In case you ask Lucid (Lucid) CEO Peter Rawlinson, the corporate is the “most immune” EV maker if President-elect Donald Trump cuts the federal tax credit score for electrical automobiles. Regardless of the declare, Lucid’s inventory is hitting a brand new all-time low at below $2 a share.
Is Lucid proof against shedding the EV tax credit score?
Lucid is coming off its third straight document quarter of deliveries. With one other 2,781 automobiles bought in Q3, Lucid’s supply whole reached 7,142 by the primary 9 months of 2024, already topping the 6,001 deliveries in 2023.
Nevertheless, share costs are sinking following a Reuters report on Thursday that Trump’s transition group is “planning to kill” the federal EV tax credit score, which supplies as much as $7,500 for clear automotive patrons.
The report additionally cited two sources claiming that representatives from Tesla (TSLA) advised Trump’s group that they supported the plans to finish the subsidy.
CEO Elon Musk, who absolutely endorsed Trump, stated shedding the credit score might barely impression Tesla’s gross sales however can be “devastating” to others within the US.
Though its luxurious Air sedan, beginning at $69,900, doesn’t qualify for the $7,500 credit score, Lucid is passing it on to some by leasing. Nevertheless, Rawlinson stated lots of its shoppers make greater than the $150,000 for single filers and $300,000 threshold for {couples} submitting collectively.
Due to that, even when Trump cuts the EV tax credit score, Lucid’s CEO believes it’s in a stronger place than many of the competitors.
When requested about Trump’s plans, Rawlinson stated on Bloomberg Tv on Friday that “Lucid, amongst all of the EV makers, is admittedly probably the most immune from that.”
Lucid’s CEO additionally stated he isn’t nervous about Musk getting favorable remedy when Trump takes workplace. Rawlinson defined:
We’ve actually taken the mantle of know-how management from Tesla proper now, and this isn’t actually sufficiently acknowledged. So, I feel we’re in a really robust place to climate any such storm.
Lucid opened orders for its first electrical SUV earlier this month. Beginning at $79,800, the Lucid Gravity is anticipated to get a formidable vary of 440 miles per cost.
Rawlinson calls the Gravity a “landmark product” with its most superior know-how but, which he claims is “years forward of the competitors.” Final month, we obtained our first look at its lower-priced midsize electrical SUV. Costs for the brand new mannequin will begin at below $50,000.
It will likely be the primary of not less than three midsize Lucid EVs, with manufacturing anticipated to start in late 2026. Rawlinson stated the midsize fashions are aimed “proper within the coronary heart of Tesla Mannequin 3, Mannequin Y territory.”
Regardless of the arrogance, Lucid’s inventory hit its lowest value on Friday since going public in July 2021. Lucid shares are down practically 17% this week, sitting at below $2 per share.
Electrek’s Take
Ending the federal tax credit score will put the complete US auto business behind. China continues to achieve extra international market share as leaders like BYD increase into key abroad markets like Europe, Southeast Asia, and Central and South America.
Actually, based on Bloomberg, BYD is shortly closing in on Ford in international deliveries and will even high the American automaker by the tip of 2024.
BYD’s surging international presence is primarily as a result of its early beginnings as a battery maker. Nevertheless, China’s authorities can be fueling EV gross sales progress with subsidies for those who commerce in gas-powered automobiles.
In keeping with Rho Movement, China continues dominating the worldwide market with a document 1.2 million EVs bought in October alone. China has now bought 8.4 million EVs in 2024, up 38% year-over-year (YOY), in comparison with 1.4 million within the US (+9% YOY).
Rawlinson could also be proper. Lucid might be probably the most immune if the tax credit have been minimize. Nevertheless, different US automakers, like Ford, GM, and Jeep-maker Stellantis, is probably not as fortunate.
So, what occurs if the subsidies are killed off? American automakers will doubtless delay or cancel extra EV initiatives (new fashions, battery vegetation, manufacturing amenities), which is able to ship them additional behind within the international market.
Ford’s CEO Jim Farley warned rivals earlier this yr, saying if they can not sustain with the Chinese language, “then 20% to 30% of your income is in danger.” He added, “Because the CEO of an organization that had hassle competing with the Japanese and the South Koreans, now we have to repair this downside.” Ending subsidies would solely put them additional behind.
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