What took set apart
Lucid stock benefited from a Tesla press launch the ensuing investor bullishness over electric car stocks the day gone by — nevertheless this day is a assorted memoir.
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On Monday Tesla announced that it delivered 308,600 electric vehicles in the fourth quarter of 2021, and 936,172 EVs in all of 2021, crushing analyst predictions on every counts. And whereas that also can sound esteem unbiased appropriate-looking out appropriate news for the reputation of EV stocks in general, it might perhaps perhaps even in truth most efficient be appropriate news for Tesla stock in explicit.
Snatch into consideration: Last quarter, Lucid reported losing $524.4 million on lower than $1 million in revenue as it struggled to ramp up production. On the one hand, Lucid says it has 17,000 preorders for its electric vehicles. On the opposite hand, the very fact that it must make investments in production to meet these orders methodology that Lucid will perhaps be losing cash for slightly a whereas. (Per analysts polled by S&P Worldwide Market Intelligence, that is also losing cash on the very least through 2024.)
In inequity, Tesla is every rising production and earning a profit whereas doing it — lots profit, in truth, that Elon Musk says he would not even want authorities subsidies anymore, and that “all subsidies must be eradicated.”
With every passing quarter, Tesla is racing forward to seize more and more EV market share, whereas Lucid is level-headed struggling to regain out of the gate. Although I own not judge we can write Lucid off on this jog staunch but, the longer it takes to ramp up production, the more dominant a rival Tesla goes to turn out to be.
The aspect motorway forward will not be always in truth the least bit definite for Lucid — and I will not remark that the investors selling Lucid stock this day are nefarious to attain so.
This article represents the idea of the author, who also can disagree with the “reliable” recommendation set apart of a Motley Idiot top class advisory provider. We’re motley! Questioning an investing thesis — even one of our have confidence — helps us all judge critically about investing and regain choices that support us turn out to be smarter, happier, and richer.
Rich Smith has no position in any of the stocks mentioned. The Motley Fool owns and recommends Tesla. The Motley Fool has a disclosure policy.”>