Lucid Group (LCID) Pulled off a Very Successful Market Debut, at Least by One Important Metric
Lucid Group (NASDAQ:LCID), the manufacturer of the ultra-luxury Lucid Air EV, has finally debuted on the NASDAQ Stock Exchange following a successful merger with the SPAC Churchill Capital Corp. IV (CCIV). Even though the stock’s price movement has been relatively tepid since this seminal event, the public flotation proved to be a resounding success, at least by one very important metric.
— Tornike LAGHIDZE (@TornikeLaghidze) August 2, 2021
As is evident from the tweet above, Lucid Group investors only redeemed 21,644 shares, corresponding to just 0.01 percent of the eligible shares. By this metric, the company pulled off the second most successful SPAC merger target debut in July. As a refresher, SPAC investors usually redeem their shares for a fixed price ahead of the consummation of the merger agreement if the percolating perception is one of doom and gloom. The fact that a negligible proportion of SPAC shares were redeemed ahead of Lucid Group’s public flotation suggests continued and vigorous investor faith in the company’s prospects.
Of course, the initiation of Lucid Air deliveries will mark the next very important impetus for further stock price gains. As a refresher, Lucid Group had announced last month that it remained on track to start delivering the new units of the much-anticipated EV in H2 2021. Given that the company has already built dozens of quality validation builds as part of its ongoing final testing phase, the deliveries are expected to commence within a matter of weeks. Moreover, as per Lucid Group’s investor call in July, the Air EV is currently undergoing EPA testing in order to validate the vehicle’s claimed range of over 500 miles on a single charge.
Bear in mind that the Lucid Group currently has over 10K reservations for the Air EV and expects to deliver at least 20K units to the North American and EMEA markets in 2022, with deliveries to China commencing by 2023. Moreover, the Lucid Gravity SUV is now slated to launch in H2 2023. The company is also prioritizing $350 million in CAPEX for 2021-2023 in order to add 2.7 million square feet of additional manufacturing space at its Arizona facility for production ramp-up.
As far as its product penetration strategy is concerned, Lucid Group believes that its annual volume would touch 500,000 units per annum by 2030, corresponding to a 4 percent share of the overall EV market. Additionally, during this decade, Lucid aims to retail 1.7 million units of the Air EV and 1.5 million units of Lucid Gravity, based on the overall luxury EV market expanding at an annual pace of around 5 percent.