Tesla's Pain Is Under $3 Lucid's Gain: Time to Buy LCID Stock?

Group 1: Tesla's Challenges - Tesla's shares have decreased by 45% from a mid-December peak of $488.54, facing volatility amid criticism of Elon Musk's political affiliations [1] - The company reported a 13% decline in vehicle sales for the January-March quarter, marking its worst performance since 2022, attributed to an aging vehicle lineup and increased competition [2] - Vehicle sales in Europe have suffered, and the Cybertruck was recalled in the U.S., while potential buyers are holding off on the Model Y due to an anticipated upgraded version [3] Group 2: Lucid's Opportunities - Tesla's issues have led current Tesla owners and potential buyers to consider alternatives like Lucid, which has seen a significant increase in orders from Tesla owners, accounting for nearly half of its EV orders [4] - A small decline in Tesla's demand could greatly benefit Lucid; for example, a 1% loss in Tesla's 1.8 million vehicles sold in 2024 could mean 18,000 potential buyers for Lucid, which sold only 10,000 vehicles last year [5] - Lucid aims to double its vehicle sales to 20,000 by 2025, a target that seems feasible given its sourcing of spare parts from the U.S., which may not be affected by new tariffs [6] Group 3: Lucid's Financial Performance - Lucid reported revenues of $807.8 million in 2024 but faced a negative gross profit of $923.1 million, with a net loss of $636.9 million for the quarter ending December 31 [8] - The company's net profit margin stands at negative 335.9%, significantly below the Automotive - Domestic industry average of 4.4%, indicating a need for increased production to achieve profitability [9] - Lucid must focus on producing affordable EVs to reach a broader market, rather than relying solely on its $79,900 Gravity SUV aimed at niche customers [10] Group 4: Market Outlook for Lucid - Analysts are optimistic about Lucid's growth potential, raising the average short-term price target for LCID stock by 11.7% to $2.68, with a highest target of $5, representing an upside of 108.3% [7]