Luxury EV startup Lucid Group sees opportunity in the Chinese market for electric cars — where Ford is said to be scaling back. Lucid stock hit a new low Thursday while Ford stock rallied.
California-based 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.
The Chinese EV market is slowing, after the country phased out subsidies for electric vehicles. That fueled a price war led by Tesla and joined by auto stalwarts and startups alike.
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 may see the separate Mach-E team folded back into Ford China, one report said.
Bloomberg reported in May that 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.
Many foreign auto giants besides Ford are struggling in that country's hyper-competitive car market.
EV Startup Lucid, Ford Stock
Shares of Lucid shed 5.3% to 5.75 on the stock market Thursday, falling for a fourth straight day. LCID stock hit a 52-week low of 5.72 intraday. It had crashed June 1 amid news of a stock offering.
Ford stock rose 1.2%, snapping three consecutive down days. Shares are in a ten-month consolidation and far below January 2022 highs.
The Wall Street Journal reported Thursday that a Ford-SK battery joint venture received a record $9.2 billion government loan to make batteries for electric vehicles.
Tesla stock gained nearly 2%.
On May 31, Lucid announced a $3 billion raise through a stock offering and private investment. The Saudi Arabia-backed startup said it plans to use the new funding to bring its advanced EV technologies to Chinese and global users at a faster pace.
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.
Like many EV startup peers, Lucid is seeing losses mount amid recession fears and rising interest rates.
