We recently published a list of The 7 Best EV Stocks Under $50. In this article, we take a look at how Lucid Group, Inc. (NASDAQ:LCID) compares to other EV stocks under $50.
Sales of electric vehicles are increasing
Since 2018, electric vehicle (EV) sales have been increasing rapidly as the world tries to reach its goal of carbon neutrality by 2050. According to the International Energy Agency (IEA), only 2% of new vehicles registered worldwide were electric vehicles. By the end of 2023, this figure will rise to 18%. Although most of these sales have been concentrated in China, Europe and the US, other markets such as India, Thailand, Vietnam and Latin America have also adopted the EV trend at a rapid pace.
Although high costs due to interest rates somewhat slowed down electric vehicle sales in 2024, according to the IEA, they are still growing at a considerable pace, as sales reached 3.4 million units in the first quarter, compared to 2.6 million in the first quarter of 2023. In addition, auditing and consulting firm PwC analyzed 21 markets and found that in the second quarter of 2024, 37% of vehicles sold in these markets were battery electric vehicles (BEVs), plug-in hybrid electric vehicles (PHEVs) or hybrids, representing a 30% increase compared to the same period in 2023. At the same time, total electric vehicle sales increased by 21% compared to the second quarter of 2023, while sales of internal combustion engine (ICE) vehicles decreased by 9% during the same period.
BloombergNEF’s Long-Term Electric Vehicle Outlook shows that as technology improves and battery prices fall, electric vehicle adoption will increasingly be driven by consumer demand. The number of electric vehicles sold is expected to surpass 30 million in 2027 and reach 73 million by 2040.
Global electric vehicle market expected to reach $63 trillion by 2050
Despite this progress, strong policy support is still needed, as the baseline scenario assumes that only 69 percent of the global vehicle fleet will be electrified by 2050, well below the 100 percent target of the net zero scenario.
Heavy-duty trucks and other segments are lagging behind in achieving net-zero emissions, and to meet the goal, sales of internal combustion engine vehicles must end by 2038. The report says the global electric vehicle market could reach $63 trillion by 2050, with significant investments needed in battery production and charging infrastructure.
According to estimates by Fortune Business Insights, the global EV market is expected to grow at a compound annual growth rate of 13.8% from 2024 to 2032, and Asia is currently the dominant region with a market share of 51.24%. Now is the right time for investors to take positions in EV stocks as the EV market is just beginning and strong growth is expected.
Our methodology
For this article, we used the FinViz Stock Screener to identify over 25 electric vehicle manufacturers with a share price under $50 as of August 7. We narrowed our list down to the 7 stocks most commonly held by institutional investors and listed the stocks in ascending order.
Why do we care about the stocks hedge funds invest in? The reason is simple: Our research shows that we can outperform the market by mimicking the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks each quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (read more details here).
An engineer examines the design of an electric vehicle in a laboratory and shows the company’s innovative battery systems.
Lucid Group, Inc. (NASDAQ:LCID)
Number of hedge fund owners: 17
Share price as of August 7: $2.91
Lucid Group, Inc. (NASDAQ:LCID) is a U.S.-based electric vehicle manufacturer and developer. The company specializes in producing high-quality electric vehicles to meet the demand for luxury electric vehicles. A key aspect of the company’s approach is its focus on cutting-edge technology, which plays a critical role in producing premium vehicles.
This innovative technology is evident in the design of the motors and the performance of the batteries, allowing Lucid Group (NASDAQ:LCID) to offer exceptional range and superior performance in the market. The company is one of the best EV stocks under $50.
Lucid Group (NASDAQ:LCID) is generating a lot of excitement with its upcoming Gravity SUV, a key product in its plans to expand its presence in the electric vehicle market. The first pre-production model of the Gravity, which is scheduled to hit the road in late 2024, recently rolled off the assembly line. This SUV is more than just a new vehicle for the company, it is a crucial step in reaching a broader customer base.
In addition, Lucid Group (NASDAQ:LCID) secured significant financial support from an affiliate of the Saudi Arabian Public Investment Fund (PIF), including a $750 million credit facility and a $750 million investment in convertible preferred stock.
This $1.5 billion is critical for the company as it will cover both capital and operating costs as it ramps up production of the Gravity SUV. The support will position the company to potentially capture a larger share of the consumer market beyond its current focus on high-end electric sedans.
Lucid Group (NASDAQ:LCID) was held by 17 hedge funds during the first quarter with stakes valued at $26.85 million. Coatue Management is the company’s largest shareholder, holding a position worth $8.42 million as of March 31.
Total LCID 7th place on our list of the best EV stocks to buy. You can visit The 7 Best EV Stocks Under $50 to see the other EV stocks that are on hedge funds’ radar. While we recognize LCID’s potential as an investment, we believe AI stocks promise higher returns and do so in a shorter time frame. If you’re looking for an AI stock that’s more promising than LCID but trades at less than 5x its earnings, read our report on the cheapest AI stock.
Read next: Analyst sees a new $25 billion ‘opportunity’ for NVIDIA and Jim Cramer recommends these 10 stocks in June.
Disclosure: None. This article was originally published on Insider Monkey.
