour (seconds).
Source: Lucid Motors and Tesla website.
As seen above, the Lucid Air wins in five out of the 6 classifications; it drives further, more efficiently, with faster charging. The innovation driving that outperformance– safeguarded by 403 filed patents, 80% of which have actually already been granted– could permit Lucid to get market share on the lesser-performing Model S..
Lucid Motors appears to be imitating Teslas early phase implementation technique by coming to market pre-production, with one model and a plan to expand. Lucid still has some ground to make up on production, compared to the 500,000 cars Tesla produced in 2020. Lucid Motors is expected to begin production in Spring 2021, with a center capable of eventually turning out 365,000 vehicles annually at complete capacity.
In addition to its obvious efficiency and expense superiority, Lucid Motors currently has 8 executives that utilized to operate at Tesla. Most significantly, this consists of CEO Peter Rawlinson, who was Vice President of Vehicle Engineering and Chief Engineer of the Model S during his time at Tesla, which ended in 2013. That provides advantageous insight into the other groups playbook and how it operates..
Comparing all of those numbers with the incredible market cap Tesla has actually achieved, it would be sensible to estimate that at a roughly $50 billion market cap, Lucid Motors has plenty of opportunity to claim some market share away from Tesla.
A rough journey with a high-end destination.
These numbers paint an alluring photo, but there are some products to keep in mind. Because it has yet to commercially produce any cars to date, Lucid Motors keeps a high market evaluation.
The CCIV SPAC dropped approximately 50% just recently as part of a much larger innovation stock pullback, with the Nasdaq as a whole dropping double digits, That sell-off likely brought the combined future businesss assessment closer to reality. However even with the current price decrease, Lucid Motors currently has no car production revenue, that makes valuation difficult.
Aside from the vehicle pre-production, Lucid hasnt eliminated other potential growth markets, such as supplying energy storage systems, or selling in-house innovation for military, agricultural, and heavy equipment functions. This uses a type of prospective optionality in the stock to grow further in the EV market. There may be a restricted market for EVs currently, however as ecological policy expands, so will prospective market show global ramifications..
Lucid Motorss valuation is based solely on potential, however it is worth a starter position if you can manage volatility. Lucid might never ever become the $635 billion company Tesla is, but that doesnt interfere with its potential to be a market-beating multibagger. Even with stiff competitors in an increasingly crowded market, Lucid has the opportunity to interfere with the future of EVs through a combination of both luxury and efficiency over the next decade for financiers going to go along for the trip.
Lucids efficiency and price superiority over Tesla could reward early financiers with multibagger returns over the next years.
Lucid Motors seems to be mimicking Teslas early stage release method by coming to market pre-production, with one model and a strategy to expand. Lucid still has some ground to make up on production, compared to the 500,000 vehicles Tesla produced in 2020. In addition to its apparent performance and expense superiority, Lucid Motors presently has 8 executives that used to work at Tesla. Lucid may never ever become the $635 billion company Tesla is, but that doesnt detract from its prospective to be a market-beating multibagger.
This short article represents the viewpoint of the author, who might disagree with the “main” suggestion position of a Motley Fool premium advisory service. Were motley! Questioning an investing thesis– even among our own– helps us all believe critically about investing and make choices that assist us end up being smarter, happier, and richer.