Lucid Overtakes Ford in Market Share

March 1, 2022

EV Startup Lucid Rallies Past Ford

The all-electric vehicle start-up company from Newark, California, Lucid Group Inc. only recently started production on its first model, the 2022 Air ultra-luxury sedan. However, its price per share has blown through the roof like a speeding bullet ever since the company went public via a SPAC deal in July of 2021.

A SPAC, or special purpose acquisition company, is another name for a “blank check company,” meaning an entity with no commercial operations that completes an initial public offering (IPO). The “special purpose” of a SPAC is to bring a promising private company to the public investment market. Bingo, Lucid.

The company became the latest EV startup to top auto industry icon Ford Motor Company on November 16th when it burned rubber past Ford’s market value, jumping nearly 24 percent in a day to close at $55.52 a share. This came the day after Lucid released its first financial results as a public company. The rally pushed the EV company’s valuation to $89.3 billion, surpassing Ford’s F -0.39 percent for the first time since Lucid’s debut on the public market. Lucid is also knocking on General Motor’s door as GM is currently valued at $91 billion.

Continued Growth and Award-Winning Vehicles

Lucid reported a net loss of $524 million for the third quarter of last year due to higher costs associated with starting production in late September and increasing employee head count. But says it raised $4.4 billion from the deal that took it public in the summer and thus has enough cash to ramp up operations through this year.

Company execs predict a bright future as reservations for the Air continue to increase and plans to expand manufacturing output of its Arizona factory. Plus, Motor Trend magazine recently gave the Lucid Air its Car of the Year award, a first time for a debut model from a new car company.

Lucid’s amazing rise in market valuation is happening as other startups are also making the leap. Rivian Automotive Inc., maker of a line of wild EV trucks and SUVs, went public recently with a market value that overtook Ford’s and GMs. Valued at $149 billion, Rivian’s worth has topped Volkswagen AG.

Rivian raised $13.7 billion from its offering and its stock continues to rise, up more than 120 percent from the $78 IPO price. Lucid CEO Peter Rawlinson said the enthusiasm around Rivian’s debut is an important endorsement for some of the challenger brands and the prospects for electric vehicles overall. “A rising tide raises all boats,” said Mr. Rawlinson, in an interview. “We can co-exist very comfortably,” he said, of sharing the marketplace with Rivian.

Not to be outdone, Ford’s shares have been on quite a run as well, up about 125 percent this year, the seventh largest gain in the S&P 200, according to Dow Jones Market Data. This is in no small part due to the enormous success of Ford’s Mustang Mach-E all-electric SUV and its new Ford F-150 Lightning pickup which has pulled in over 160,000 reservation for its debut year and caused the Motor Company to double production.