Is LCID, TSLA or RIVN the best EV stock?

  • Lucid Group suffered a heavy fall of 7% on Friday.
  • Inflation fears have hit high-growth technology companies hard.
  • Rivian fell more than 9% and Tesla 5% on Friday.

Electric vehicle stocks continue to suffer in the current hawkish environment. Thursday’s inflation data only hardened this year’s stance on high-growth tech stocks, and the situation is likely to worsen as the first quarter progresses. Tesla (TSLA) remains our choice due to its market-leading position and production capabilities. The Giga factories in Shanghai and Berlin will take care of this.

However, we still expect TSLA to underperform the index for at least the remainder of this quarter. We would not currently favor owning Rivian (RIVN), Lucid (LCID) or Tesla. From a business perspective, high-growth technologies and electric vehicles are not the sectors to favor this quarter. There may be pullbacks and opportunities for quick entries and exits, which we will try to identify, but the overall theme remains bearish.

Lucid Group Stock News

Lucid is due to release its results next week, but the date has yet to be confirmed by the company although the release is imminent. Production and sales will be the key parameters and could give the stock a boost in the short term. Investors will increasingly focus on the cash burn rate now. Input costs are rising, as are labor costs globally.

Note this quarter that, for the most part, earnings beat analyst estimates by nearly 70% or more, but stock prices are increasingly less responsive to earnings beats. What is increasingly important is the advice given. If Lucid fails to provide guidance, the stock should fall. If the forecasts are disappointing, the title should fall. Only confident advice will help Lucid. The environment has turned against the sector, so the risk-reward ratio is in our view on the downside.

Lucid Group Inventory Forecast

The move through the volume gap we identified has now more or less played out as we expected. Now Lucid is in a high volume zone, so that should at least slow the losses. Below $22, volume decreases again. We have a weak Relative Strength Index (RSI) and Moving Average Convergence Divergence (MACD). A break of $25.61 and it is likely to hit $22.25 fairly soon after. This level is huge to hold as the volume below is drying up again, meaning $16 is the next target. The break of the February 1 high of $30.85 confirms the low of $25.61 and ends the downtrend.

Lucid (LCID) Group Chart, Daily

The author is Long NIO.

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Karen J. Nelson