Lucid Takes a Beating

"Last year was not a good one to be an electric vehicle (EV) company in the United States. The EV maker that took the worst of it was Lucid Group Inc. ( NASDAQ: LCID). Ford took a $19.5 billion write-off on its EV business. Tesla's November sales were among their worst monthly numbers in four years. The entire industry took a hit when the Trump administration killed the $7,500 EV tax credit. The theory emerged that early adopters of EVs were the only adopters, at least for several years."

"Its cars are too expensive. The base price for its Lucid Pure is $71,000. That price can rise as high as $250,000, which is an absurd price for almost any car short of a Rolls Royce. The Lucid Touring has a base price of $80,000, which rises to $95,000 for a higher-end model."

"The primary argument for the decline in Lucid's stock is that it is barely a car company at all. It delivered only 4,078 vehicles in the third quarter. It lost over $1 billion on revenue of $337 million. A back-of-an-envelope calculation shows that its unit sales would need to rise six times to break even, if it can hold costs in check."

The EV sector suffered a poor year, with Lucid Group hit hardest. Major industry setbacks included a $7,500 federal tax-credit removal, Ford's $19.5 billion EV write-off, and weak Tesla sales. Lucid's stock fell about 65% while the S&P 500 rose. Lucid sells expensive models (base prices from $71,000 to $80,000, optional pricing far higher) and produced only 4,078 vehicles in Q3. The company reported losses exceeding $1 billion on $337 million revenue, implying unit sales must increase roughly sixfold to reach breakeven. Morgan Stanley downgraded Lucid and cut its price target to $10, pressuring the share price.

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