Image Source: Pixabay

New Three-Way Partnership

Please note Uber Partners with Lucid Motors, Nuro to Deploy 20,000 Robotaxis

Key Details

• The partnership—announced Thursday—will include the ride-hailing tech company investing $300 million into Lucid Motors to deploy 20,000 self-driving robotaxis over the next six years.
• The California-based robotics company, Nuro, will develop the autonomous technology used in the Lucid robotaxis.
• Uber plans to roll out the first Lucid robotaxis next year in a major urban hub—then scale up the service as demand grows.
• The global robotaxi market is projected to reach $118.61 billion by 2031 at a Compound Annual Growth Rate (CAGR) of 80.8%—with the robotaxi market in the U.S. expected to reach 3.30 billion by 2027.

The Problem and Opportunity With Lucid

The Motley Fool asks Is Lucid Group a Millionaire-Maker Stock?

Despite Lucid’s award-winning cars, its stock has plunged 96% from its peak.
The company still loses an average of more than $200,000 on each vehicle is sells.

Yet with Lucid’s new Gravity SUV rolling off production lines and the company’s vehicles still earning industry accolades for superior range and performance, could this beaten-down stock stage a remarkable comeback?

Lucid makes an exceptional car

In a relatively crowded EV market, Lucid’s vehicles stand out with some of the best technology in the industry, attention to detail, and premium luxury standards. The company’s Air Grand Touring sedan is one of the most powerful EVs on the market and provides the most range of any EV currently available.

In Car and Driver’s real-world tests, the Air Grand Touring delivered 410 miles of range. That’s significantly more than Tesla’s Model S, which, despite an officially listed range of 400 miles, only delivered 320 miles in the publication’s tests.

Since its release in 2022, the Air has won the U.S. News and World Report award for best luxury EV every year.

Lucid is still operating deep in the red

Despite the clear quality of its vehicles and its technology, Lucid has struggled. Sales have been relatively meager since the Air was launched in 2022. Last year, the company delivered just 10,241 vehicles, earning just over $800 million in revenue. In the same time period, Tesla delivered nearly 1.8 million vehicles, earning $77 billion in revenue.

Perhaps even more concerning than its top line is its bottom-line profitability — or lack thereof. Lucid lost $2.7 billion last year. For every car it sells, it loses quite a bit of money.

Last quarter, the company reported $235 million in revenue from delivering 3,109 vehicles. It also reported operational costs of $927 million. That means each car lost the company $222,000, well over the average price of a new Lucid. Even if you exclude sales, marketing, and administrative costs, and research and development expenses — and consider only pure production costs — the company is still losing $73,000 on every vehicle.

The Gravity SUV is already proving to be a better seller than the company’s sedan. But the question remains: Will it be enough of an improvement?

One survey by AAA showed that American attitudes toward EVs are the worst since 2019. Only 16% of respondents said they were likely or very likely to pick an EV as their next car. That’s down from 25% from just three years ago. Over the same period, the share of respondents who said they were unlikely or very unlikely to do so grew from 51% to 63%.

Still, these issues are why the stock is trading at the level it is, and if you have a hearty appetite for risk, Lucid is a speculative play that could pay off significantly. Just be prepared for the real possibility of losing your entire investment.

The Motley Fool report was written before the announcement but I am not sure if it would have changed.

Lucid (LCID) spiked from $2.30 to $3.37 on the news but is now at $3.04. Looking back, LCID hit $57.75 in November of 2021

Uber sees something in the relationship. But whatever Lucid is doing needs to be cheaper and faster.

Lucid Uses Lidar

Lucid’s DreamDrive system utilizes sensor fusion, combining data from lidar, cameras, radar, and ultrasonic sensors to create a comprehensive understanding of the car’s surroundings.

Tesla does not use Lidar. Without Lidar, I do not believe Tesla has much of a chance competing with Waymo.

Competition is Good

Elon Musk has been promising Full Self Driving (FSD) for decades.

Waymo has far superior technology. Anyone who disagrees is a fool or a liar. However, Musk is correct, Waymo is losing money on these rides.

For now, Waymo’s technology is far more expensive. But will that price differential be significant 10 years from now? 5? 3?

Waymo has a proven safety record. Tesla has nothing. And we still have serious doubts about Tesla in rain, snow, dust storms etc.

Finally, competition in EVs is heating up. Without FSD that works in all conditions Tesla has nothing.

Waymo Surges to 10 Million Paid Rides, Tesla Has Zero

On June 1, I commented Waymo Surges to 10 Million Paid Rides, Tesla Has Zero

Hello Elon Musk, you are now 10 million rides behind Waymo.

Since then, Tesla has finally launched.

On June 23, Reuters reported Tesla rolls out robotaxis in Texas test

Tesla (TSLA), opens new tab deployed a small group of self-driving taxis picking up paying passengers on Sunday in Austin, Texas, with CEO Elon Musk announcing the “robotaxi launch” and social-media influencers posting videos of their first rides.

The event marked the first time Tesla cars without human drivers have carried paying riders, a business that Musk sees as crucial to the electric car maker’s financial future.

On July 15, Reuters reported Alphabet’s Waymo picks up speed as Tesla robotaxi service expands

Alphabet’s (GOOGL), opens new tab Waymo robotaxis have driven more than 100 million miles without a human behind the wheel, doubling the mileage in about six months, a top company official said, as it speeds up deployment in U.S. cities amid rising competition.

Rival Tesla (TSLA), opens new tab is expanding its self-driving taxi service after a small trial with about a dozen of its Model Y SUVs in a limited area of Austin, Texas last month.

Competition is good.

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