Investor's Corner
Lucid Group lowers 2022 production forecast by around 30 percent
Lucid Group (NASDAQ: LCID) held its Q4 2021 Earnings Call last evening, where it revised its 2022 production forecast from around 20,000 vehicles to between 12,000 and 14,000 units this year. The adjustment was unforeseen as Lucid has been slowly but steadily ramping production of the Air, its first vehicle. However, the company’s call last night clarified what the automaker expects for the future, looking at 2022 and 2023 as perhaps the company’s most crucial for any possibility to compete with industry leader Tesla.
Lucid said on its Q4 2021 Earnings Shareholder Deck that it would be revising its 2022 targets, reducing them by around more than 20 percent. Lucid will aim for 12,000 to 14,000 units, citing supply chain constraints and “a continued focus on quality.”
CEO Peter Rawlinson said the company’s insistence on the highest quality parts, along with logistics issues, has been the biggest bottleneck in Lucid’s ramp-up of the Air. The pandemic also limited visits to supplier facilities. However, the shortages are not for crucial parts like semiconductors or batteries, which have been in short supply since the COVID-19 pandemic started in early 2020. Instead, the issues come from some interior and commodity items.
“In some cases, the pandemic meant that our teams could not visit our suppliers in-person to ensure alignment on engineering specifications and tooling,” Rawlinson said. “As travel has opened back up, our supplier quality teams have been able to address many of these issues. I will note that these issues are impacting only a handful of our approximately 250 suppliers and are not affecting critical single-source or dual-source components like semiconductors or batteries. Instead, it’s been commodity items like glass and carpets, and we’ve adapted by changing our specifications or indeed switching vendors if needed.”
The adjustment in production output for the year has analysts revising their outlook for Lucid Group for the year.
Bank of America analyst John Murphy said the change was “somewhat surprising in magnitude,” although the firm expected the output rate to decrease at some rate. Despite this, Murphy still holds the same $60 price target and maintains a “Buy” rating on $LCID stock, citing the company’s new Saudi Arabia factory as a chance for more international expansion and Lucid’s strong financials, backed by 25,000 orders of the Air sedan.
Lucid Motors announces first international plant in Saudi Arabia
“Capacity from this facility is targeted to be 150k vehicles per annum, initially to fulfill the Saudi Arabia market demand, but eventually to export to other global markets, and construction is targeted to commence in 1H:22,” Murphy said in the note (via Benzinga).
At the time of writing, Lucid shares were trading at $24.50, down over 15 percent.
Murphy is ranked 640th out of 7,793 analysts on TipRanks. He has a 60 percent success rate and an average return of 12.2 percent.
Disclosure: Joey Klender is not a LCID Shareholder.
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Shark Tank personality and legendary investor Kevin O’Leary roasted former Vice Presidential nominee Tim Walz over his comments regarding Tesla shares earlier this week.
Walz, a Minnesota Democrat, said that he recently added Tesla (NASDAQ: TSLA) to his Apple Stocks app so he could watch shares fall as they have encountered plenty of resistance in 2025 so far. He said that anytime he needs a boost, he looks at Tesla shares, which are down 36 percent so far this year:
If you need a little boost during the day, check out Tesla stock 📉 pic.twitter.com/KBEh6pOZLW
— Tim Walz (@Tim_Walz) March 19, 2025
Walz, among many others, has been critical of Tesla and Elon Musk, especially as the CEO has helped eliminate excess government spending through the Department of Government Efficiency (DOGE).
However, Kevin O’Leary, a legendary investor, showed up on CNN after Walz’s comments to give him a bit of a reality check. O’Leary essentially called Walz out of touch for what he said about Tesla shares, especially considering Tesla made up a good portion of the Minnesota Retirement Fund.
As of June 2024, the pension fund held 1.6 million shares of Tesla stock worth over $319.6 million:
O’Leary continued to slam Walz for his comments:
“That poor guy didn’t check his portfolio and his own pension plan for the state. It’s beyond stupid what he did. What’s the matter with that guy? He doesn’t check the well-being of his own constituents.”
He even called Walz “a bozo” for what he said.
Of course, Walz’s comments are expected considering Musk’s support for the Trump Administration, as the Tesla CEO was a major contributor to the 45th President’s campaign for his second term.
However, it seems extremely out of touch that Walz made these comments without realizing the drop was potentially hurting his fund. While we don’t know if the fund has sold its entire Tesla holdings since June, as a newer, more recent report has not been released yet, it seems unlikely the automaker’s shares are not still making up some portion of the fund.
Tesla (NASDAQ: TSLA) received an upgraded rating on its shares from Wall Street firm Cantor Fitzgerald, who recently took a trip to Austin to visit the company’s data centers and production lines ahead of several high-profile product launches set for this year.
It was a bold move, especially considering Tesla shares are under immense pressure currently, fending off negative news regarding the company’s sentiment and potentially lower-than-expected delivery figures due to the launch of a new version of its most popular vehicle, the Model Y.
However, the bulls on Wall Street are still considering Tesla to be a safe play, especially considering its robust presence in various industries, including automotive, energy, and AI/Robotics.
Cantor Fitzgerald analyst Andres Sheppard said in a note that, during a recent visit to Tesla’s Cortex AI data centers and the production line at Gigafactory Texas, it was clear there is a lot of potential and runway for Tesla in 2025:
“On 3/18, we visited Tesla’s Cortex AI data centers and the factory’s production lines ahead of the company’s introduction of its Robotaxi segment (targeted for June in Austin, followed by CA later in 2025). With Tesla’s shares now down ~45% YRD, we upgrade Tesla to Overweight (from Neutral) ahead of upcoming material catalysts. Our $425 12-month PT is unchanged. Our Thoughts: Attractive Entry Point Ahead of Material Catalysts.”
Sheppard went on to mention the catalysts, which he believes are the Robotaxi rollout in Austin in June, along with the continued rollout of Full Self-Driving in China, the eventual rollout of FSD in Europe, and the introduction of the affordable models in the first half of this year, and those were just on the automotive side.
There are several others, including Optimus, growth in the energy division, and in the longer term, the Semi.
In terms of potential weaknesses, Sheppard expects the likely removal of the EV tax credit and some of its growth to be offset by tariffs as the two big things that stand in the way of even more growth for the company.
Tesla is up over 5 percent on Wednesday, trading at $236.86.
Tesla stock (NASDAQ: TSLA) surged over 7 percent on Wednesday, canceling out some of the losses it has felt this week.
It has been a less-than-ideal start for Tesla in 2025, as the company has wiped out all of its gains felt from the victorious election campaign of President Donald Trump. The stock is down 34 percent so far this year.
The losses have mostly been felt due to reports of decreased demand due to pushback against CEO Elon Musk and his support of President Trump, as well as investor concern over the CEO’s personal use of time between the Department of Government Efficiency (DOGE) and Tesla itself.
In a note this week from Wedbush, analyst Dan Ives wrote:
“Musk needs to step up as Tesla CEO at this critical juncture. In a nutshell, the word ‘balance’ has been missing with Elon Musk and his ability to run Tesla as CEO….while instead focusing all of his energy and time driving his DOGE initiative within the Trump Administration. Since Trump’s White House 2nd term kicked off in January, we have seen Musk and Trump connected at the hip with Musk essentially living at the White House and Mar-a-Lago in Palm Beach. There has been little to no sign of Musk at any Tesla factory or manufacturing facility the last two months and perception has become reality for Tesla shares. Trump getting elected President was a huge moment for Musk and Tesla in our view as this will create the fast track for an autonomous federal roadmap…however the DOGE efforts have now intertwined Tesla into this brewing political firestorm.”
Wednesday’s slight bump for Tesla shares is likely related to the support the company received from President Trump yesterday, who purchased a Model S sedan at the White House and pledged to pay for it with a check.
President Donald Trump buys a Tesla at the White House – Here’s which model he chose
The move was one that signaled a buying spree from high-profile Republicans, including Sean Hannity, among others, who announced their support for Musk and Tesla:
As promised yesterday, I Just ordered my new self driving Tesla! Over 1000HP, 0-60 in 2.0 seconds!
Details on how to win the Tesla of your Choice soon on https://t.co/9hkyEX1UVi! pic.twitter.com/PSCCtUsXK2
— Sean Hannity 🇺🇸 (@seanhannity) March 11, 2025
Tesla shares closed at $248.09 on Wednesday, up 7.59%.
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