Key Metric for Lucid Group Investors to Monitor

Investors in the electric vehicle (EV) sector who have decided to back Lucid Group (NASDAQ: LCID) have a variety of numbers to focus on. They need to keep track of metrics like vehicle production, delivery figures, and the details from the financial statements.

Yet, as Lucid moves forward, there's one crucial figure that investors should pay close attention to in the coming months. This particular number is vital for the growth goals of the company.

Keep an Eye on Capital Expenditures

Lucid has made impressive strides, achieving a remarkable 74% year-over-year increase in vehicle deliveries for 2024. This accomplishment highlights the company's ability to capture customer interest with its luxury electric vehicles. However, Lucid is not stopping there; it plans to further broaden its product offerings. Key to this strategy is the introduction of three new midsize models, the first of which is scheduled to begin production in late 2026.

To gauge Lucid's success in reaching these milestones, investors should closely monitor the company's spending on capital expenditures (capex). During the recent fourth-quarter conference call, management outlined expectations of around $1.4 billion in capex for 2025. This investment is essential as Lucid continues to grow its manufacturing facilities in Arizona (AMP-1) and Saudi Arabia (AMP-2), both of which will focus on producing the upcoming midsize models.

The successful manufacturing of these midsize vehicles is crucial for Lucid's future. This segment is seen as a strategic opportunity to attract a broader audience since these vehicles will start at a lower price point—around $50,000—compared to the Lucid Air sedan and the Gravity SUV. Furthermore, the agreement with Saudi Arabia includes the delivery of 100,000 vehicles, primarily consisting of the Gravity and new midsize models.

A Warning Signal with Low Capex Spending

Investors should not simply accept the company's forecasts at face value; it is important to watch Lucid's capex closely in the upcoming quarters. A failure to meet the anticipated $1.4 billion capex may indicate potential delays in the production of the midsize vehicles, raising concerns about the company's operational challenges ahead.

Note: The author does not hold any positions in the stocks discussed. There are no affiliations with the stocks mentioned in this article.

EV, Investment, Growth