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Citi analysts wrote in a note, “We remain constructive on Lucid’s leading technology position (recently validated by the Aston Martin deal), anchored by a miles/kWh advantage estimated to be worth $4-5k/vehicle. With the cash/liquidity runway having been extended, the focus shifts back to NT demand for the Lucid Air and the company’s gross margin progression, which were challenged in Q1. The ideal outcome would see improvement on both fronts, followed by the unveiling of the Gravity SUV. Given the stock’s relative valuation, recent EV price discounts (Model S) and the time gap until Gravity SOP, a bullish stance on the stock requires some conviction on the H2 Air volume ramp and margin progression. To that, our latest 3rd party data checks weren’t discouraging but didn’t quite give us sufficient conviction either, so we opt to wait for an opportunistic entry point.”
Given the company’s latest 2023 outlook, Citi now forecasts 8.8k deliveries this year and 22.5k next year and is modeling a 2023E adjusted EBITDA loss of $2.4 billion narrowing to $1.0bln next year, before nearing breakeven in 2025E.
Shares of LCID are up 2.18% in pre-market trading on Monday.
