LCID Stock Alert: Why Lucid Motors Is Down for a New Week of 52

Despite a week of more growth, things have been looking bleak Lucid Motors (NASDAQ:LCID) soon. Modern electric vehicle (EV) startups are battling a tough economic climate that seems to be getting tougher. While the going is tough for many automakers, LCID’s stock has fallen for the year, falling to $2.38 per share. This indicates that things are worse for him than some of his colleagues.

But even after reaching this critical point, Lucid is working hard to bounce back. Shares are in the green today, currently up 1% and slowly rising. For a company that has struggled so much lately, this kind of resilience is important.

What’s Going On With LCID Stock

There’s no denying that the past six months have seen LCID’s stock plummet. It is trading below a penny a share, which is likely to discourage many investors. But it’s important to note that the recent decline that pushed Lucid to a 52-week low was not due to company-specific factors. Instead, they can be more closely related to the problems facing the broader EV market. Let’s look at the factors that weigh on most EV stocks.

First, the popularity of EVs has been questioned recently increased sales of hybrid vehicles. Other new energy vehicles are also fuel efficient and usually come with very low sticker prices. This makes their popularity a threat to automakers that only build high-end EVs, of which Lucid is a prime example. This situation has raised doubts about companies like Lucid, whose growth depends on consumers wanting to buy high-end luxury EVs.

Second, many EV players have announced layoffs recently. Tesla (NASDAQ:TSLA) you just selected reduce its global workforce by more than 10%, which will affect approximately 14,000 workers. Fellow EV startups Rivian (NASDAQ:RIVN) has implemented multiple rounds of layoffs in 2024, with more cuts announced last week.

Not one of these companies is Lucid. However, Tesla is the leader in the EV industry, and Rivian is one of Lucid’s closest peers. So, it stands to reason that bad news from both of them could push LCID stock down.

Some Good News

Even with the many problems facing EV stocks right now, there’s reason to believe that Lucid can be turned around. Citi soon resumed vaccination of the company, setting a bullish price target of $2.90 on LCID stock. Like ElectricVehicles.com reports, “the company emphasizes Lucid’s “strong” electric vehicle (EV) technology even as it raises concerns about the implementation risk of the upcoming model scheduled for late 2024 Gravity.”

Additionally, rumors continue to grow that a short-term squeeze for Lucid may be coming. InvestorPlace contributor Faisal Humayun notes that while the company’s cash burn may be a concern for some, Lucid still has “adequate financial flexibility” and can therefore make more growth-driven investments. For all the problems it has faced this year, Lucid is determined to prove that it should not be counted out.

At the date of publication, Samuel O’Brient did not hold (directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the author, in accordance with InvestorPlace.com’s Publishing Guidelines.