Lucid has a team in China exploring the viability of entering the market, though there's no specific timeline yet.

(Image credit: Lucid)

Lucid Motors (NASDAQ: LCID) is exploring selling cars in China, where the US electric vehicle (EV) startup previously hired an industry veteran to prepare for the endeavor.

"Every car manufacturer has to look very deeply or has already looked into China. It's the world's largest car market. It's going to be likely the world's largest and fastest adopting EV market as we can see," Lucid chief engineer Eric Bach said in an interview with CNBC on Tuesday at the IAA Munich auto show in Germany.

"It's something we are exploring, we are investing in," Bach said.

If Lucid does expand into China, the US company would be entering one of the world's most competitive EV markets, the CNBC report noted, adding that Lucid would be competing with a host of car companies such as (OTCMKTS: BYDDY), (NYSE: NIO), and US giant (NASDAQ: TSLA).

"We haven't cited a market entry date yet because we just need to get it right," Bach said, adding, "If you enter China on the wrong terms, you can make a lot of mistakes."

Bach said Lucid has a team in China exploring the viability of entering the market.

"We need to hone in, how are we going to enter? What's the pricing strategy? What's going to be our manufacturing strategy?" He said.

"So we're looking at the whole gamut of what we should be doing as a young manufacturer, and we'll get it right."

Lucid was co-founded in 2007 by Bernard Tse, former vice president and director of Tesla, and Sam Weng, a former Oracle executive. In December 2016, Lucid's first production EV, the Lucid Air, was launched.

In July 2021, Lucid went public on the Nasdaq through a merger with a special purpose acquisition company (SPAC) and has a current market capitalization of $14 billion.

On June 7, Chinese media outlet Jiemian reported that Zhu Jiang, a former executive at Nio, Ford (NYSE: F), and Baidu's (NASDAQ: BIDU) car-making unit Jidu Auto, has joined Lucid to head up its China operations.

Lucid is just starting to prepare for its entry into China, Zhu told Jiemian.

China is the world's largest auto market, with annual sales of around 20 million vehicles over the past few years. The country has also become the world's largest market for new energy vehicles (NEVs), which are contributing more than 30 percent of monthly car sales.

In the January-August period, China's retail sales of passenger cars totaled 13.199 million units, up 2 percent year-on-year, according to preliminary data released yesterday by the China Passenger Car Association (CPCA).

From January to August, retail sales of passenger NEVs in China were 4,424,000 units, up 36 percent year-on-year, contributing 33.52 percent of all vehicle sales.

China's open and competitive market is a very important basis for the rapid increase in NEV penetration, William Li, founder, chairman and CEO of Nio, said yesterday in a speech at the World NEVs Congress in Munich.

Nio CEO credits rapid EV adoption in China to open market and competition