It’s been an interesting run for investors in the California-based electric vehicle maker Lucid Group (NASDAQ:LCID), to say the least. Clean energy vehicle stocks are known to be volatile, but LCID stock has been particularly prone to mis-hits in either direction.
However, there is an old adage to keep in mind: nothing ventures, nothing wins. Investing in Lucid is risky and will test your commitment to the ongoing electric vehicle revolution.
This is not to say that a position in LCID stocks is based solely on faith. On the one hand, Redburn analyst Charles Coldicott expects the global electric vehicle market to grow “up to 10x by 2030”, which of course would be bullish for Lucid.
Coldicott has also assigned a price target of $39 for the stock. Could the stock price actually make it happen? That’s the billion dollar question, so let’s start now with some technical analysis.
A Closer Look at LCID Stocks
The recent drop in LCID stock may be disconcerting, but it’s not necessarily Lucid’s fault in particular.
Don’t forget that Lucid is a member of the Nasdaq, and Wall Street began to shy away from tech stocks in November of last year. And, just as a rising tide lifts all boats, a falling tide can sink all boats.
Lucid didn’t encounter any particularly bad company-specific news in November. Still, LCID stock has nonetheless started falling from its $60 resistance level.
Interestingly, from a technical standpoint, this stock also encountered resistance at $60 in February 2021. Therefore, this is a pretty good place for Lucid shareholders to consider taking profits.
LCID stock was flat in mid-February at $29, so the worst of the decline may be in the rearview mirror. As for Coldicott’s $39 price target, it could easily be reached within the next two months if investors finally stop beating the Nasdaq.
The president points it out
For Lucid and its stakeholders to thrive in the United States, certain electric vehicle infrastructure will need to be in place. A nationwide network of charging stations, once built, will allow Lucid to thrive as the adoption of electric vehicles grows.
Clearly, President Joe Biden’s administration is willing and able to make this vision a reality. Just recently, the Biden administration announced a major round of funding dedicated to building the electric vehicle charging network in the United States.
Under the National Electric Vehicle Infrastructure (NEVI) formula program, nearly $5 billion will be provided over five years to help US states build this network. Approximately $615 million of these funds will be allocated this year.
It’s a giant leap towards the adoption of electric vehicles in America. Moreover, it could help to further stimulate interest in LCID shares and thus trigger a short-term rally.
Watch for expansion
Even though shares of Lucid are struggling to take off, the company itself appears to be in growth mode.
Just to give you an example, Lucid recently opened a new studio at Fashion Island in Newport Beach, CA. The image provided in the press release shows a stunning looking studio, so these are not typical car dealership locations.
Along with the Newport Beach location, Lucid now has 21 locations open across North America. Additionally, the company has open service centers in major markets such as Chicago, Seattle and Houston.
On top of all that, Lucid revealed plans to build a production facility in Saudi Arabia in 2025 or 2026. Only time will tell if Lucid’s luxury electric vehicles will be popular in Saudi Arabia. Still, it’s fascinating to see the company establishing itself in these high-potential markets.
The problem surrounding the adoption of electric vehicles in the United States is not a question of “if”, but only a question of “when”.
Millions of dollars will be allocated to electric vehicle infrastructure, and in particular to chargers. This is great news for all EV manufacturers, including Lucid.
With this in mind, LCID shares become a more attractive long-term investment. The company’s growth is notable and part of a truly irresistible global movement.
As of the date of publication, David Moadel had no position (directly or indirectly) in the securities mentioned in this article. The opinions expressed in this article are those of the author, subject to InvestorPlace.com Publication guidelines.