There’s a great deal to like about Lucid Motors stock and its SPAC accomplice Churchill Capital Corp IV (NYSE:CCIV). Clear is an unadulterated play on electric vehicles, one of the most sweltering and conceivably greatest development showcases out there today.
Shockingly, Lucid Motors stock has such a large number of unanswered inquiries now to be anything over a theoretical bet. However, in case you’re okay with playing the lottery, the drawn out potential gain in CCIV stock could be gigantic.
Clear Motors Stock Is a Long Shot
Clear Motors stock financial backers who are purchasing the stock now should ensure they comprehend what they are getting. Now, the stock addresses a greater amount of a thought than a real business. Clear is controlling for 577 vehicle conveyances and generally $100 million in income in 2021.
To place that number in context, Tesla (NASDAQ:TSLA) announced 184,800 conveyances and $10.3 billion in income in the principal quarter alone. General Motors (NYSE:GM) announced 821,000 conveyances and $32.4 billion in income in the quarter.
With all due respect, the organization is extending amazing development in 2022. The organization has guided for in excess of 20,000 vehicle conveyances one year from now. Notwithstanding, as Tesla financial backers know well indeed, cutoff times and focuses in the EV market can be interesting. Back in 2016, Elon Musk said Tesla would convey 1 million vehicles each year by 2020. In all actuality, they conveyed marginally not exactly a large portion of that number.
CCIV stock as of now has a $5 billion market cap, even after a sharp pullback from its unequaled high of $64.86 in February. The stock may appear to be a deal comparative with those crazy levels. In any case, Lucid Motors frozen in place has a ton to demonstrate to legitimize its current $5 billion valuation.
Better EV Investments
One of the greatest close term headwinds for Lucid Motors stock is the win and fails in SPAC stocks. Since mid-February, the Defiance Next Gen SPAC Derived ETF (NYSE:SPAK) ETF is down about 30%. This outpouring from SPACs steers clear of Lucid Motors stock or its business. Yet, financial backer notion toward SPACs is distinctly bearish right now. It stays not yet clear exactly how much that distrust will keep on burdening CCIV stock in front of the Lucid Motors stock consolidation.
In the interim, financial backers hoping to put resources into EVs have far more secure alternatives out there. Rather than searching for the “following Tesla,” why not simply purchase TSLA stock? I’m wary of Tesla’s swollen valuation. However, it’s significantly safer to me than an organization like Lucid that is basically attempting to fabricate another Tesla without any preparation.
I consider General to be as the best EV stock on the lookout. GM is putting $27 billion in EV and independent vehicles through 2025. It intends to deliver 30 EV models worldwide by 2025. Then, while Tesla is weakening its investors by more than once raising capital, GM is generally subsidizing its EV advancement by means of its very beneficial heritage inner ignition vehicle business. At long last, GM shares exchange at simply 0.6 occasion’s deals and 8.5 occasions forward profit, making the stock a genuine EV esteem play.
The Bull Case
Try not to misunderstand me. There is a reasonable bull case for Lucid Motors stock. In the event that the organization can emulate Tesla’s example by building an extravagance EV brand and afterward venturing into the mass market, the lucid lottery ticket could cash in big.
I felt a comparable path about Chinese EV stock Nio (NYSE:NIO) back in September 2019. At that point, the “lottery ticket” stock was exchanging under $2. That EV lottery ticket paid off in an immense manner, and NIO stock hit $66.99 recently.
There is no doubt Lucid Motors stock could be the following EV 10-bagger. In any case, wagering on any organization to be the “following Tesla” is an extremely remote chance to take.
In case you’re putting resources into the worldwide change to electric vehicles, Lucid Motors stock may not be your best play. In case you’re searching for a lottery ticket with a respectable possibility of paying off, CCIV stock is a hypothesis with colossal potential gain if the stars adjust for Lucid in the years ahead.
On the date of distribution, Wayne Duggan stood firm on a LONG foothold in GM. The assessments communicated in this article are those of the author, subject to the InvestorPlace.com Publishing Guidelines.
Wayne Duggan has been a U.S. News and World Report Investing patron since 2016 and is a staff author at Benzinga, where he has composed in excess of 7,000 articles. Mr. Duggan is the writer of the book “Beating Wall Street With Common Sense,” which centers around contributing brain research and reasonable systems to outflank the financial exchange.