Logo of Lucid Motors
Bank of America believes Lucid Motors has the potential to succeed in the world of electric vehicle startups.
The US investment bank initiated coverage of Lucid Motors, on Sept. 15, with a “Buy” recommendation and a target price (TP) of $30, which is 58% higher than the closing price on Sept. 14.
The bank’s analysts compared the new public company to Tesla and Ferrari, noting that Lucid's business model takes a page from the automakers' books.
Lucid provides car parts for Formula E, an electric car race, making its business model similar to Ferrari, which supplies parts to Formula 1.
The company’s strategy resembles Tesla's initial launch of more luxurious models before expanding into the wider market, the report said.
Lucid's shares were up 5.07% at $19.91 at the end of session on Sept. 15, with a market capitalization of $32.2 billion.
In September 2018, the Public Investment Fund (PIF) signed an investment agreement of more than $1 billion (SAR 3.75 billion) with Lucid Motors through a special-purpose vehicle wholly-owned by the fund.
On Jan. 14, Yasir Al-Rumayyan, governor of PIF, said the fund owns 67% of Lucid, with an investment volume of $1.3 billion (about SAR 4.9 billion).
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