A new rival just threw some shade on Tesla’s Model S.
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For the second day in a row, Tesla (NASDAQ: TSLA) stock dropped Wednesday, closing the day down 2.3%.
You can probably blame Lucid Motors for that — and Investor’s Business Daily (IBD).
In a report out late Tuesday — one that investors didn’t get a chance to react to until today — IBD discussed a call held with investors by Lucid management, the new electric car company being brought public by the special purpose acquisition company (SPAC) Churchill Capital Corp IV (NYSE: CCIV).
On that call, Lucid CEO Peter Rawlinson confirmed that his company is on track to begin producing its Lucid Air electric vehicle (EV) by the second half of 2021. (Hint: We’re already in the second half of 2021, so that promise is getting a bit long in the tooth.) Nevertheless, according to Lucid’s promotional materials, the new Air beats Tesla’s Model S in battery efficiency. And Lucid is boasting that with reservations for the sale of 10,000 cars already, it is sitting on a sales pipeline worth $900 million.
That’s $900 million in revenue that one imagines would probably have otherwise gone to Tesla had it remained the only automobile manufacturer manufacturing electric cars.
From Elon Musk’s perspective, this is all probably fine. It was always his intention to ignite an EV revolution, and the more companies that go electric, the better, from his point of view — especially given his preference for building top-of-the-line electric supercars like the Roadster and Model S.
Nevertheless, competition is heating up for the electric car kingpin, as rivals from Ford to GM to now Lucid begin flooding the market with competing electric models. And with Lucid in particular targeting the top end of the market (The manufacturer’s suggested retail price — MSRP — for Lucid’s “Air Dream Edition” is reported to go as high as $162,000.), Tesla investors can no longer expect that Tesla will get to keep any specific segment of the EV market to itself.
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Rich Smith has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended Tesla. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.