It's been a bumpy ride recently for start-up electric vehicle (EV) makers. Fisker has been overtaken by bankruptcy, and many start-ups are dealing with horrendous cash burn, a lack of affordable EV options for mainstream consumers to adopt, and slowing EV sales growth in the U.S. market.
It's been especially difficult for Lucid Group (NASDAQ: LCID) because its Air sedan, by most accounts a fantastic EV, has a price range that starts around $71,000 and soars as high as $250,000 – there's not a huge market for the latter. That's why investor attention has focused on its upcoming SUV, the Gravity, that could boost sales and make or break its future.
On that note, here's some fantastic news for investors.
Rolling off the line
Lucid's 2025 Gravity SUV just took one giant leap for the EV maker in its plans to drive into customer driveways by the end of 2024. Many investors have held their breath, hoping for a near-flawless launch, no delays or cost overruns, and a path toward increasing sales organically.
Over the past few days, the first preproduction Gravity electric SUV drove off the production line, with Peter Rawlinson, Lucid's CEO and CTO, proudly announcing the milestone. Essentially, these preproduction vehicles are used for intensive testing to improve efficiency and eliminating production issues before final production starts for deliveries.
The Gravity is expected to take the baton from Lucid's Air sedan, and the three-row, seven-seat electric SUV boasts 440-plus miles of range -- essential to reducing range anxiety for the next adopters of EVs -- and a starting price under $80,000.
However, investors will still likely continue to hold their breath until we see if the price tag is low enough to generate significant demand. The importance of the Gravity SUV to Lucid's financial stability shouldn't be taken lightly, especially as the big SUV will open company doors to a new segment of consumers and won't compete directly with its sedan.
What's next, earth?
As the company works through preproduction, the next step over the coming months -- there isn't much time to successfully and fully launch the SUV before the calendar flips -- will be to flawlessly scale up production to commercial levels.
The Gravity will be more critical to Lucid's operations than simply opening doors to a new segment, as it is essentially a bridge to Lucid's midsize SUV, a Tesla Model Y competitor, that's coming in 2026, at a price tag starting under $50,000. The lower-priced midsize SUV could be the key to Lucid finally scaling up sales to the point it can convince investors it has a pathway to profitability down the road.
Not much is known about the upcoming midsize SUV, but Lucid did trademark the name "Lucid Earth," which seems to fit with its previous "Air" and "Gravity" nameplates. Further, the midsize SUV won't be a one-hit wonder, as the platform will bring a minimum of three distinct models, according to InsideEVs.
Lucid currently has a little momentum. The EV maker set a delivery record during the first quarter with nearly 2,000 deliveries, and then topped that with a 22% sequential gain to 2,394 deliveries during the second quarter. Getting the preproduction Gravity off the assembly line and beginning the production ramp-up over the next couple of months is a big step for Lucid, and so far so good. The SUV will rope in new customers in a new segment, while providing a stepping stone to an even more affordable SUV to follow -- all great news for Lucid investors after a bumpy year.
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Daniel Miller has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Tesla. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
