How to Buy Lucid Motors (LCID) Stock
Electric vehicles have been gaining in popularity for years, and the trend has only strengthened with gas prices skyrocketing. As of late April 2022, the national average is $4.11 a gallon, up from just $2.87 a year ago.
While Tesla Inc. (TSLA) has gotten the lion’s share of attention for their luxury electric cars, there’s a newer competitor making waves: Lucid Motors.
Over the past three years, Lucid Motors has experienced substantial growth, and its stock price has increased by about 82%. Whether you’re already a fan of the Lucid Air or simply believe in the future of electric vehicles, here’s how to buy Lucid Motors stock.
How to Buy Lucid Motors (LCID) Stock
1. Find a Broker
To invest in Lucid Motors, you need to start by opening an account with a broker. There are hundreds of brokers and investment apps available, so it’s worth looking for a broker that offers low account minimums and minimal fees.
Depending on your brokerage platform, you can usually choose between several account options. If you’re focused on long-term retirement savings, you may want to consider opening an individual retirement account (IRA) to take advantage of its valuable tax benefits. For shorter-term goals, you could open a taxable brokerage account.
If that feels overwhelming, check out our listing of the best online brokers for beginners.
2. Research Lucid Motors’ Financials
Investing in a single company can be risky, so do your homework to ensure you’re making a sound decision.
Lucid Motors is a publicly-traded company, so it is required to file its financial reports with the U.S. Securities and Exchange Commission (SEC). Potential investors can view those documents, as well as the company’s investor presentations and press releases, on Lucid Motors’ investor relations site.
Notably, the company’s annual report points out that Lucid Motors has incurred net losses each year since its inception, and expects to face increasing expenses and losses for the foreseeable future. As of December 21, 2021, the company’s accumulated deficit was approximately $6.1 billion.
That’s not uncommon for a relatively young and rapidly growing company, but it does mean that investing in Lucid Motors may be riskier than investing in an established company with a history of strong returns.
Take the time to review the risks facing the company, and how it plans to stand out in a competitive market. For instance, Lucid Motors’ cheapest vehicle starts at $77,400, far more than the average sedan. Its investor presentations highlight that its target market is “post-luxury” consumers, or high-income individuals interested more in sustainability and quality than status symbols.
Like Tesla, Lucid Motors eschews the traditional car dealership model by selling directly to consumers online and through its retail sales network. Two additional differentiating factors in the company’s favor are that the Lucid Air has a range of over 500 miles on a single charge, and it was selected as the 2022 MotorTrend Car of the Year.
3. Choose an Investment Strategy
When you’re ready to invest, think about how much money you have on hand to put into stocks. The amount you want to invest is dependent on a variety of factors, including the status of your emergency fund, your other investments and the price of your selected stock.
As of April 20, 2022, Lucid Motors was trading at about $21. That’s a relatively low price; if you invest a few hundred dollars, you could purchase several shares.
Two methods of investing are lump sum investing and dollar cost averaging. If you invest a lump sum, you take one fixed amount and invest it all at once. By contrast, dollar cost averaging works with smaller amounts. You invest the same amount but on a fixed schedule, like $50 per week.
Lump sum investing makes sense if you expect a stock to perform very well and you want to lock in its current price. Dollar cost averaging is a better choice for longer-term investments since it helps reduce your level of risk.
4. Place an Order
Once you’ve opened an account and have decided how much to invest, you can buy your first shares of Lucid Motors. To place an order, enter your broker’s trading platform and type in Lucid Motors’ ticker symbol, LCID. Enter how many shares you want to purchase or the amount of money you want to invest, and then select the type of order you want to place.
There are multiple order types, but the most common are market and limit orders. With a market order, the order goes through at the current price during trading hours. Limit orders are processed only when the stock reaches a certain price that you specify when you place the order. Limit orders are a good idea if you expect the stock to drop in the near future and you want to buy shares as soon as the price decreases.
Lucid Motors is traded on the Nasdaq stock exchange. The Nasdaq’s trading hours are Monday through Friday, from 9:30 a.m. until 4:00 p.m. ET. The Nasdaq also has pre-market and after-hours trading. Pre-market hours are from 4:00 a.m. until 9:30 a.m. ET, and after-hours trading is from 4:00 p.m. until 8:00 p.m. ET.
5. Have a Plan to Sell
Regardless of your investment goals, there will likely be a time when you need to sell your shares of Lucid Motors.
To sell your stock, enter the broker’s trading platform and type in the ticker symbol and the amount you want to sell or the dollar amount. As with buy orders, you can decide to sell your shares immediately at the current price, or only sell once the stock reaches a certain price.
If you’re thinking about selling your shares of Lucid Motors—or any stock—and have earned a profit, you may be responsible for capital gains taxes. Before making any decisions about your portfolio, talk with a tax professional to ensure you have a plan in place to minimize your taxes and avoid a surprise tax bill.
Alternative Ways to Invest in Lucid Motors
Investing in a single company is always risky. Your investment is entirely dependent on that one company’s performance and if it does poorly—or goes out of business completely—you could lose a substantial amount of money.
Experts recommend investing in a diversified portfolio composed of many stocks to avoid this. While you can create your own portfolio of individual stocks, it can be time-consuming to do on your own. An alternative strategy is to invest in index funds and exchange-traded funds (ETFs). These funds are made up of hundreds of companies, so it spreads out your investment and reduces the level of risk.
There are over 70 ETFs that currently provide exposure to Lucid Motors, including funds focused on clean energy, auto manufacturing and the overall stock market. Some of the most popular include:
- ALPS Clean Energy ETF (ACES): This fund aims to track the performance of the CIBC Atlas Clean Energy Index. Lucid Motors’ is one of the largest holdings within the fund.
- Invesco QQQ Trust (QQQ): This fund corresponds to the performance of the Nasdaq 100 Index. Lucid Motors makes up about 0.27% of the fund’s allocation.
- Vanguard Total Stock Market ETF (VTI): This fund allocates 0.03% of its shares to Lucid Motors. While that’s a small percentage, VTI gives you exposure to a wide range of companies, it tracks the performance of the CRSP U.S. Total Market Index, and invests in small-, mid- and large-cap companies.