Over the last few years, EV stocks has seen a lot of investor interest. These stocks have seen a surge in investor interest due to a number of factors. The incredible growth witnessed by incumbents, such as Tesla (NASDAQ :), along with the recent bullish political climate for electric vehicles, fueled by the President’s American Jobs Plan, are two of the main contributors to investor enthusiasm for EV stock stocks.

For growth investors seeking strong secular tailwinds, the narrative of Tesla (NASDAQ:) is still strong. The hyperbullish sentiment around EV stocks like Lucid Group (LCID), however, seems to have waned somewhat in recent months. LCID stock, which has seen significant volatility in a small band over the past six-months, is one of those stocks.

Concerns about the global shortage of semiconductors that is threatening EV production are still a concern. As well, conservative investors are still concerned by the relative valuations for EV stocks compared to high-growth sector. Hyper-growth sector have also seen some cooling, despite the possibility of slowing demand from economic problems arising out the Delta variant.

Lucid is still one of the most intriguing early-stage EV investments investors should be keeping an eye on. We’ll be looking at some things that investors might want to keep an eye on with this growing stock.

At the moment, I am neutral regarding Lucid’s outlook. (See Lucid Group stock charts on TipRanks)

Factors Pressuring LCID Stock

There are a couple of key factors responsible for much of the recent pressure LCID stock has seen from the market. 

Investors might have seen some selling towards the end August. The September 1 expiration of the lockup provisions that protect insiders is what may have prompted this selling. It appeared that investors were trying to get ahead of possible selling pressure. Thankfully for investors though, the insiders have not sold en masse. This led to a recovery of LCID stock back to its mid-August levels.

Since late, insider selling between various SPACs has become a greater concern. These high-growth speculative investments can be a hassle for investors. Investors who put money in these types of growth vehicles may be hurt when large numbers of shares go under the hammer. While this doesn’t seem to be happening with LCID stocks right now, it is something that investors are acutely aware.

In the short-term, it appears that sentiment will play a greater role in how LCID stocks performs. Investors who feel confident betting on de-SPAC or SPAC segments could make LCID stock rise. However momentum can work both ways so investors must be mindful of the risk and reward.

Future Prospects of Lucid Stock Look Strong

Despite rising considerably this past week, LCID stock remains well below its highs seen earlier this year. Some investors are excited about the release of Lucid Air’s model this year and believe now might be the best time to get into an early-stage electric vehicle company.

Lucid appears strong in luxury EV markets. In this segment, Lucid may be able to challenge Tesla. Given the specifications that have been revealed so far, a dazzling 520-mile EPA rating for Dream Edition R’s model is an industry record, those seeking performance and range will not find a better choice.

Lucid is the clear leader in terms of specs. This means that performance-oriented people will not be disappointed to have the opportunity to test drive a Lucid car. Lucid’s upcoming models are some of the most anticipated in the electric vehicle sector. These performance metrics have a positive marketing impact on investors. If the hype is true, LCID stock might really explode as production grows.

However, there are many execution-related risks that can be associated with delivery and production schedules. It remains to be seen how Lucid does in the next few months. But, you can’t argue with the energy this stock adds to the EV market.

What do Analysts Think About LCID Stock

TipRanks consensus rating for LCID stock was a Moderate buy. Two Buy and one Sell recommendations are available from the 3 ratings. 

The average Lucid price target is $23.33, implying an upside of 1.61%.

Bottom Line

Lucid is a company that has raised the bar significantly in terms of performance in the EV sector. LCID stock might be a good alternative for Tesla investors.

Lucid will need to demonstrate impressive growth numbers to make this stock worth its value. Investors might recall Tesla from ten years back. This stock is worth keeping an eye on in the next quarters.

Disclosure: Chris MacDonald didn’t hold any positions in the securities discussed in this article at the time it was published.

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