EV Startup Lucid Is Headed To China. Ford Is Struggling There And May Be Scaling Back.
California-based luxury EV startup Lucid Group (LCID) sees opportunity in the Chinese market for electric cars — where Ford (F) is said to be scaling back. Lucid stock hit a new low Wednesday.
Lucid confirmed to Reuters June 9 that it is preparing to enter China, the world's largest auto market. In the U.S., the luxury Lucid Air electric sedan starts around $87,400.
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The Chinese EV market is slowing, after the country phased out subsidies for electric vehicles. That fueled a price war led by Tesla (TSLA) and joined by both auto stalwarts and startups.
Among others, Ford discounted its Mustang Mach-E by about 40,000 RMB ($5,700).
On June 8, Chinese local media reported that Ford was paring back ambitions for the Mach-E in China amid poor sales. A restructuring may see the separate Mach-E team folded back into Ford China, one report said.
Bloomberg reported in May that Ford may cut more than a thousand jobs in China amid declining sales.
Ford launched the Mach-E in China in April 2021 with hopes for big sales to follow. The automaker has now stopped reporting sales by global regions.
Many Western auto giants besides Ford are struggling in that country's hyper-competitive car market.
EV Startup Lucid, Ford Stock
Shares of Lucid carved more than 1% lower Wednesday after falling 2.5% on the stock market Tuesday. LCID stock hit a 52-week low of 6.01 intraday. It had crashed June 1 amid news of a stock offering.
Ford stock slipped 1.3% Wednesday, sliding for a third straight day. Shares are in a ten-month consolidation and far below January 2022 highs.
Tesla stock popped 5.3%, before reversing 4.7% lower. A Barclays analyst downgraded TSLA stock, saying its recent rally was likely too sharp.
On May 31, Lucid announced a $3 billion raise through a stock offering and private investment. The Saudi Arabia-backed startup said it plans to use the new funding to bring its advanced EV technologies to Chinese and global users at a faster pace.
Some analysts say the luxury market for electric cars in China has been slow to electrify. It is dominated by ICE (internal combustion engine) vehicles and EREVs (extended range electric vehicles), a type of hybrid vehicle.
Like many peers, EV startup Lucid is seeing losses mount amid recession fears and rising interest rates.
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Source: Investor's Business Daily
