[Editor’s note: “Where Will Lucid Motors Be in 5 Years?” was previously published in June 2021. It has since been updated to include the most relevant information available.]
Lucid Motors (LCID) is one of my favorite EV stocks in the game. In fact, I’ve been bullish on this company for a while.
And the best part? It continues to prove itself — and why we should all be fans of LCID stock.
Tesla (TSLA) has been the industry leader for years. Indeed, we’ve been bullish on Tesla for so long that we’ve scored our readers 2,000%-plus gains on the stock. But sometimes, even great things must come to an end.
Edmunds’ car experts recently put the two EV makers to the test. And when comparing Lucid’s Air Dream Edition to Tesla’s Model S Plaid, they proved the two can go toe-to-toe.
Both models tied in terms of pricing and value, interior and tech. And in fact, Lucid proved its range and performance were superior. Though the Model S ultimately beat out the newcomer, it was only by an incredibly slim margin. According to Edmunds:
“The Lucid Air is a praiseworthy first effort from a new automaker, thanks in large part to its Tesla-beating range, otherworldly acceleration and head-turning exterior design. For now, the Model S holds a slight edge overall, but if Lucid can work past its teething issues, it may well end…Tesla’s reign.”
Relative newcomer Lucid is giving titan Tesla a run for its money. And this is only the beginning.
Taking Over Where Others Left Off
For years, EV stocks followed TSLA wherever it went. Up or down, all other EV stocks followed suit.
But this is no longer true. It’s becoming clear that Lucid Motors is providing stiff competition for Tesla, especially in the premium, luxury channel. Where Tesla stands to lose a lot of market share, we think Lucid can step in and dominate.
And industry developments have only strengthened this thesis.
Tesla cancelled its Model S Plaid+, its 500-plus mile range version, and the only version capable of rivalling Lucid Motors’s Air Dream Edition in terms of range. This is a big win for Lucid. Its Air Dream stands alone as the best performance EV in the market.
And when Tesla released its Model S Plaid, there were no “mic drop” moments. It was all according to plan. And that’s great news for other companies but not for Tesla. This means it may be maxing out its underlying tech.
That would mean Tesla’s max point is below Lucid’s. And that gives the startup ample room to take the industry lead.
Take a Road Trip With LCID Stock
It looks like Lucid will be the winner of the luxury EV race, at least for the next few years.
That means LCID stock will outperform TSLA. With a $711 billion market capitalization, Tesla is priced to dominate the EV market for the foreseeable future. If it doesn’t, the stock will fall.
Meanwhile, with a mere $22.8 billion market capitalization, Lucid is priced for some market share gains in the EV industry. And if those gains are as large as we expect, LCID stock will power much higher.
A game plan for the next six to 12 months? Sell TSLA stock into strength. Buy LCID stock on weakness.
Over the next three to five years, Lucid stock will meaningfully outperform TSLA from current levels.
Where Will Lucid Motors Be in Five Years?
In five years, here’s where we see Lucid Motors within the broad context of the EV industry.
For one, it’ll be standing alone as the de facto brand of luxury EVs — above Tesla, Audi and Porsche (POAHY). In terms of brand and technology, it will be in a class all its own.
It’ll also have stores in all the high-class malls, like Tesla does today. Those stores will be busier than Tesla’s. And they’ll be nicer and fancier, too.
Lucid Motors will be selling hundreds of thousands of cars a year, at super-high price points, with extremely favorable margins. We’re talking a $20-plus billion revenue company by 2026, with 20%-plus gross margins.
For all intents and purpose, in five years, Lucid will be where Tesla was around 2019 or 2020. And by the end of 2020, Tesla was worth $650 billion.
The Final Word on Lucid
Of course, especially given the continuing market turbulence, we’ve got an eye on LCID and TSLA stock prices now. But what we’re really looking at is Lucid’s impending superiority in the EV industry in the more distant future.
Tesla cancelled its competing model and is seemingly bowing out of the luxury car race. And that makes Lucid’s job much easier.
But LCID stock isn’t the only one on my radar.
In fact, there’s a tiny, $3 technology stock that I think may be the single most compelling 12-month investment opportunity in the market today.
See; the world’s largest company – Apple (AAPL) – is about to enter the EV game. They’ve been working on a super-secret “Apple Car” project since 2015. And late last year, the company reportedly increased investments into the project so as to accelerate its development timeline.
The implication? Apple will launch its own EV likely within the next two years.
Judging by the success of the iPhone, iPad, Mac, and Apple Watch, it seems very probable that the Apple Car is a huge hit. It even seems possible that this car unseats Tesla as the best-selling EV in the market.
If so, the Apple Car could be bigger than the iPhone, iPad, Mac, and Apple Watch put together.
And the $3 stock I’m talking about is – per my analysis – positioned to secure a partnership with Apple to supply a critical piece of technology to make the Apple Car work.
If that sounds like a big deal, it’s because it is. My modeling suggests this tiny stock could soar 40X over the next few years.
So… what’re you waiting for? This may be the most exciting investment opportunity in the market today.
On the date of publication, Luke Lango did not have (either directly or indirectly) any positions in the securities mentioned in this article.