Why Lucid Group Popped 71% In January
Shares of Lucid Group (NASDAQ: LCID) rose 71.2% in January, according to data from S&P Global Market Intelligence. The luxury electric vehicle (EV) brand posted strong production growth in the fourth quarter, which has gotten investors bullish about the stock's prospects. It was undoubtedly helped by the recent resurgence in growth stocks to start out in 2023. For example, as of this writing, competitor Tesla (NASDAQ: TSLA) is up 76% year to date.
On Jan. 12, Lucid Group updated investors on its production numbers for the fourth quarter of 2022. The EV manufacturer hit 3,493 vehicles produced in the fourth quarter, up from less than 500 last year and up 53% from Q3 of 2022. That performance puts the company ahead of its previous guidance for producing 6,000-7,000 vehicles last year.
Global automotive giants such as Ford and Toyota have to produce millions of vehicles a year to maintain profitability. But that's not the case for Lucid Group because it sells luxury vehicles at an initial selling price of $138k or more. With high price points, each car Lucid Group sells will generate more profits, which in turn means it needs to sell fewer overall vehicles to achieve positive net income and cash flow. Investors in Lucid Group probably took this production beat as a sign the company is making good progress in achieving this positive cash flow.
Source Fool.com
