Lucid Group shares surge following its Technology and Manufacturing Day

Lucid Group (NASDAQ:LCID ) shares surged over 6% on Wednesday following the company's Technology and Manufacturing Day, where it showcased its technological advancements and provided updates on its roadmap.

At the event, held at Lucid's Arizona manufacturing plant, the company stressed the efficiency and cost advantages of its technology, particularly in powertrain components.

Following the event, analysts at BofA noted that Lucid's advancements position the company well against competitors, stating, "What emerged from the presentation is the clear advantage of LCID's tech and, more impressively, their potential cost effectiveness."

However, BofA maintained a Neutral rating, citing the need for production scale to achieve profitability.

Lucid also provided updates on its upcoming models. Production of the highly anticipated Gravity SUV is set to begin in late 2024, with the company teasing its next major release—a mid-size crossover vehicle expected in 2026.

BofA highlighted the potential market opportunity, with Lucid estimating the SUV's total addressable market to be 30 times larger than the Lucid Air sedan.

Analysts at Needham & Company were also cautious, reiterating a Hold rating on the stock. They acknowledged the company's momentum in 3Q deliveries but raised concerns about long-term profitability.

The firm said it sees Gravity as a second chance at a first introduction for the brand, but new information at the event was "minimal, and [the] scale required to drive positive earnings is still an unknown."

Despite some reservations, Lucid's technology, especially its efficiency in EV powertrains, remains a focal point for investors. The company's ability to cut costs through its technology could open doors for potential licensing agreements, similar to its partnership with Aston Martin, as noted by BofA.

While Lucid's tech innovations have excited the market, analysts remain divided on its path to profitability amidst a challenging EV demand landscape.

Source: Investing.com