Lucid's Strategic Approach to Enter the Chinese Electric Vehicle Market

Lucid, the U.S. EV start-up (ticker: LCID), is carefully considering its entry into the Chinese electric-vehicle market. The company's senior executive announced its intention to explore selling its cars in China during Germany's IAA Mobility event on Tuesday. However, Lucid's chief engineer, Eric Bach, emphasized the need to prioritize a well-executed Chinese expansion over rushing into the market.

Bach stressed the potential consequences of entering China on unfavorable terms, stating, "If you enter China on the wrong terms, you can make a lot of mistakes." Recognizing the dominant presence of BYD and Tesla in the market, Lucid aims to avoid missteps by strategically planning its entry.

BYD (1211.Hong Kong) currently leads the Chinese market, closely followed by Tesla (TSLA). In the second quarter alone, BYD sold over 700,000 electrified vehicles, predominantly in China, representing a nearly 100% increase compared to the same period last year. Although Tesla does not disclose geographical sales figures, it is estimated that they sold approximately 155,000 cars in China during Q2, experiencing a remarkable 70% growth.

While BYD and Tesla continue to dominate the market, Lucid remains optimistic about its prospects in China. Given the rapid growth and adoption of electric vehicles in the country, it is evident that joining the race is a logical move. Bach highlighted this opportunity by stating, "It's going to be likely the world's largest and fastest adopting EV market… It's something we are exploring, we are investing in."

In conclusion, Lucid recognizes the need for a meticulous approach when entering the highly competitive Chinese electric-vehicle market. By carefully strategizing its expansion, Lucid aims to make a significant impact in this rapidly growing industry.