Earnings results often indicate what direction a company will take in the months ahead. With Q2 behind us, let’s have a look at Lucid (NASDAQ:LCID) and its peers.

Much capital investment and technical know-how are needed to manufacture functional, safe, and aesthetically pleasing automobiles for the mass market. Barriers to entry are therefore high, and auto manufacturers with economies of scale can boast strong economic moats. However, this doesn’t insulate them from new entrants, as electric vehicles (EVs) have entered the market and are upending it. This has forced established manufacturers to not only contend with emerging EV-first competitors but also decide how much they want to invest in these disruptive technologies, which will likely cannibalize their legacy offerings.

The 7 automobile manufacturers stocks we track reported a satisfactory Q2. As a group, revenues beat analysts’ consensus estimates by 5.4%.

Inflation progressed towards the Fed's 2% goal recently, leading the Fed to reduce its policy rate by 50bps (half a percent or 0.5%) in September 2024. This is the first cut in four years. While CPI (inflation) readings have been supportive lately, employment measures have bordered on worrisome. The markets will be debating whether this rate cut's timing (and more potential ones in 2024 and 2025) is ideal for supporting the economy or a bit too late for a macro that has already cooled too much.

Amidst this news, automobile manufacturers stocks have had a rough stretch. On average, share prices are down 15.8% since the latest earnings results.

Lucid (NASDAQ:LCID)

Lucid (NASDAQ:LCID) produces luxury electric vehicles that combine high-end design with electric technology.

Lucid reported revenues of $200.6 million, up 32.9% year on year. This print exceeded analysts’ expectations by 4.1%. Overall, it was a satisfactory quarter for the company with an impressive beat of analysts’ volume estimates but a miss of analysts’ operating margin estimates.

"I'm very encouraged by our sales and market share momentum we're experiencing, the benefits we're realizing from our cost optimization programs, and the excitement that's been building into the Lucid Gravity launch, setting a strong foundation for the rest of the year," said Peter Rawlinson, CEO and CTO of Lucid.

Unsurprisingly, the stock is down 8% since reporting and currently trades at $2.76.

Is now the time to buy Lucid? Access our full analysis of the earnings results here, it’s free.

Best Q2: General Motors (NYSE:GM)

Founded in 1908 by William C. Durant, General Motors (NYSE:GM) offers a range of vehicles and automobiles through brands such as Chevrolet, Buick, GMC, and Cadillac.