It’s been an fascinating journey for buyers of California-based electrical automobile producer Lucid Group (NASDAQ:LCID), to say the least. Clear power automobile shares are recognized to be risky, however LCID inventory has been significantly susceptible to whipsaws in each instructions.
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Nonetheless, there’s an previous saying to keep in mind: nothing ventured, nothing gained. Investing in Lucid is dangerous, and can check your dedication to the continued EV revolution.
This isn’t to say {that a} place on LCID inventory is predicated solely on religion. For one factor, Redburn analyst Charles Coldicott expects the worldwide EV market to develop by “as much as 10x by 2030,” which after all can be bullish for Lucid.
Coldicott assigned a $39 value goal for the inventory, by the best way. May the share value truly get there? That’s the billion-dollar query, so let’s begin off now with some technical evaluation.
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A Nearer Have a look at LCID Inventory
The current downturn in LCID inventory could also be disconcerting, but it surely’s not essentially Lucid’s fault particularly.
Bear in mind, Lucid is a member of the Nasdaq, and Wall Avenue began to rotate out of know-how shares in November of final yr. And, simply as a rising tide lifts all boats, a falling tide can sink all boats.
Lucid didn’t encounter any significantly unhealthy company-specific information in November. But, LCID inventory began to say no from its $60 resistance stage nonetheless.
It’s fascinating, from a technical standpoint, that this inventory additionally encountered resistance at $60 again in February 2021. Due to this fact, that’s a reasonably good place for Lucid’s shareholders to think about taking earnings.
LCID inventory was holding regular in mid-February at $29, so the worst of the drawdown could also be within the rearview mirror. As for Coldicott’s $39 value goal, it may simply be reached inside the subsequent couple of months if buyers lastly stop beating up on the Nasdaq.
The President Makes It Evident
To ensure that Lucid and its stakeholders to prosper within the U.S., sure EV infrastructure will must be in place. A nationwide community of charging stations will, when it’s constructed, allow Lucid to thrive as EV adoption grows.
Evidently, President Joe Biden’s administration is prepared and capable of make this imaginative and prescient a actuality. Only recently the Biden administration introduced a significant spherical of funding devoted to constructing America’s EV charging community.
Underneath the Nationwide Electrical Automobile Infrastructure (NEVI) Method Program, almost $5 billion will probably be supplied over 5 years to assist U.S. states create that community. About $615 million of these funds will probably be allotted this yr.
It’s a quantum leap in the direction of EV adoption in America. Plus, this might assist spur extra curiosity in LCID inventory, and thereby set off a rally within the close to time period.
Look ahead to Growth
Even whereas Lucid shares battle to get off the bottom, the corporate itself seems to be in development mode.
Simply to provide you an instance, Lucid just lately opened up a brand new Studio location at Trend Island in Newport Seashore, California. The image supplied within the press launch reveals an amazing-looking Studio, so these aren’t your typical car dealership areas.
With the Newport Seashore location, Lucid now has 21 areas open in North America. Moreover, the corporate has service facilities open in essential markets comparable to Chicago, Seattle and Houston.
On prime of all that, Lucid revealed plans to construct a manufacturing plant in Saudi Arabia in 2025 or 2026. Solely time will inform whether or not Lucid’s luxurious EVs will probably be standard in Saudi Arabia. Nonetheless, it’s fascinating to witness the corporate transferring into these high-potential markets.
The Backside Line
The problem surrounding EV adoption in America isn’t a query of “if,” however solely a query of “when.”
Tens of millions of {dollars} will probably be allotted towards EV infrastructure, and significantly chargers. That is nice information for all EV producers, together with Lucid.
With that in thoughts, LCID inventory turns into a extra fascinating long-term funding. The corporate’s development is notable, and it’s a part of a world motion that’s really unstoppable.
On the date of publication, David Moadel didn’t have (both immediately or not directly) any positions within the securities talked about on this article. The opinions expressed on this article are these of the author, topic to the InvestorPlace.com Publishing Tips.