You’ll be able to’t blame a Lucid Group (LCID 2.87%) investor for sighing loudly in the course of the fourth-quarter convention name. After years of largely disappointing traders with manufacturing hiccups, earnings misses, delays, and different developments, Lucid lastly had actual constructive momentum in 2024.
So, in fact, Lucid would cap off the yr with a powerful fourth-quarter outcome, solely to abruptly announce that CEO Peter Rawlinson is stepping down. Let’s check out the state of affairs and whether or not it ought to change a Lucid investing thesis.
What is going on on?
Lucid introduced not too long ago that former CEO Peter Rawlinson would step down and that the corporate’s chief working officer, Marc Winterhoff, would take over as interim CEO. Rawlinson continues to be concerned to a point and can function a “strategic technical advisor to the chairman of the board,” based on Lucid.
“It was Peter’s resolution after 12 years of, for instance, day by day grind or day by day actions and bringing the corporate the place it’s at this time … that it’s time to step apart and cross the baton,” mentioned Winterhoff, based on CNBC.com.
It is actually an sudden improvement from one of many firm’s largest shareholders and one who drove taking Lucid public by a reverse merger with a particular objective acquisition firm in 2021.
Large deal or no deal?
It is easy as an investor to imagine the worst, or to assume that Rawlinson’s stepping down alerts some behind-the-scenes dumpster fireplace — however let’s not panic. There are a lot of causes that may very well be driving his departure, and never all of them are doom and gloom.
That mentioned, it is honest to criticize the timing contemplating 2025 is poised to be a giant yr for Lucid. The corporate has posted 4 consecutive report quarters for deliveries and totaled 10,241 for the yr — a 70% improve from the prior yr. It is taking that momentum into 2025 when the corporate plans to ship 20,000 autos, virtually double 2024’s complete.
One purpose for the massive soar in deliveries is clearly the corporate’s second automobile, the Gravity EV SUV. Deliveries of the Gravity hit the highway early in 2025 and Lucid plans to step by step ramp up manufacturing all through 2025, persistently pushing complete deliveries larger. It is also a giant deal as a result of the corporate famous that 75% of Gravity orders are new to the model, suggesting it isn’t simply former Air automobile house owners buying and selling over to the brand new SUV.
Past the Gravity, Lucid can also be growing a brand new mid-sized platform used to underpin three autos. A kind of three has already been teased and is anticipated to take the identify Earth and begin with a price ticket round $48,000. Manufacturing is not anticipated to reach till late 2026, however the three upcoming autos will likely be important to the corporate’s effort to tackle Tesla‘s dominant market share.
Time to promote?
Rawlinson’s resolution to step down, with what we all know up to now, is not a purpose to promote Lucid inventory. That will be a extreme knee-jerk response, and people typically aren’t money-making strikes. For Lucid traders, it is way more necessary to deal with the corporate’s huge 2025 and future midsize platform as a result of these autos might change the narrative round Lucid’s future development completely.
Daniel Miller has no place in any of the shares talked about. The Motley Idiot has positions in and recommends Tesla. The Motley Idiot has a disclosure coverage.
