Shares of Lucid Group (NASDAQ: LCID), an electrical car marker, tumbled at present seemingly as buyers reacted to President-elect Donald Trump’s alternative to guide the Environmental Safety Company (EPA).
Lucid’s share worth was down by 7.6% as of midday ET.
A less-favorable stance towards EVs could possibly be on horizon
Former Congressman Lee Zeldin was chosen by Trump to move up the EPA yesterday, and that seemingly spooked some Lucid buyers as a result of Zeldin has voiced some less-than-favorable stances towards inexperienced tasks prior to now.
The U.S. authorities at the moment provides a tax credit score as much as $7,500 for some new EV purchases, however some persons are involved that EPA’s stance towards electric vehicles may shift beneath the brand new administration. Trump mentioned again in August that he’s open to ending the present EV tax credit.
After all, there’s not telling precisely how the brand new administration may have an effect on the EV market, however the uncertainty comes at a time when Lucid and different electrical car start-ups are looking for their footing. Any shift within the EPA’s stance away from selling or aiding the EV market may have detrimental penalties for Lucid and its friends.
Lucid reported third-quarter monetary outcomes final week and had a web lack of $992 million. The corporate is attempting to extend manufacturing of its Air sedan and its newly launched Gravity SUV and lately bought 262 million extra shares to lift $1.67 billion.
An unsure time for EV firms
Lucid and different EV makers are already beneath strain proper now after years of excessive inflation and rising manufacturing prices have put strain on their companies. Moreover, excessive rates of interest have made financing a brand new EV costlier for a lot of potential patrons.
I am a long-term optimist relating to EVs (and an investor in fellow EV start-up Rivian), however it’s comprehensible why Lucid buyers could also be involved about an incoming administration that is likely to be much less passionate about electrical autos. For now, buyers ought to take a wait-and-see method earlier than making any funding choice based mostly on potential strikes by the federal government.
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Chris Neiger has positions in Rivian Automotive. The Motley Idiot has no place in any of the shares talked about. The Motley Idiot has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the writer and don’t essentially replicate these of Nasdaq, Inc.
