Key Points
Lucid is attempting to build an electric car business from the ground up.
The company remains a money-losing start-up that is little more than a rounding error compared to its larger peers.
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Shares of Lucid Group (NASDAQ: LCID) are trading at a touch below $10. That’s an interesting level because the stock underwent a 1-for-10 reverse split in late August 2025. If that reverse split hadn’t been implemented, Lucid would be a penny stock right now. Investors looking at this electric vehicle start-up should probably tread with caution.
The problems Lucid Group is facing
Lucid Group’s share price has declined roughly 50% since the reverse stock split. To be fair, it isn’t uncommon for stocks to fall following a reverse stock split. However, that’s still a material decline in roughly six months. Wall Street is clearly very concerned about the company’s long-term prospects.
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There are good reasons for that. For example, the company has been bleeding red ink for years. Again, that’s not surprising, given the huge capital investments required to build a car manufacturing business from the ground up. While Lucid is trying to exploit the emerging market for all-electric vehicles to break into the automotive sector, it is a huge undertaking, and many competitors have already failed in the effort.
The company’s fourth-quarter 2025 production rose dramatically, and its revenue was materially higher year over year, which is good. But it still fell short of analyst expectations, and on an absolute basis, it is bleeding red ink at a troubling rate. Even taking out one-time items, Lucid lost $3.08 in the quarter. For the full year, the company lost just over $12 per share.
Lucid remains a tiny competitor
Lucid has award-winning cars and attractive battery technology, and it is ramping up production very quickly. However, even if it achieves its goal of producing 27,000 EVs in 2026, its production is little more than a rounding error compared to its larger EV peers. For example, automotive giant Tesla (NASDAQ: TSLA) produced 1.65 million vehicles in 2025.
Basically, Lucid is a money-losing upstart that’s still way behind its most successful EV peers. While it has $4.6 billion in liquidity, that may not be enough to turn this still-developing carmaker into a sustainably profitable business.
Only the most aggressive investors should be looking at Lucid. Given the company’s modest scale, the question isn’t how high the stock could rise if it succeeds, but how low it could fall if it fails. The answer to that question is, worryingly, zero if the company finds itself in bankruptcy court, as fellow EV upstarts Nikola, Canoo, and Fisker have
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Reuben Gregg Brewer has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Tesla. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
