The world’s largest asset management firm, BlackRock, offloaded a significant portion of its shares in electric vehicle (EV) manufacturer Lucid during the third quarter of this year. The move came as EV stocks plummeted, fueled by concerns that former President Donald Trump’s potential return to power could lead to eliminating EV subsidies.
According to Fintel, on Tuesday, BlackRock reduced its stake in Lucid by 4.8%, selling 2,171,966 shares in the third quarter. This left the firm holding 43,056,832 Lucid shares at the end of the period, valued at approximately $152 million. BlackRock had initially held 45,228,798 shares in the second quarter.
Over the past three years, BlackRock has significantly increased its investment in Lucid, adding 36 million shares. Its holdings peaked in the fourth quarter of last year, surpassing 49 million shares. Notably, between April and June this year, BlackRock expanded its position with an additional 4.39 million shares. During Lucid’s 2021 merger with Churchill Capital, BlackRock acquired 7.59 million shares, raising its total to over 12.6 million by the end of that year.
However, concerns over Trump’s re-election prospects have contributed to Lucid’s stock price plummeting, with shares down approximately 52% year-to-date. This decline is primarily linked to reports that Trump’s transition team might eliminate EV tax credits of up to $7,500, a key component of the Inflation Reduction Act (IRA).
Bloomberg analysts have cautioned that “scrapping the subsidies, a key component of the IRA, would deal a significant blow to the already fragile growth of the U.S. electric vehicle market, which is grappling with high prices and insufficient charging infrastructure.”
Despite these challenges, institutional interest in Lucid remains strong. A record 673 institutional investors collectively hold 1.68 billion shares in the company.
Lucid CEO Peter Rawlinson announced last week that production of the Gravity SUV would soon begin at the company’s Casa Grande, Arizona, facility. Orders for the top-tier Gravity trim started last week, with the base model expected to launch by the end of next year.
In a recent interview, Rawlinson commented on the competitive landscape, highlighting substantial subsidies received by Chinese EV manufacturers from their central government. He also criticized the quality of some U.S.-made EVs, stating that many American consumers have been left disappointed with their EV experiences.
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