Lucid Stock at $5: A Steal, or No Deal?

As the electric vehicle (EV) race heats up, Tesla (NASDAQ:TSLA) is clearly in pole position, but a slew of start-ups are vying for second place. Among the most talked-about contenders is Lucid Group (NASDAQ:LCID), a California-based EV manufacturer with international ambitions.

Unfortunately for Lucid and its stockholders, ambitions don't always translate to share-price appreciation. With Lucid's future being anything but lucid, enterprising investors are left to determine whether this clean-energy-vehicle upstart is on the right track -- or about to crash and burn.

Making waves abroad

While Lucid certainly doesn't have Tesla's global brand-name recognition, the company can claim to have multinational operations. This is crucial, as the U.S. hasn't necessarily been the first or fastest region of the world to join the vehicle-electrification movement.

Europe stands out as an early adopter of new-energy vehicles, and a crucial collaboration will evidently allow Rivian (NASDAQ:RIVN) to gain a foothold in this ripe region. Specifically, e-commerce giant Amazon (NASDAQ:AMZN) chose Rivian to build and deliver thousands of electric package-delivery vans to be deployed in Europe over the coming years.

According to Rivian's press release, Amazon "aims to have 100,000 electric delivery vehicles from Rivian on the road globally by 2030." This past summer, "thousands of" Rivian-built electric vans were already on Europe's roadways, "including more than 1,000 electric vans in Germany."

Of course, Amazon is a powerful partner to have, and Rivian might establish itself as the go-to delivery-van specialist in the EU. Yet, that's not the only region of the world where Rivian could find its footing in the 2020s.

Heading over to the Middle East, Rivian recently commenced production of its Air-model vehicles in Saudi Arabia. I know what you might be thinking. Saudi Arabia is known for producing fossil fuels, not clean-energy vehicles.

I understand that thought, but according to the press release, Lucid is supporting the "Saudi Green Initiative's imperative to ensure 30% of new car sales in the Kingdom are electric by 2030." Thus, believe it or not, Saudi Arabia might just be the ideal place for Lucid to manufacture thousands of new EVs.

Indeed, Lucid might someday become the Tesla of Saudi Arabia. Currently, the automaker's Saudi-based mega-factory can produce 5,000 vehicles per year. At some point, it expects to be able to produce 155,000 per year at that factory.

Lucid finally joins the EV price war

With multiple EV price cuts, Tesla famously started a war that continues to this day. Reluctantly but necessarily, Tesla's rivals have offered price reductions of their own, and Lucid is no exception.

The best way to describe Lucid's EVs is "powerful but pricey." It's not unheard of for a Lucid Air model to top $100,000, which is unaffordable for many Americans, even if they take advantage of the available EV tax incentives.

Undoubtedly in response to Tesla's price reductions, Lucid finally introduced an EV that's affordable -- or at least, more affordable. I'm referring to the Lucid Air Pure Rear-Wheel Drive (RWD), which has a starting price of $77,400.

You may have shopped for a brand-new car and discovered that a so-called "starting price" isn't really what you'll end up paying for the vehicle. When all is said and done, I suspect that a buyer would have to spend considerably more than $80,000 to drive off the dealer's lot with Rivian's new EV model.

However, even cut-rate luxury comes at a price. As Lucid's press release proclaims, the new Air Pure RWD "has 410 miles of range, more than any electric car currently available besides other Lucid Air models." Additionally, drivers on the go can add "up to 150 miles" of range "in less than 12 minutes with DC fast charging."

Lucid stock drops to a new low

Despite the aforementioned seemingly bullish catalysts, Lucid stock plunged to exactly $5 on Oct. 17. To provide some context, this is a stock that broke above $55 not just once, but twice in 2021.

To me, the relentless share selling seems overdone. Perhaps the market wasn't too impressed with Lucid's disclosure that it had produced "1,550 vehicles during Q3, plus over 700 additional vehicles in transit to Saudi Arabia for final assembly." Lucid also revealed that it delivered 1,457 EVs in the third quarter.

Admittedly, this pales in comparison to Tesla's production and delivery numbers. However, it should again be emphasized that Lucid and dozens of other EV makers are really competing for second place, not first.

At the very least, LCID stock at $5 offers an intriguing risk-to-reward proposition. It's starting to feel like there's nowhere to go from here but up.

All it would take is some positive news, and it wouldn't have to be from the U.S. Eventually, Lucid might find fame and fortune in Europe or Saudi Arabia or both regions. Hence, I encourage investors to consider a small, speculative stake in Lucid stock as a wager on what might be the "next Tesla" -- or even the "first Tesla" -- somewhere in the world.

Source valuewalk