Lucid: Tesla Stumbles And Tariffs Bode Well (Mostly)

Summary

  • Lucid is a speculative buy, benefiting from Tesla's missteps and U.S. tariffs that shield it from Chinese EV competition.
  • Tesla's declining reputation and sales open up market share for Lucid, especially as Lucid expands overseas and launches more affordable models.
  • Risks include Lucid's exposure to tariffs on parts, lower American content, and competition from cheap used Teslas and Chinese automakers abroad.
  • Lucid's strong revenue growth and cash reserves support its valuation, but investors should keep stakes moderate due to industry headwinds.

Lucid Air Grand Touring display. Lucid offers the Air Grand Touring with up to an estimated 516 miles per charge. MY:2022

jetcityimage

Thesis: Lucid is worth a speculative investment, especially given Tesla's recent stumbles and efforts by the Trump Administration to protect the domestic automobile industry.

I’ve generally been rather cool on the American auto industry owing to the threat of emerging

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Markets rise and fall, booms come and go, and the world keeps ticking. Ultimately, I believe observing megatrends, as difficult as they can be to spot, let alone fully comprehend, can yield insights into the advance of human society, which in turn could pave the way for many useful investment insights. As society and technologies evolve, companies and other stakeholders will seize advantages. Figuring out which companies will take the best advantage of any given opportunities is not easy. I am especially interested in macrotrends, futurism, and increasingly, emerging technologies. However, as far as investing is concerned, it’s crucial to pay attention to the fundamentals, quality of leadership, product pipeline, and all the other details. In recent years, I have focused on marketing and business strategy, primarily for medium sized companies and startups. I have worked in international development, including overseas for a foreign Prime Minister’s office, as well as non-profit work in the United States. Among other tasks, I evaluated startups and emerging industries/technologies. I have also moonlighted as a technology and economic news journalist. Now I’m looking to tie everything together. While my personal interests will always keep megatrends and technological developments in mind, I do believe fundamentals and technicals are vital to uncovering opportunities.

Analyst’s Disclosure:I/we have a beneficial long position in the shares of LCID either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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