Lucid Group (NASDAQ:LCID) is on the right track towards its more long-term objectives despite recent declines in LCID stock triggered by near-term macro challenges. Sooner or later, this should ultimately lead to a welcome change in direction for investors.

Over recent months, LCID stock has lost a lot of steam. Volatility in electric vehicle (EV) stocks seems to be the order of the day. Even Tesla’s (NASDAQ:TSLA) prices have declined in the past few months. The company is focusing more on its solar business and the market is responding by pricing them out of some sectors.

Of course, the market for EVs is still nascent. The number of EVs on the road is still low. Moreover, many problems need to be solved before the industry can become profitable. It’s currently experiencing some setbacks — there has been a shortage of chips and an overabundance of production issues hampering many companies.

But we should judge Lucid based on its own merits. To that end, the Lucid Air is winning many laurels. The company has 13,000 vehicle reservations so far with about $1.3 billion in orders as of the third quarter.

No doubt, investing in EV plays comes with risks. LCID stock is down 32% for the past one month. However, many stocks can be multi-baggers if you make the right decision at the right time. By most accounts, the stock is an intriguing prospect. Out of all the players operating in the sector, Lucid has the best shot at challenging Tesla’s omnipotence.

LCID Stock: Finally, a Worthy Opponent

Still, investors usually go for one option when investing in EV stocks: Tesla. The automotive industry is undergoing a revolution of sorts and Elon Musk’s company is leading the charge. However, the search for the next Tesla has been happening for a while, too.

Based in China, Nio (NYSE:NIO) is perhaps the most-talked-about alternative. There’s also Rivian (NASDAQ:RIVN) and Fisker (NYSE:FSR), both of which have been getting substantial media coverage. Plus, there are EVs coming soon from established automakers. But of all the EV names today, LCID stock may represent the most interesting Tesla challenger out there.

Lucid Group was founded in 2007. The company is led by CEO Peter Rawlinson, a former top engineer for Tesla. Lucid also introduced its first Lucid Air prototype model in 2016. All in all, the company is following Elon Musk’s lead in aspects like production, technology and services. Lucid is also taking an intriguing approach to EV charging stations, autonomous driving (AD) and more. And, unlike many other EV companies, Lucid plans to produce all of its cars in-house.

How Does Lucid Differ From Tesla?

The Lucid Air vehicle is expected to be a catalyst for the company’s lineup of future cars. For 2023, Lucid Group is moving into electric SUVs as a way to get more vehicles into the market. The company will surely plan an even more diverse lineup of models over time as well.

Of course, Tesla has an advantage in building and operating its own charging network, but the company is also capital-intensive. Lucid is more asset-light, so building a charging network doesn’t make sense. Instead, the company has partnered with Volkswagen (OTCMKTS:VWAGY)-funded Electrify America to provide charging stations on a grand scale.

Tesla and Lucid also differ when it comes to AD. Elon Musk has notoriously called lidar “a fool’s errand.” Alternatively, Tesla cars use a host of cameras and sensors. Lucid, on the other hand, has pledged to incorporate a driver-monitoring system in its cars and use a variety of technologies including lidar.

Finally, LCID stock received some good news recently when the company announced solid results for its battery packs. The company’s cars went far, “delivering at least 100+ miles of additional range over its closest competitor.” With a range of 520 miles, the Lucid Air Dream Edition is the Apple (NASDAQ:AAPL) MacBook Pro of EVs. It’s one of the best on the market.

A Premium EV Stock Available at a Discount

The stock market has been going through a rollercoaster ride in recent months. Like other names in its sector, LCID stock has been struggling since the selloff of EV growth stocks.

However, Lucid Group looks like an excellent company with great management and a great product. It’s still trading at a low valuation. With things heating up on the company’s front, though, it seems like now is the time to invest.

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

Faizan Farooque is a contributing author for InvestorPlace.com and numerous other financial sites. Faizan has several years of experience in analyzing the stock market and was a former data journalist at S&P Global Market Intelligence. His passion is to help the average investor make more informed decisions regarding their portfolio. Faizan does not directly own the securities mentioned above.