Shares of luxury electric vehicle (EV) manufacturer Lucid (ticker: LCID) fell 8.1% to $5.11 during midday trading, signalling investor dissatisfaction with the company’s latest release. While the broader market experienced minor declines, with the S&P 500 and Nasdaq Composite down 0.7% and 0.2% respectively, the drop in Lucid’s stock raised concerns.
The EV startup unveiled a new version of their Air sedan, featuring rear-wheel drive, at a more affordable starting price of $77,400. CEO Peter Rawlinson boasted about the model’s impressive 410-mile range, which he claims surpasses that of any other electric car on the market.
Rawlinson expressed his enthusiasm for the new Lucid Air Pure rear-wheel-drive model, stating, “It combines style and technology, offering incredible range and performance, without compromising on space and practicality.”
However, the decline in Lucid’s stock suggests that investors perceive the release of this lower-priced variant as an indication of weakening demand or an impending price cut. While both scenarios are plausible, it is worth noting that rear-wheel drives typically cost less than their all-wheel-drive counterparts. Additionally, offering more variety in their vehicle lineup can be seen as a positive move for Lucid.
On a similar note, Tesla (TSLA) recently reintroduced a rear-wheel drive version of its Model Y in the U.S. Despite this announcement, Tesla’s stock remains relatively unaffected, experiencing a 3.2% increase for the week.
Another factor contributing to Lucid’s stock decline may be the recent double-digit drop of Rivian Automotive (RIVN), with shares falling by 18.5%. Rivian’s decision to sell convertible notes, which have the potential to dilute shareholders’ stakes, was likely responsible for the decline.
Additionally, shares of Polestar Automotive (PSNY) also experienced a slight dip following a third-quarter delivery report. The company reported delivering approximately 14,000 units, bringing their total for the year to around 42,000 units. However, Polestar is confident in meeting its 2023 guidance of 60,000 to 70,000 units.
Overall, it has been a challenging day for EV start-up stocks.