Key takeaways
- Lucid (LCID) is expected to recover from its ongoing downtrend, according to trader Haroonraees and the CoinCodex price prediction algorithm
- Lucid CEO Peter Rawlinson stated that recent price cuts helped to boost sales, while Experian have just reported that there were only 348 registrations in the US in July
- Luxury EVs may find a better product-market fit as time goes on, sentiment remains bullish for LCID over longer time horizons
Lucid struggles to gain traction in the EV market, stock price now 65% down in the past year
Lucid (NASDAQ:LCID) has fallen more than 90% since it formed its all-time high back in 2021 — a downtrend that has included a 67.97% price reduction since LCID formed its yearly high in February 2023.
The company, founded by former Tesla Chief Engineer Peter Rawlinson, had struggled to gain market share for its high-end electric vehicles (EVs), which resulted in the company cutting prices in a bid to spark demand.
Rawlison stated recently that the price cuts had been well received by the markets, but didn’t specify exactly the extent to which sales were boosted by lower prices. Experian has since reported that there were only 348 registrations for Lucid’s ‘Air’ line of EVs in the month of July.
Lucid, $LCID, has reportedly struggled to sell its luxury electric vehicles through the first six months of the year.
There were just 348 registrations of the Lucid Air across the US in July, per Experian.
— unusual_whales (@unusual_whales) September 19, 2023
While Lucid faces stiff competition from Tesla and Ford when it comes to gaining market share in the United States, the company remains in a promising position when considering the rising EV adoption trend around the world. As a result, the stock price for LCID is expected to recover from its ongoing slump.
TradingView chart set-up highlights possible trend reversal, algorithm reinforces bullish sentiment
A TradingView user who goes by the name ‘Haroonraees’ has shared in-depth technical analysis about the ongoing LCID bear trend. Haroonraees has highlighted continued lower-lows and lower-highs as a key bearish indicator, yet has also stated that LCID has the potential to reverse the current downtrend if it can break out of a key resistance level.
LCID trade set-up, via Haroonraees on TradingView
Haroonraees has stated that any break-out of the upper trend line would mean that LCID has closed outside of a falling wedge pattern, which would be a bullish signal:
“For a confirmation of a bullish reversal, a bullish divergence is required on RSI and price needs to move above 9.3” — Haroonraees, TradingView
Over the coming year, the CoinCodex price prediction algorithm has forecasted further bullish action for LCID. The 1-year price prediction had previously highlighted a 670% surge for LCID and a blow-off top above $60, which would have marked a new all-time high for the stock.
However, the algorithm now expects LCID to post more conservative gains, targeting a $20 top during the first half of 2024. This would still be an impressive 358% gain before LCID retraces, potentially marking a multi-year turning point for the recent downtrend.
1-Year LCID price prediction, via CoinCodex
Bottom line: LCID strongly positioned despite sales struggles
EVs are significantly more expensive to produce when compared to ICE vehicles, which can reduce profit margins unless the prices are higher than their competitors. EVs, therefore, have a natural competitive disadvantage that is currently being offset to a small degree by government subsidies and a marketing narrative that they are luxury vehicles.
Lucid Air’s $100,000 price tag gained interest from only 348 people in the whole of the USA in July. EVs need to compete with each other for a portion of the total car production market, and Lucid’s luxury item has so far failed to gain traction.
However, the adoption trend does suggest that EVs are likely to see a growing share of the overall car production market in the coming years, as the world seeks out more sustainable alternatives to fossil fuels. If Lucid can fix its sales slump and boost demand in western markets during this period, then LCID’s stock price is likely to perform well during a prolonged expansion phase for EVs.
