Title: A Can't-Miss Electric Vehicle Investment with a $200 Budget
Investing in electric vehicle (EV) stocks like Lucid Group (LCID 1.34%) could yield substantial returns, even with a modest starting budget of $200. Despite a market cap of over $10 billion, the company still has immense growth potential.
The EV market in the United States is poised for expansion, with just 7% of total car sales currently electric. Even though the percentage has decreased from a peak of 8%, it's still significantly higher than 2018's 1%. Analysts predict that this trend will continue, with 2026 marking a turning point and up to 25% of car sales in the U.S. being electric by 2030.
Lucid sits well in this growing market, growing its sales by roughly 70% year over year in the last quarter, following an approximately 90% increase the quarter before. By 2024, analysts expect companywide sales to hit $778 million, with a massive 118% increase expected for 2025.
Lucid's Air sedan and its new Gravity SUV, both priced between $70,000 and $100,000, are driving this momentum. Despite not being able to tap into the mass market just yet, Lucid has already achieved $1 billion in annual sales with its high-end models.
Keep an eye on Lucid's quarterly earnings on Feb. 25, specifically the gross margins. The increasing premium valuation of Lucid, already 10 times its sales, calls for heightened scrutiny of the company's profitability. Especially as analysts anticipate its gross margins to trend closer to where Rivian, another EV company, currently is.
Enrichment data highlights Lucid's impressive growth, with record deliveries of 3,099 vehicles in Q4 2024, an 11% increase from Q3 2024, and its fourth consecutive quarter with record EV deliveries. This growth has been driven by price cuts, cheaper financing options, and the success of its luxury models. However, despite these impressive growth figures, Lucid's profitability remains a concern, with losses on vehicles and high research and development investment leading to weak margins.
In light of the growing EV market in the United States, investing money in finance-related opportunities like Lucid Group could potentially generate substantial returns, considering its market potential and significant growth. To maintain its premium valuation, Lucid Group should focus on improving its gross margins, similar to what Rivian has achieved, to enhance its profitability.