Lucid Group Investors: A Key Metric to Watch

Investors in electric vehicles (EVs) who have opted to invest in Lucid Group (NASDAQ: LCID) have to keep tabs on numerous statistics, from production numbers to delivery rates, as well as a variety of data in their financial reports.

However, there is one specific figure that Lucid investors should closely watch in the coming months, particularly one that plays a crucial role for a growing company like Lucid.

Focus on Capital Expenditures

Lucid has achieved an impressive 74% year-over-year increase in vehicle deliveries for 2024, indicating that the company is successfully attracting customers with its luxury electric vehicles. Yet, Lucid is still pushing forward to enhance its growth by broadening its product range. The company is set to introduce three midsize vehicle models, with the first production anticipated to begin in late 2026.

To assess how well Lucid is progressing toward this goal, investors should pay attention to the company's capital expenditures, commonly known as capex, in the upcoming quarters. During the latest fourth-quarter conference call, Lucid’s management projected the capex for 2025 to be around $1.4 billion, as the company continues to develop its AMP-1 and AMP-2 manufacturing plants located in Arizona and Saudi Arabia, respectively, both of which are intended to produce midsize vehicles.

The successful production of these midsize vehicles is vital for Lucid's future. The company sees this segment as a key strategy to broaden its customer base, given that these vehicles will have a starting price of around $50,000, which is significantly lower than the luxury Lucid Air sedan and the Gravity SUV. Importantly, many of the vehicles included in Lucid's agreement to deliver 100,000 vehicles to Saudi Arabia are projected to be Gravity and midsize vehicles.

Lack of Capex Spending Might Signal Issues

While it's important to listen to what management communicates, investors should also diligently monitor Lucid's capex in the near term. If the company fails to reach the anticipated $1.4 billion, it could indicate potential delays in starting midsize vehicle production and possibly hint at other challenges the company may face in the future.

Note: No positions were held by the author in any of the stocks mentioned.

Lucid, Investors, Capex