Many Lucid Group (NASDAQ:LCID) stock investors are underwater now, but they shouldn’t lose hope. A share-price recovery is likely, as the market has already punished Lucid for its lackluster 2022 performance. Besides, Lucid Group’s market presence is expanding abroad, and the automaker could establish a strong foothold in Saudi Arabia.
The bears and short-sellers will undoubtedly point out that Lucid Group only produced 7,180 vehicles last year. This puts Lucid far behind Tesla (NASDAQ:TSLA). However, Lucid did exceed its annual production guidance of 6,000 to 7,000 vehicles.
Still, some investors were unimpressed and dumped their Lucid shares. They may come to regret that decision, though, as Lucid ambitiously plays catch-up with expansion efforts on multiple continents.
Traders Beat Up LCID Stock
Investors were merciless with LCID stock last year. They brought the Lucid Group share price down from $42 to just $6 and change, though it has recovered to $8 this year.
Bear in mind, 2022 was a terrible year for Nasdaq stocks in general and EV stocks in particular. Lucid Group wasn’t the only victim of a risk-off mood in the markets; TSLA stock also lost substantial value.
Moreover, Lucid Group made progress in expanding its market presence last year. The automaker opened its first retail Studio location in Texas, as well as its first retail and service center in the Netherlands.
By the end of the year, the Lucid Air EV model had already arrived in Europe with deliveries to customers in the Netherlands and Germany. Yet, Lucid certainly wasn’t finished with its rapid expansion plans.
Lucid Group Could Be a Big Winner in Saudi Arabia
So far in 2023, Lucid Group has opened retail studio and/or service center locations in California, Canada and Norway. If Lucid were really in bad shape, the company wouldn’t have the ambition, or even the means, to expand so quickly.
Yet, Lucid Group’s fastest expansion could actually take place in the Middle East. As I explained earlier this year, Saudi Arabia’s sovereign wealth fund, known as Public Investment Fund, added a nearly $1 billion position in LCID stock.
This isn’t the only sign that Lucid Group could dominate the Saudi EV market. Reportedly, the “first Saudi-assembled Air electric sedans” are expected to “hit the road in September 2023.” This effort would build upon Lucid Group’s progress in Saudi Arabia, as the company has been delivering its Air EVs there since January.
Furthermore, Lucid Group is reportedly partnering with Saudi digital technology enabler STC Group to “provide direct-to-consumer connectivity services for Lucid customers” in Saudi Arabia. This connectivity will enable “in-car infotainment and over-the-air functionality” in Lucid’s EVs.
Beaten-Down LCID Stock Has a Strong Chance of Going Back Up
The wholesale dumpage of Lucid Group shares in 2022 was extreme — and probably overdone. Lucid produced a small number of EVs that year, but the automaker exceeded its annual production guidance and expanded into new regional markets.
Most importantly, Lucid Group isn’t just a local automaker. The company has broad-ranging international ambitions. This year, Lucid could establish a strong EV market presence in Saudi Arabia. Therefore, investors who can tolerate some risk should consider a small share position in LCID stock.
On the date of publication, David Moadel did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.