Today witness a resurge in Lucid's share price value.
Lucid Group's (LCID 3.96%) shares are experiencing a significant surge today. Despite the company not yet disclosing its fourth-quarter production and delivery figures, positive data from industry peers has instilled confidence among investors.
By 11:15 a.m. ET, Lucid's shares had climbed 7.9%. This upward trend has amplified a substantial 51% increase in the stock's value over the past month.
Misplaced fear of diminishing EV demand
In 2024, there were widespread concerns that demand for electric vehicles (EVs) was waning. Consequently, major traditional automakers scaled back their plans to ramp up EV production. Yesterday, market leader Tesla reported a drop in annual delivery volume for the first time since it began significant production levels.
In contrast, today, EV start-up Rivian Automotive reported a decrease in annual production, but managed to surpass its previous estimates. Crucially, this development has reassured Lucid investors, as both Tesla and Rivian demonstrated signs that consumer demand remains robust.
Rivian not only surpassed its production estimates, but also maintained its delivery range as previously stated. Moreover, both companies reported that their fourth-quarter vehicle deliveries outpaced production levels, leading to a reduction in inventory. This indicates a promising outlook for their forthcoming financial results. Tesla managed to decrease its vehicle inventory by about 36,000 units in the fourth quarter, while Rivian scaled back its EV inventory level by approximately 1,500 units. This significant decrease in inventory, totalling around 2,100 units for the entire year, is a positive sign for Lucid investors, who are anticipating the company's fourth-quarter results. While Lucid has yet to disclose these figures, historically it has revealed them on January 11, so the update for 2024 is expected next week.
The positive performance of Lucid's shares could incentivize more investors to consider investing in the finance sector, specifically in EV companies like Lucid Group. The decreased vehicle inventory for both Tesla and Rivian has been a catalyst for investor confidence, suggesting a strong market demand for electric vehicles.
