Is This the Unexpected Autonomous Vehicle Stock Worth Investing in Right Now?

Automakers Embrace Innovation: AI, Robotics, and Autonomous Vehicles

Car manufacturers around the globe are venturing into cutting-edge fields like artificial intelligence, humanoid robots, and self-driving technology. Companies such as Tesla (NASDAQ: TSLA) are actively pursuing advancements in all these areas. For investors, backing a company that successfully capitalizes on autonomous vehicles or vehicle-as-a-service models could lead to significant portfolio growth. However, there’s also the risk of disappointment if these ambitions aren’t realized.

This brings up an important question: Does the recent collaboration between Lucid (NASDAQ: LCID) and Uber Technologies (NYSE: UBER) make Lucid an attractive investment opportunity right now?

Key Developments at Lucid

During its recent investor day in New York, Lucid outlined its immediate strategic goals, including the launch of a new midsize vehicle platform, the introduction of a next-generation electric drive unit, and the expansion of its autonomous vehicle partnership with Uber. The combination of the new midsize platform and the Uber partnership is particularly noteworthy for investors.

To recap, in January, Lucid, Nuro, Inc., and Uber revealed production-ready vehicles for their global robotaxi initiative, following initial autonomous road tests that began the previous month. While this marks a significant step forward, scaling this partnership for commercial use presents a major challenge—not just for these companies, but for the entire industry.

Specifically for Lucid, the partnership included a $300 million investment from Uber and plans to integrate Nuro’s self-driving technology into more than 20,000 Lucid Gravity SUVs, which would be used exclusively on Uber’s platform over the next six years. This collaboration has since evolved, and investors should pay attention, as it could be pivotal in achieving large-scale deployment of autonomous vehicles.

Introducing the Lunar Concept

Lucid and Uber are now finalizing plans to use Lucid’s upcoming midsize EV platform for robotaxi services, effectively doubling the program’s scope to around 40,000 vehicles. Lucid has achieved record deliveries for eight consecutive quarters, suggesting that earlier production issues and slow Gravity SUV ramp-up are largely resolved.

Lucid’s midsize platform is being developed from scratch to deliver what the company calls the world’s most advanced electric vehicles, aiming to reduce costs without compromising performance. The upcoming models—Cosmos, Earth, and Lunar—are designed for different customer needs, with Cosmos and Earth targeting those seeking luxury or adventure, respectively.

The Lunar concept stands out as a dedicated two-seat robotaxi, built on the same midsize platform and engineered for optimal efficiency throughout its lifecycle.

Implications for Investors

So, does Lucid’s expanded focus on autonomous vehicles make it a buy right now?

At this stage, the answer is no. Uber, which has over 20 partnerships in the autonomous vehicle space and doesn’t handle manufacturing, may actually be the more compelling part of this collaboration for investors.

Nevertheless, this partnership is a crucial step forward. The initial agreement served as a proof of concept, but the inclusion of Lucid’s midsize platform represents a significant escalation. It’s not just about doubling the number of vehicles; it’s Lucid’s first real attempt to scale production meaningfully, which is essential for making the economics of driverless vehicles attractive.

Until Lucid demonstrates it can achieve this scale with its midsize platform, investors should focus on how the company improves the profitability of its Gravity SUV, especially since competitor Rivian has already made progress in this area.

Is Now the Time to Invest in Lucid Group?

Before deciding to purchase Lucid Group shares, consider the following:

• When Netflix was recommended on December 17, 2004, a $1,000 investment would now be worth $494,747.*
• When Nvidia was recommended on April 15, 2005, a $1,000 investment would have grown to $1,094,668.*

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