Lucid Group (NASDAQ:LCID) shares rocketed by more than 17% last Friday, Nov. 19. For any stock, that kind of movement is newsworthy. For LCID stock, this wasn’t even its best performance of the week.

On Tuesday, Nov. 16, LCID stock popped nearly 24%. As excitement grows over its Lucid Air luxury electric vehicle (EV), shares in the company — a firm founded by a former Tesla (NASDAQ:TSLA) engineer — have more than doubled in value. Its market capitalization is now close to $90 billion, giving it a higher valuation than some of the biggest automakers.

So, should you get in on the action with Lucid, anticipating that it will follow the trajectory of Tesla? Or is it possible that, once the excitement is over, the lead-up to the Lucid Air launch will die down and the stock will come back down to Earth?

The one thing that is certain is that this Portfolio Grader “B” rated stock is having a moment in the spotlight. Let’s try to figure out what happened last week — and whether the strength in LCID stock can last.

What Caused the Friday LCID Stock Pop

Last Thursday, LCID stock closed at $47.05, a roughly 10% loss on the day. However, on Friday, shares made that up and then some. The stock closed at $55.21 for a one-day gain of 17.3%.

You can thank Wedbush analyst Daniel Ives for that. The analyst had actually been talking up Tesla last week, reiterating a buy rating. But as part of his analysis, Ives also did the math for the accelerated adoption of EVs in the U.S. as well as the already booming adoption of EVs in China.

Ives came up with a staggering $5 trillion addressable market for EVs over the next decade. The analyst thinks that Tesla could grab up to half of that. However, that leaves “at least $2.5 trillion for Lucid […] and other automakers.”

The market reaction to that assessment was felt immediately. Multiple electric vehicle stocks surged — and LCID stock was one of them. After all, as I recently wrote, “The reality is that everyone wants to buy into ‘next Tesla’ before it accelerates.”

Why Lucid Surged Last Tuesday

So, last Friday’s pop in LCID stock was largely because an analyst stunned investors with the sheer size of the EV market. That added some perspective to Lucid’s long-term sales potential. But what was behind the even bigger surge last Tuesday?

It certainly wasn’t the company’s third-quarter earnings. As InvestorPlace contributor Josh Enomoto recently reported, Lucid booked a loss of 43 cents per share. That was much worse than the 25 cent loss Wall Street had expected. Yet, instead of punishing LCID stock, the market had the opposite reaction. Lucid climbed nearly 24% on the day.

What gives? That optimism was buoyed by reservations for the Lucid Air. The company’s first EV is now in production and getting rave reviews. Lucid says its reservation list grew by over 13,000 units during the quarter. It now stands at over 17,000 units.

Given the Lucid Air production target of 20,000 units for 2022, the strong demand for this luxury EV bodes well for the company meeting its goals.

The Bottom Line on LCID Stock

That’s the story of last week. So, what happens next? Is Lucid on a Tesla-like growth path right now?

Lucid has a long way to go before it’s anything on the scale of Tesla. At the moment, it has only one vehicle. Additionally, the Lucid Air is a luxury sedan in a market where SUVs are king. Finally, Lucid is entering into a challenging growth phase where it has to scale up production to commercial levels — and has to do so at a time when supply-chain issues like chip shortages are rocking the automotive industry. At least one analyst warned last week about the resulting risk to LCID stock going forward.

On the other hand, though, the Wedbush analysis shows the sheer size of the global EV market. Even if Lucid never progresses to a stage of openly rivalling Tesla for the mass-market crown, there is still a huge growth opportunity here. Plus, the fact that Lucid actually has vehicles in production and in customer driveways is a big milestone.

All told, investors may never see LCID stock at TSLA levels. However, the potential for long-term growth here is strong if the company can successfully navigate its production ramp-up.

— Louis Navellier and the InvestorPlace Research Staff

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Source: Investor Place