Lucid Flags Tariff-Driven Price Surge, Localizes Battery Sourcing

Lucid Group, Inc. LCID came out with a stern warning from its interim CEO, Marc Winterhoff, stating that the U.S. automotive industry will witness a rise in the cost of vehicles, owing to Trump’s tariff policies. As modern automakers do not just limit sourcing of key components to local chains, the global supply of various resources has become indispensable. Although a 25-per-cent U.S. duty is to be levied only on non-American content, there remains no escape from the net surge in prices.

Automakers largely import graphite, lithium and semiconductors from all over the world in huge volumes. The tariffs enacted were expected to bring the industry to a standstill by disrupting the formerly favorable import scenario. Despite such challenges, the production still continues. For rescue came the supply chain strategies and established supplier networks from the pandemic era. Companies have also been figuring out ways to take advantage of the tariff exemptions. These factors combined, automakers have been able to absorb the impacts, but the hit is anticipated to show its consequences in due time.

As for Lucid, the company is making efforts to localize its supply chain to cut costs. Lucid’s EV batteries have become a subject of worry. To localize battery material sourcing, the company is going forward with a new deal with Graphite One for U.S.-processed graphite. Lucid’s previous partnership with Panasonic is being modeled to offset tariff burdens. Hence, the Kansas facility's produce will not be used by Lucid until 2026.

Shares of Lucid have slumped 38.6% over the past year compared with the industry’s 2.3% decline.

LCID’s Zacks Rank & Key Picks

LCID currently carries a Zacks Rank #4 (Sell).

A few better-ranked stocks in the auto space areFerrari N.V. RACE, Rivian Automotive RIVN and Westport Fuel Systems WPRT. While RACE sports a Zacks Rank #1 (Strong Buy) at present, RIVN and WPRT carry a Zacks Rank #2 (Buy) each at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for RACE’s current-year earnings is pegged at $9.89 per share, indicating a 7.97% year-over-year rise.Its earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, with an average surprise of 10.75%. RACE’s shares have gained 15.8% in the past year.

The Zacks Consensus Estimate for RIVN’s 2025 loss is pegged at $2.49 per share, indicating an improvement of 38.37% from year-ago levels. The company’s earnings beat the consensus estimate in two of the trailing four quarters, while missing it in the rest with an average surprise of 10.81%.

The Zacks Consensus Estimate for WPRT’s 2025 loss is pegged at $1.27 per share, indicating an improvement of 40.93% from year-ago levels. The company’s earnings beat the consensus estimate in three of the trailing four quarters.

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This article originally published on Zacks Investment Research (zacks.com).

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