LCID

What is Lucid and what do they do?

Ever thought a Tesla just wasn't luxurious enough?

Lucid is on a mission to “inspire the adoption of sustainable energy by creating advanced technologies and the most captivating luxury electric vehicles, centered around the human experience.”

Founded in 2007 and headquartered in Newark, California, Lucid has historically focused on building powertrains and battery systems for other vehicle manufacturers. But in October 2021, Lucid released their first EV, the luxury sedan, Lucid Air. The company is also looking to release their first luxury Sports Utility Vehicle (SUV) through Project Gravity by 2024.

Lucid’s CEO Peter Rawlinson previously served as the Chief Engineer of the Tesla Model S program.

How does Lucid make money and is it profitable?

Lucid earns revenue through the sale of Lucid Air to consumers. It also earns revenue through the sale of battery pack systems, supplies and services for vehicles to a single undisclosed customer.

Lucid is currently unprofitable at this time. The company stated in its most recent annual report:

“We currently depend on revenue generated from a single vehicle model, the Lucid Air, and in the foreseeable future will be significantly dependent on a single or limited number of models.”

The company’s net income sunk from negative US$277m in FY2019 to US$719m in FY2020 to US$2.60b in FY2021. As of the end of FY2021, Lucid has a negative free cash flow of almost US$1.5b.

While Lucid is planning on producing up to 90,000 Lucid Air and Project Gravity vehicles by the end of 2023, many speculators don’t see Lucid turning a profit until at least 2024.

Is LCID stock a buy?

The LCID stock price has been volatile since listing in September 2020. 

Between January and February 2021, the stock climbed over 420% from around US$10 to over US$52. After hitting its February 2021 peak, the stock dropped over 60% back down to around US$18.

In October 2021, the stock climbed more than 120% from over US$24 to over US$55 only to plummet over 60% to around US$22 by March 2022.

With powerful backing from the Public Investment Fund of The Kingdom of Saudi Arabia, Lucid may turn a profit over the long run. However, while the company remains unprofitable, LCID’s stock price is also likely to remain volatile.

Does QQQ have LCID?

Yes, QQQ (Invesco QQQ Trust) holds LCID. 

As of 28 March 2022, QQQ is the largest holder of LCID of all U.S. ETFs. LCID holds around 23.19M shares. This makes up 0.30% of QQQ’s holdings.

Other ETFs with large holdings of LCID include ALPS Clean Energy ETF (5.1%), Roundhill Meme ETF (3.92%) and VanEck Low Carbon Energy ETF (2.76%).

Who owns the most LCID stock?

The Public Investment Fund of The Kingdom of Saudi Arabia (PIF) is LCID’s biggest investor, holding 61.41% of the stock.

LCID is also held in large quantities by venture capital firm, Venrock (1.14%) and investment management institutions Vanguard Group (1.71%), BlackRock (0.76%) and Goldman Sachs (0.71%).

CEO Peter Rawlinson owns 0.61% of LCID.