Churchill Capital Corp IV (NYSE:CCIV) possibly marked the peak of the frenzy surrounding special purpose acquisition companies (SPACs) this past year. However, CCIV stock has recently remained depressed after its significant fall from an all-time high of $64.86 in February.

To me, this does not come as a surprise. At just under $23 today, the Lucid Motors SPAC is already trading at an excessive valuation (post business-combination completion). Yet, the company still hasn’t delivered its first electric vehicle (EV) to consumers.

Without a doubt, there will be winners from the electric vehicle space in the next decade. However, investors need to be increasingly selective as the EV space gets overcrowded. According to Credit Suisse research, “Tesla’s market share in the global electric vehicle market declined to 11% in April, down from 29% in March.” The reason for Tesla’s (NASDAQ:TSLA) decline? Competition from pure-play EV companies as well as from traditional automakers.

CCIV Stock: Big Plans Amidst the Competitive Headwind

Lucid Motors is coming to the table with big ambitions. However, the company seems to be overestimating its growth trajectory. Lucid was said to expect delivery of 20,000 vehicles in 2022. Moreover, in its May investor presentation, vehicle delivery was guided to increase to 90,000 by 2024 and to 251,000 by 2026 (Page 64). But as vehicle deliveries begin, the markets might be disappointed.

That said, one possibly interesting development might be Lucid Motors’ idea to work towards a $25,000 car. The company believes that “cooperating with another company could lead to making a $25,000 car in the next three to four years.” Lucid plans to be a technology partner in any such development.

It’s also worth noting that Lucid is interested in developing pick-up trucks and commercial vehicles. But again, that’s several years away — and the commercial EV space is also becoming more and more competitive.

In fact, talking further on competition, Xpeng (NYSE:XPEV) and Nio (NYSE:NIO) already have big plans for the European markets. Additionally, it’s very likely that Chinese EV companies will pursue U.S. expansion in the near future.

Xpeng and Nio are also heavily investing in research and development. In April 2021, Xpeng unveiled the world’s first mass-produced vehicle with lidar in its P5 sedan. Plus, even Nio is investing in autonomous driving (AD) technology, ramping up its R&D.

With all of this in mind, it will surely be challenging for Lucid to boost market share. Several quality players are already making inroads in key geographies. Meanwhile, Lucid seems to be a few years behind.

For example, Lucid Motors aims to launch a Tesla vehicle rival in 2024 or 2025. In comparison, Nio’s competitive ET7 will be available for deliveries in 2022. Similarly, Xpeng has already launched the aforementioned P5 sedan, which has self-driving features that go head-to-head with Elon Musk’s Model 3.

Clearly, Lucid will face competition headwinds. This has big negative implications for CCIV stock.

Final Take on CCIV Stock

Lastly, though, I want to revisit that expected 251,000 vehicles by 2026. For the same year, Lucid Motors expects total revenue of $22.75 billion. This would imply revenue of about $90,600 per vehicle sold.

This seems to be on the higher side, considering the fact that Lucid Motors plans to produce mass-market vehicles in the coming years. Therefore, I would take these figures — along with the company’s projection of $1.5 billion in free cash flow by 2026 — with a pinch of salt.

Of course, I should emphasize that my view is not that Lucid Motors is bound to fail. I do think the company’s technology and brand-pull will attract consumers. However, I also believe its growth will be slower than anticipated.

Therefore, it makes sense to wait-and-watch when it comes to CCIV stock. If I had to consider exposure to the electric vehicle segment right now, I would look at TSLA stock instead. Further, among the Chinese EV players, Xpeng seems to have a technological edge.

Overall, CCIV stock might remain sideways or go lower in the foreseeable future. Once there is further insight on the market response to the vehicles, however, some exposure could be considered.

On the date of publication, Faisal Humayun did not have (either directly or indirectly) any positions in any of the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Faisal Humayun is a senior research analyst with 12 years of industry experience in the field of credit research, equity research and financial modelling. Faisal has authored over 1,500 stock specific articles with focus on the technology, energy and commodities sector.