The corporate’s flagship electrical automobile is setting information.
Is there a brand new clubhouse chief within the electrical automobile business?
Lucid Group (LCID -1.09%) not too long ago made a powerful headline. Its flagship automobile, a premium all-electric sedan referred to as the Lucid Air, set a brand new world report for the longest journey by an electrical automobile on a single cost. The Grand Touring mannequin of the Air traveled a whopping 1,205 kilometers, or roughly 749 miles. It is a powerful feat, to say the least.
However is it sufficient to show the inventory round? Shares of Lucid Group have been a horrendous funding, dropping over 95% from their peak in 2021.
Here’s what lies forward for Lucid Group, and what that would imply for the inventory a yr from now.
Picture supply: Getty Photos.
Lucid’s expertise could also be superior, however the firm’s funds should not
The tough factor concerning the electrical automobile enterprise is that having product is a must have, but it surely would not resolve all your issues.
It is pricey to put the groundwork for a profitable automotive enterprise, and it’s essential promote quite a lot of autos earlier than you possibly can manufacture them profitably. Tesla could have opened the door to alternatives for the remainder of the electrical automobile business, however firms should nonetheless get off the bottom and construct up to some extent the place the enterprise can maintain itself.
Lucid Group reported spectacular development for the second quarter of 2025, delivering 38% extra autos than it did the prior yr. Sadly, that development is from a small quantity. Lucid has delivered simply 6,418 autos over the primary half of 2025. Because of this, the corporate operates at vital losses:
LCID Income (TTM) information by YCharts
The excellent news for the enterprise is that Lucid has partnered with some deep-pocketed allies. Saudi Arabia’s Public Funding Fund is the corporate’s largest shareholder, and Lucid has established operations within the nation. That possible means monetary stability for so long as the corporate has that help. The flip facet, and the unhealthy information for different buyers, is that Lucid Group’s share rely has elevated by practically 80% over the previous three years. The aggressive share dilution has contributed to the inventory’s depressing efficiency.
But, the inventory instructions a premium over most of its friends
Regardless of the inventory’s steep decline, its valuation is not all that appetizing. Lucid Group’s enterprise worth is presently 6.3 occasions its trailing-12-month gross sales. That is greater than virtually each certainly one of Lucid Group’s friends or direct opponents:
TSLA EV to Revenues information by YCharts
Tesla might not be a completely appropriate comparability, given the corporate’s measurement, market share, and involvement in further companies, together with vitality storage, autonomous automobile expertise, and humanoid robotics. Positive, Lucid Group is rising sooner than legacy automotive producers, but it surely’s additionally a lot smaller and deeply unprofitable.
Rivian Automotive is probably going the closest comparability, and Lucid Group’s valuation is greater than double Rivian’s. Each firms are presently deeply unprofitable and are working towards bringing new, extra reasonably priced fashions to market in hopes of reaching the gross sales quantity that may maintain them financially.
So, the place will Lucid Group be buying and selling in a single yr?
That playbook labored for Tesla. At present, Tesla’s extra reasonably priced Mannequin 3 and Mannequin Y account for almost all of its gross sales. Lucid Group is growing a mid-sized SUV referred to as the Lucid Earth, and it could be the smash hit that solidifies Lucid’s enterprise, very like the Mannequin 3 did for Tesla. However with the Lucid Earth unlikely to reach earlier than late subsequent yr or 2027, buyers will not discover that out throughout the subsequent yr.
I think that Lucid Group could battle to maintain sufficient development to help the inventory’s present valuation, particularly now that the federal electrical automobile tax credit score will finish on the finish of September. The inventory’s valuation might simply retreat decrease, nearer to that of Rivian and different automotive firms, except some sudden and dramatic optimistic developments happen.
It is solely a prediction, however given Lucid’s short-term circumstances and steep price ticket, it appears possible that Lucid Group will commerce at a lower cost in a single yr than it’s now.
Justin Pope has no place in any of the shares talked about. The Motley Idiot has positions in and recommends Tesla. The Motley Idiot recommends Common Motors and Volkswagen Ag. The Motley Idiot has a disclosure coverage.
