It’s been another week for the auto industry and the analysts that cover it.
A Benchmark analyst has a second opinion on Lucid’s Q4 earnings. Bank of America has a stern warning about Trump’s tariffs, and a Midtown-based investment arm is initiating coverage on hot auto stocks with a bullish outlook.
Lucid electric cars sit parked in front of a Lucid Studio showroom in San Francisco, California. Benchmark analyst Mickey Legg published a new research note reaffirming his ‘Buy’ rating and $5.00 price target on Lucid Motors following a meeting with its management.
Justin Sullivan/Getty Images
New Hope for Lucid
On February 25, the same day it was to reveal its Q4 2024 and year-end 2024 earnings, Lucid Motors announced that its CEO and CTO Peter Rawlinson stepped down from his leadership roles and would transition to a lesser advisory role within the company.
In a statement posted on his LinkedIn page, Rawlinson did not give any reason for his departure, simply stating that it felt like “the right time” following the launch of Lucid’s second model, the Gravity.
“I am incredibly proud of the accomplishments the Lucid team have achieved together through my tenure of these past 12 years,” Rawlinson said. “We grew from a tiny company with a big ambition to a widely recognized technological world leader in sustainable mobility.”
However, Lucid reported a net loss of $397 million during Q4 2024, following a solid streak in the red. In total, the automaker had a net loss of $2.7 billion in 2024, amounting to a loss of about $300,000 from every vehicle it produced.
Related: Analysts turn bearish on Lucid, bullish on other Tesla rival
Though this has turned some analysts, including Bank of America’s John Murphy quite bearish, Benchmark analyst Mickey Legg feels confident.
On March 7, Legg published a new research note reaffirming his ‘Buy’ rating on Lucid Motors and $5.00 price target following a meeting with the company’s management.
“We spoke with LCID’s new Interim CEO, Marc Winterhoff, and CFO, Taoufiq Boussaid, yesterday and came away confident in the new team’s ability to grow sales and scale manufacturing through 2025,” Legg wrote.
He also believes that Lucid “is transitioning to a new stage with a focus on expanding scale and cost efficiencies in preparation for its midsize vehicle, slated for SOP in late 2026.” Additionally, he believes profitability “will be unlocked with the lower-cost midsize platform (
“The company has indicated that it is in discussion with several OEMs for potential technology licensing agreements,” he said.
A 2024 Jeep Gladiator on the assembly line at the Toledo Assembly Complex.
Stellantis
Bank of America has a warning about the American car industry.
During a White House press briefing on March 5, Press Secretary Karoline Leavitt said President Donald Trump would grant a one-month exemption for vehicles covered by the United States-Mexico-Canada Agreement (USMCA) from newly imposed tariffs on Mexico and Canada, noting that it came at the behest of Detroit’s Big Three automakers.
“Reciprocal tariffs will still go into effect on April 2nd, but at the request of the companies associated with the USMCA, the president is giving them an exemption so they are not at an economic disadvantage,” the press secretary said.
Auto bigwigs like Ford’s CEO Jim Farley have exercised caution about the impact of such tariffs. During an investor conference last month, he warned that “a 25% tariff across the Mexico and Canadian border will blow a hole in the U.S. industry that we have never seen.”
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In a note from Bank of America Global Research, its analysts note that the Trump Administration is clearly trying to restore auto production and jobs in the US. Still, this process could take longer than a Presidential term and may not be a good idea for auto parts.
“Admittedly, there is some potential for complete vehicle assembly, but building out capacity and staffing a plant would take 3+ years. However, for most auto parts, it is not viable as it would be even more expensive to produce in the US than paying the 25% tariff,” BofA said.
However, the American bank denotes that suppliers are finding Mexican labor too expensive for their bottom lines and looking for third ways out in other parts of the world.
“It should also be noted that many suppliers are already indicating labor cost inflation in Mexico is so elevated that they need to relocate production to South/Central America to remain viable.”
Chevrolet Silverado pickup trucks at a Chevrolet dealership in Colma, California, US. TD Cowen analyst Itay Michaeli named General Motors and Tesla as “defensive” plays, citing the former’s dominance in the North American pickup truck market.
Toronto Dominion’s Defensive Power Play
On March 6, analyst Itay Michaeli from TD Cowen, the Midtown-based investment arm of Toronto-headquartered TD Securities, initiated coverage of several automakers, including Detroit’s Big Three, Tesla, and Lucid.
Michaeli initiated his coverage of the automakers by giving “hold” ratings and conservative price targets for both Ford (F) and Stellantis (STLA) , as well as Lucid (LCID) . However, he was bullish on both General Motors (GM) and Tesla (TSLA) , issuing them both Buy ratings.
In his note about the Elon Musk-led company, he issued a price target of $388, citing the brand’s upcoming models and autonomy project developments as key catalysts behind his ratings.
“Both bull & bear cases have merit, but with the stock meaningfully pulling back, we’re tactically bullish on several potentially consequential catalysts this year (EV launches, AV eyes-off deployments, robotics),” Michaeli wrote. “Tesla is also less exposed to tariffs. Setup feels similar to last year’s. Q1 likely challenging.”
Related: Fact Check: Tariffs will help the car industry
In a March 7 appearance on Yahoo Finance’s Market Domination, Michaeli explained that General Motors and Tesla are both “defensive” plays, where the traditional “headwinds that we read about and look at in the automotive industry really don’t apply to as meaningfully or even at all,” noting that the two stocks have something going for them that gives them some sort of Teflon.
“One of the strongest end markets we think globally in automotive is the North American truck market. We think it is a majority of GM’s earnings and Ford’s as well,” he explained. “These are markets that, if you look at the multiples on these stocks that have been pricing in Auto and peak margins for quite some time. These are markets that can still grow, that can flourish, and they can provide a base for these companies to be able to invest in future growth in [Electric Vehicles], [Autonomous Vehicles], and software […].”
Specifically, regarding Tesla, he downplayed the brand risk of its CEO, Elon Musk, instead citing the rollout of future products as a beacon of hope for its future.
“There’s still a lot of expansion in EV demand around the country and globally. We even think that Tesla has an opportunity to regain some shares in some of the top EV counties, but the company has lost the market share,” he said. “And certainly as they make progress on self-driving, whether that’s eyes on or eyes off, any incremental of feature of value add can also accure to the company’s market share and brand perception.”
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