JThe number of electric vehicle (EV) makers is growing rapidly, and stock buyers are keenly looking for what could ultimately become winning investments. Investment dollars have piled up, giving lofty valuations to companies that have yet to generate revenue, let alone profit.

Lucid Group (NASDAQ:LCID) has become a target of investors, in part because it has potential and hasn’t stumbled on the starting line yet. Lucid has delivered on its promise to begin shipping products to customers before the end of 2021, and investors believe there is great potential for growth opportunities. While he already has a market capitalization nearly $70 billion, 2022 could still be a real breakout year for the stock.

Image source: Getty Images.

Possible triggers to come

Lucid action, like You’re here‘s, has been boosted by investors betting on its potential in the face of what looks likely to become huge market demand. Tesla, of course, is far ahead of Lucid and already profitable. But it’s also now a $1 trillion-plus company, and Lucid has its own plans to move toward profitability.

In its 2021 mid-year update for investors, Lucid said it plans to expand production of its Air sedan from 2023 and will launch a new SUV later this year. He added that his cash at the time should fund his operations through 2022. But he has raised another $2 billion since then, bringing his cash to around $7 billion in 2022.

The company may have planned to accelerate its expansion plans when it raised this additional capital. Earlier this month, Lucid management responded to a Twitter user, stating, “Expansion to European markets will begin this year. Stay tuned for country-specific delivery information,” according to CNBC. And shareholders have reason to look forward to these expansion plans and more.

Expansion in Europe and beyond

In its global outlook for electric vehicles in 2021, the International Energy Agency said Europe has overtaken China as the world’s largest market for electric vehicles in 2020. And that growth is expected to continue. In 2021, battery electric vehicle registrations in Germany alone soared 83% year-on-year, according to energy transition journal Clean Energy Wire. This increase in EV purchases means that EVs accounted for almost 14% of new vehicles in Germany last year.

If Lucid announces that it is accelerating its planned expansion into this fast-growing market, investors might take notice. Another market that investors might not realize is on Lucid’s radar is Saudi Arabia. Saudi Arabia’s sovereign wealth fund invested more than $1 billion in Lucid in 2018, helping fund the company’s new manufacturing facility in Arizona.

The Saudi kingdom still holds great interest in Lucid, and this market could also help drive growth in 2022. At the beginning of 2021, the FinancialTimes reported that Lucid was in talks to build a manufacturing facility in Saudi Arabia, citing an interview with the governor of the wealth fund. This corroborated what Bloomberg had also reported.

Rear view of the Lucid Gravity SUV versus the Air sedan.

A preview of the new Lucid Gravity SUV. Image source: Lucid Group.

Lucid Accelerates Production and Inventory Valuation

Some of these growth expectations have already been factored into Lucid’s stock valuation. For now, Lucid is focused on the second phase of expansion of its Arizona plant, which it launched in the third quarter of 2021. This expansion includes production capacity for its future Gravity SUV.

Investors will be watching Lucid’s reported progress on its production ramp closely as the year progresses. But the recent capital raise of $2 billion could also be a signal that other investments could arrive this year, ahead of previously announced schedules. If its product is well received and expansion plans are accelerated, Lucid’s stock could see a breakthrough in 2022.

10 Stocks We Like Better Than Lucid Group, Inc.
When our award-winning team of analysts have stock advice, it can pay to listen. After all, the newsletter they’ve been putting out for over a decade, Motley Fool Equity Advisor, tripled the market.*

They have just revealed what they believe to be the ten best stocks for investors to buy now…and Lucid Group, Inc. wasn’t one of them! That’s right – they think these 10 stocks are even better buys.

View all 10 stocks

* Portfolio Advisor Returns as of December 16, 2021

Howard Smith owns Lucid Group, Inc. The Motley Fool owns and recommends Tesla and Twitter. The Motley Fool has a disclosure policy.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.