State of electric vehicle stocks — Lucid Motor tumbles

In 2021, electric vehicle (EV) stocks fell out of favor and the once hyped EV maker, Lucid Group, is falling even lower.

Yesterday, early Lucid investor lockups expired — allowing them to sell their stock — sending Lucid down 11%.

What’s the big deal? Lucid Motors was supposed to be the luxury EV company to challenge Tesla’s dominance. In Jan, investors sent Churchill Capital’s SPAC up over 500% purely on rumors of taking Lucid Motors public.

• After Churchill confirmed those rumors, the SPAC cratered 60% in the following weeks.
• Like many other EV stocks, Lucid’s stock has traded sideways for the year and is down 25% in the past month.

Lucid, which has $700m in potential pre-orders, hasn’t delivered any vehicles yet but expects to begin deliveries in the second half of 2021 — although previous targets were pushed several times.

Here’s what could get in the way of those deliveries: a chip shortage — the cause of supply chain issues with other carmakers.

EV stocks aren’t cheap: The top 3 electric vehicle makers have a combined $840b market cap — Tesla ($740b), NIO ($65b), XPeng ($35b). With future growth already priced in and a lack of catalysts, their stocks could continue to trade sideways in the near term.

Look elsewhere: Those looking for cheaper EV plays might want to try the commercial EV vehicle market.

• Arrival (NASDAQ:ARVL), valued at $7.5b, is developing electric busses with $1.2b in pre-orders.
• On the smaller end with a $656m market cap, Lightning eMotors (NYSE:ZEV) is up 36% in the past month after striking a deal to manufacture school busses for Colins Bus.

And don’t look here… Last week, EV truck maker, Rivian, filed to go public at a potential eye-popping $80b valuation.