Lucid Motors (NASDAQ:LCID) stock soared in September adding 27% on the back of multiple positive developments in the month.

Moreover, it has been getting a lot of encouraging press, especially after attaining its ground-breaking EPA rating last month.

With surging reservations and Lucid Air at the helm of the EV class, LCID stock has immense long-term potential.

Lucid investors are breathing a sigh of relief that the company is finally moving from a development stage company to an actual EV production company.

Moreover, it will be easier to value the firm as its production capacity is clearer. However, with a healthy run-up in value its market capitalization now exceeds over $40 billion.

This means that it has its work cut out in living up to its lofty valuation, but so far, it has proven its naysayers wrong and pushed ahead with considerable aplomb.

September Developments

It was a September to remember for Lucid stockholders as the company accomplished multiple milestones during the month.

Firstly, it announced a cashless redemption of its warrants. Not only did it showcase the strength of its balance sheet, but it also showed how confident its management is about the company’s future. Additionally, it limited dilution to existing shareholders.

Secondly, the U.S. Environmental Protection Agency gave Lucid a dumfounding 520-mile battery range rating. No other electric car comes nearly as close to Lucid Air Dream’s EPA rating. This includes Tesla’s (NASDAQ:TSLA) Model S Range which boasts a 412-mile range.

Lucid has already made its mark in the market with a record rating even before its commercial launch.

Furthermore, Lucid has begun production of its Air Dream Edition luxury sedan. The publicity surrounding its vehicle and record travel range will strengthen demand and reservations.

Lucid Air reservations have risen from 9,000 back in May to 13,000 in September. Once the company starts delivering its vehicles, the word-of-mouth reviews will likely help propel demand to new heights.

Lucid’s CEO Peter Rawlinson asserted the company’s goal to deliver at least 20,000 Lucid Air sedans by the conclusion of 2022. These targets will set the tone for Lucid to hit its longer-term goals.

Lucid has a Positive Outlook

Transitioning into the manufacturing stage initiates the de-risking process for most EV startups such as Lucid. It has been successful in attracting a lot of reservations and has done so without aggressively marketing.

Moreover, the EPA rating adds significantly to the EV maker’s credibility.

However, Lucid has no significant manufacturing experience, and its competition may catch up sooner or later. Tesla is not offering any luxury sedan models but will probably be Lucid’s main competition.

In the short term, Lucid Air’s reservation count could exceed 20,000, resulting in revenues over $1.50 billion. In the long run, the firm may grow into its manufacturing capacity of 53,000 cars.

However, the EV maker will have to add to its manufacturing prowess to respond to the rising demand for its products. It may take a few years before it can sort out its supply-side issues, but once Lucid Air becomes successful, it could be looking at a minimum of $4 billion in sales by 2025.

Bottom Line on LCID Stock

LCID stock has had a healthy run-up during September, after a string of positive developments.

Production has finally begun for Lucid Air, and its record EPA rating is sure to attract new reservations in the coming months.

As it stands, it has the edge over its competition in the luxury EV segment, but it needs to deliver on its goals to keep its stockholders invested in the product. For now, LCID stock is a fascinating EV play with plenty of upside.

On the date of publication, Muslim Farooque did not have (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

Muslim Farooque is a keen investor and an optimist at heart. A life-long gamer and tech enthusiast, he has a particular affinity for analyzing technology stocks. Muslim holds a bachelor’s of science degree in applied accounting from Oxford Brookes University.