It’s been a topsy-turvy week in the stock market. Mostly because of tariff news and the potential ramifications to the U.S. and world economies. One electric vehicle (EV) stock jumped today for another reason. Lucid Group (LCID -0.40%) raised some fresh capital this week, and today announced new expansion plans.
Lucid stock surged as much as 5.6% on Friday before losing steam. As of 1:10 p.m. ET Friday, shares were holding on to a 0.4% gain after the company announced plans to buy a manufacturing plant and other assets from bankrupt hydrogen-electric truck maker Nikola.
Lucid looks to grow capacity
Lucid has been known for its luxury Air sedan EV. It now is also offering a luxury SUV model that it hopes will expand its customer base. Early reviews are positive for the Gravity SUV that is now in Lucid showrooms. The new EV has 450 miles of range, and is the fastest charging EV outside of China, according to industry publication InsideEVs. The Gravity is also equipped to utilize Tesla‘s vast Supercharger network.
That new offering is potentially the catalyst Lucid needs to grow sales and move closer to profitability. The company has other plans to expand its market reach, too. A future, lower-priced EV would go a long way to help realize that. Lucid took a step toward increasing volume by announcing plans today to acquire Nikola’s Arizona manufacturing plant pending approval by a bankruptcy judge. Lucid’s existing plant is also in Arizona, located between Phoenix and Tucson.
Lucid closed on a $1.1 billion convertible note offering this week. While most of those funds will be used to pay off debt due next year, that will free up existing capital to fund the new asset purchase.
Along with the manufacturing facility, Lucid plans to offer employment to over 300 former Nikola employees, and the acquisition includes Nikola’s former headquarters and product development center.
Investors initially cheered Lucid’s new growth plans today. But it still has an uphill battle, especially in uncertain economic times. That helps explain today’s stock movement.
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