California-based luxury EV startup Lucid Group (LCID) sees opportunity in the Chinese market for electric cars — where Ford (F) is said to be scaling back. LCID stock slumped early Wednesday, trading near a 52-week low.
Lucid confirmed to Reuters June 9 that it is preparing to enter China, the world’s largest auto market. In the U.S., the luxury Lucid Air electric sedan starts around $87,400.
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The Chinese EV market is slowing, after the country phased out subsidies for electric vehicles. That fueled a price war led by Tesla (TSLA) and joined by both auto stalwarts and startups.
Among others, Ford discounted its Mustang Mach-E by about 40,000 RMB ($5,700).
On June 8, Chinese local media reported that Ford was paring back ambitions for the Mach-E in China amid poor sales. A restructuring will see the separate Mach-E team folded back into Ford China, one report said.
A Bloomberg report in May said Ford may cut more than a thousand jobs in China amid declining sales.
Ford launched the Mach-E in China in April 2021 with hopes for big sales to follow. The automaker has now stopped reporting sales by global regions.
On May 31, Saudi Arabia-backed Lucid raised about $3 billion through a stock offering and private investment. It said the new funding would help it bring advanced EV technologies to global users at a faster pace, including in China.
Some analysts say the luxury market for electric cars in China has been slow to electrify. It is dominated by ICE (internal combustion engine) vehicles and EREVs (extended range electric vehicles), a type of hybrid vehicle.
EV Startup Lucid, Ford Stock
Shares of Lucid carved more than 3% lowerWednesday after falling 2.5% to 6.31 on the stock market Tuesday. LCID stock is back near a January low of 6.09 after crashing June 1 following news a stock offering.
Ford stock continued to slip in Wednesday’s session after closing down 1.4% to 14.22 on Tuesday. Shares are in a ten-month consolidation and far below January 2022 highs.
Tesla stock popped 5.3%, before pulling back 2.5% on Wednesday.
Like many peers, EV startup Lucid is seeing losses mount amid recession fears and rising interest rates.
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