TeslaOne of the world’s largest companies, with a market cap of more than $1 trillion, remains a viable investment opportunity, but investors who get the next Tesla right can reap the most by investing in electric vehicle (EV) stocks.
Quite a few measurements are suggestive Lucid Group:(NASDAQ: LCID) may be the diamond you are looking for even if you have less than $200 invested right now. Because the entire business is still valued at under $10 billion, though it doesn’t take much imagination to see the EV company being worth at least $100 billion one day.
But before you jump in, make sure you understand two things about the company.
Despite strong sales growth since 2021, much of Lucid’s growth journey lies ahead EV: US sales remain a fraction of total car sales.
According to data compiled by the US Energy Information Agency, currently only 7% of car sales in the US are electric models. That’s down from a peak of 8% in 2024, but still up significantly from 2018’s 1%.
Where are EV sales headed?Analyst expectations are all over the place, but almost all forecasts are trending in the same direction: up.
S&P GlobalFor example, it believes that despite some challenges in 2024, the next few years should be seismic for both electricity production and demand.
That report predicts that 2026 will be a tipping point for EV demand, leading to 25% of vehicles sold in the US being electric by 2030. So if S&P Global is correct, EV sales should will more than triple over the next five years.
In many ways, Lucid is in the right place at the right time.The failures of a long list of electronics manufacturers were mostly attempts to compete in a world where demand was minimal at less than 1% of total car sales.
EVs have a place in the market today, and most people know someone who owns one, if not themselves. And as most forecasts predict, this foothold will only strengthen over time. it’s already here, with a lot of growth to come.
Lucid has done a commendable job of keeping up with demand, with sales up roughly 70% quarter-on-quarter, up nearly 90% last quarter.
Analysts expect the company’s total sales to reach $778 million in 2024. For this year, however, they predict sales growth of 118 percent to $1.69 billion.
This growth is fueled by its Air sedan and the new Gravity SUV, which just went into production a few months ago, with prices ranging from $70,000 to $100,000, depending on options.
So while the company may not yet be able to tap into the mass market, it has proven that it can produce high-end luxury models with enough customer appeal to reach more than $1 billion in sales in a year.
Lucid is on a promising trajectory. It now has two luxury EV models in production, and its sales base is expected to grow significantly in 2025, in line with overall demand for the EV industry, a trend that won’t stop for potentially several decades There’s one number I’ll be paying close attention to on February 25th, the next time Lucid reports quarterly earnings. gross margins.
Thanks to Lucid’s rapid sales growth, the market has awarded it a premium valuation of 10 times. Tesla, for example, trades at about 14 times, while fellow EV maker Rivia selling at just 3.3 times sales.
There are many differences between these three companies, but perhaps the biggest is their different ability to generate a profit on each car they sell. Tesla has generated positive gross margins for more than a decade billion dollars in sales.
As a smaller competitor, Lucid gets the benefit of the doubt for now. But if you do jump into this growing stock, expect to see its gross margins trend closer to where Rivian is today.
Ever feel like you’ve missed the boat on buying the best stocks?Then you’ll want to hear this.
On rare occasions, our expert team of analysts issue a Double Down stock recommendation for companies they think are about to appear. If you’re worried you’ve already missed your chance to invest, now is the best time to buy before it’s too late. And the numbers speak for themselves.
Nvidia:if you invested $1,000 when we doubled in 2009,you will have $352,417!*
Apple: if you invested $1,000 when we doubled in 2008, you would have $44,855!*
Netflix. if you invested $1,000 when we doubled in 2004, you would have $451,759!*
Right now we’re issuing Double Down alerts for three incredible companies, and there won’t be another chance anytime soon.
English