Beleaguered electric vehicle company Lucid Motors (LCID) has implemented a reverse stock split, consolidating shares to meet NASDAQ’s $1 minimum trading price and prevent delisting.
As of Friday, Lucid’s share price was down over 96% from its all-time high of $64.86, reached in February 2021.
While this move may protect the company from being removed from the exchange for now, it does little to address the underlying issues plaguing the struggling electric vehicle maker.
Founded in 2014 by former Tesla (TSLA) engineer Peter Rawlinson, Lucid initially aimed to compete in the luxury EV segment with its flagship Air sedan, positioned as a premium rival to Tesla’s Model S.
It had ambitious production targets, initially aiming for 20,000 vehicles in 2022, then 49,000 in 2023, and 90,000 in 2024. But the company struggled to meet demand and in 2024, Lucid delivered just over 10,200 vehicles.
The company’s financials highlight the scale of its challenges, with revenue rising 36% to $808 million in 2024 but net losses widening to $3.1 billion. That is a loss of around $299,000 per vehicle sold.
Lucid has been trying to stay in the game
Multiple price cuts for the Air sedan from around $80,000 to roughly $71,400 reflect ongoing efforts to stay competitive, but the company has limited room for price increases due to high manufacturing costs.
Despite having ample liquidity of about $4.8 billion and expanding manufacturing facilities in Arizona and Saudi Arabia, Lucid’s growth prospects remain uncertain. The company faces stiff competition from Tesla and other automakers, and its delayed launch of the more affordable Gravity SUV, a potential game-changer, has yet to materialize.
Analysts forecast modest near-term growth, with 2025 revenue expected to reach $1.3 billion, with a 61% increase, and losses projected to decline slightly.
However, even optimistic forecasts place Lucid’s market cap at just $6.4 billion, roughly five times its expected 2025 sales. In contrast, Tesla’s valuation remains over $1 trillion, with a price-to-sales ratio of around 12.
If Lucid can deliver on its growth plans, the stock has the potential to double or triple, if it achieves a valuation comparable to Tesla’s. For now, the reverse stock split provides a temporary reprieve, but investors should think about it carefully given the company’s volatile financials and stiff competition.
Will Lucid have a market for long?
Lucid Motors’ stock had a rough week, reflecting broader investor concerns about the future demand for electric vehicles (EVs) and overall market sentiment. The luxury EV maker’s shares fell sharply after analysts highlighted ongoing challenges in the industry, including increased competition, rising production costs, and moderating consumer interest.
Despite earlier excitement around Lucid’s technological innovations and plans to expand its luxury lineup, recent earnings reports and market data suggest that the company may be facing a more challenging environment than previously anticipated.
Persistent supply chain disruptions, combined with skepticism over EV adoption rates, are weighing on investor confidence.
For investors, Lucid’s recent decline, which has now reversed nearly all of its recent gains, signals heightened caution among shareholders in a fluctuating EV sector.
As automakers compete fiercely for market share, especially in the premium segment, Lucid’s future profitability remains under close scrutiny.
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