- Lucid Group stock fell sharply on Tuesday, closing some 9% lower.
- LCID stock is reversing upwards on Wednesday as news emerges of a deal with Saudi Arabia.
- Saudi Public Investment Fund is a major backer of LCID stock.
Lucid (LCID) stock fell sharply on Tuesday as global markets took a huge hit on increasing geopolitical fears as well as weak tech earnings. Netflix (NFLX) had teed bears up last week and Alphabet (GOOGL) did not exactly reassure after the bell before Microsoft (MSFT) steadied the ship. Yields have been steadily rising as the Fed decision approaches and high-growth, high-risk names suffered the most from the recent sell-off.
LCID stock was also caught in some crossfire from the lockdowns in China which are hitting EV makers. China is the world's largest EV market and with increased covid restrictions hitting consumer demand and factory shutdowns hitting supply. Lucid does not have exposure to China consumers yet but was hit in a broad-based sell-off.
Lucid (LCID) stock news: Saudis place 100K EV order
The big news this morning is that Saudi Arabia has placed an order for up to 100,000 Lucid electric vehicles. 50,000 firm orders with a further option to buy an additional 50,000 vehicles. It is a ten-year deal. The order volume will start at a relatively modest 1,000 to 2,000 vehicles annually before ramping up to about 4,000 to 7,000 vehicles by 2025. First deliveries are due to the Saudi Arabia Ministry of Finance in 2023.
"Delivering up to 100,000 Lucid electric vehicles in Saudi Arabia represents another pivotal moment in our acceleration of sustainable transportation worldwide," said Peter Rawlinson, Lucid's CEO and CTO. "We are delighted to be supporting Saudi Arabia in achieving its sustainability goals and net zero ambitions, as outlined by Saudi Vision 2030 and the Saudi Green Initiative, by bringing our advanced luxury EVs to Saudi Arabia," Rawlinson added.
The deal is part of Saudi Arabia's Vision 2030 plan to transform the Saudi Arabian Kingdom into diversity and provide economic benefits and jobs. The plan looks to create a more diverse and sustainable economy. Saudi Arabia is well known for its oil reserves.
Saudi Arabia through the Public Investment Fund (PIF) owns a reported 61% of Lucid Group. Lucid has plans to open a manufacturing plant in Saudi Arabia and currently has a plant in Arizona that will fill the initial stages of this order.
Lucid (LCID) stock forecast: Below $28.14 still way bearish
LCID stock is currently ahead by about 5% in Wednesday's premarket based on this news. That still does not change the technical picture which remains strong bearish. LCID stock is down a huge 54% year to date and 30% in the past month. The first step may already have been achieved, defending the $16.13 support from September 2021's low. Next resistance is at $20.67 and then the big challenge at $28.14. This would clearly end the bearish trend. This is a long road ahead, though.
The Saudi order starts in 2023 and with only 1,000 to 2,000 vehicles so it will not be material for some time. In the current environment growth stocks will remain in reverse. Supply chain issues are a growing concern and are likely to be highlighted again the Lucid's earnings on May 5.
Lucid stock chart, daily
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