We recently compiled a list of the 7 Best EV Stocks Under $50. In this article, we are going to take a look at where Lucid Group, Inc. (NASDAQ:LCID) stands against the other EV stocks under $50.

EV Sales are Growing

Since 2018, electric vehicle (EV) sales have been rapidly growing as the world tries to reach its carbon neutrality goal by 2050. According to the International Energy Agency (IEA), only 2% of new vehicles registered globally were electric vehicles, and reached 18% by the end of 2023. Even though most of these sales were concentrated in China, Europe, and the US, other markets such as India, Thailand, Vietnam, and Latin America have also been adopting the EV trend at a fast pace.

In 2024, while the high costs due to interest rates stalled EV sales a little, they are still growing at a significant pace as the sales reached 3.4 million units in Q1, compared to 2.6 million in the first quarter of 2023, according to the IEA. Furthermore, the accounting and consulting firm, PwC analyzed 21 markets and found out that in the second quarter of 2024, 37% of vehicles sold in these markets were battery-electric vehicles (BEVs), plug-in hybrid electric vehicles (PHEVs), or hybrids, marking an increase from 30% in the same period of 2023. At the same time, overall EV sales rose by 21% compared to Q2 2023, while sales of internal combustion engine (ICE) vehicles declined by 9% during the same period.

BloombergNEF’s Long-Term Electric Vehicle Outlook shows that as technology improves and battery prices drop, EV adoption is increasingly driven by consumer demand. Passenger EV sales are expected to surpass 30 million units in 2027 and reach 73 million units by 2040.

Global EV Market to Reach $63 Trillion by 2050

Despite such progress, strong policy support is still needed, as only 69% of the global car fleet is expected to be electrified by 2050 in the base case scenario, short of the 100% target in the Net Zero scenario.

Heavy trucks and other segments lag in reaching net zero and full combustion vehicle sales need to stop by 2038 to reach the goal. The report states that the global EV market could reach $63 trillion by 2050, with significant investment needed in battery production and charging infrastructure.

According to estimates by Fortune Business Insights, the global EV market is expected to grow at a compound annual growth rate of 13.8% from 2024 to 2032, and Asia is currently the dominant region with a 51.24% market share. This is the time for investors to take positions in EV stocks, as the EV market is just getting started and is poised for a lot of growth.

Our Methodology

For this article, we used the FinViz stock screener to identify over 25 electric vehicle manufacturers with a stock price of under $50, as of August 7. We narrowed down our list to 7 stocks that were most widely held by institutional investors and listed the stocks in ascending order.

Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).

Lucid Group, Inc. (NASDAQ:LCID)

Number of Hedge Fund Holders: 17

Share Price as of August 7: $2.91

Lucid Group, Inc. (NASDAQ:LCID) is a U.S.-based electric vehicle manufacturer and designer. The company specializes in creating high-end electric vehicles to meet the demand for luxury EVs. A significant aspect of the company’s approach is its focus on cutting-edge technology, which plays a crucial role in creating premium vehicles.

This innovative technology is evident in the design of its motors and the performance of its batteries, enabling Lucid Group (NASDAQ:LCID) to provide exceptional range and superior performance in the market. The company is one of the best EV stocks under $50.

Lucid Group (NASDAQ:LCID) is generating significant excitement with its upcoming Gravity SUV, a key product in its plans to expand its presence in the electric vehicle market. The Gravity, which is set to hit the streets by the end of 2024, recently saw its first preproduction model come off the assembly line. This SUV is more than just a new vehicle for the company, it is a crucial step toward reaching a broader customer base.

Additionally, Lucid Group (NASDAQ:LCID) secured substantial financial support from an affiliate of the Saudi Arabian Public Investment Fund (PIF). This includes a $750 million loan facility and a $750 million investment in convertible preferred stock.

This $1.5 billion in funding is crucial for the company, assisting with both capital expenditures and operational costs as it ramps up production of the Gravity SUV. The support positions the company to potentially capture a larger share of the consumer market beyond its current focus on high-end electric sedans.

Lucid Group (NASDAQ:LCID) was held by 17 hedge funds in the first quarter and the stakes amounted to $26.85 million. Coatue Management is the most significant shareholder of the company and has a position worth $8.42 million, as of March 31.

Overall LCID ranks 7th on our list of the best EV stocks to buy. You can visit 7 Best EV Stocks Under $50 to see the other EV stocks that are on hedge funds’ radar. While we acknowledge the potential of LCID as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than LCID but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

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Disclosure: None. This article is originally published at Insider Monkey.