-
Lucid makes a very small amount of cars relative to other automakers.
-
It's hard to ignore that the company loses billions annually.
-
Other key players are competing in the same space.
Regardless of its status as an electric vehicle (EV) player, Lucid Group (NASDAQ: LCID) is still just a car stock, and car stocks do not make investors fortunes. Tesla has been a rare exception, but we're talking about the rarest of the rare.
Competition is one thing keeping EV makers like Lucid from rocketing shareholders to incredible wealth. In addition to Tesla, traditional automakers like General Motors and Ford also make electric vehicles, which, from personal experience, I can say are quite nice. The pure EV players don't have any sort of monopoly on that space of the business, and it seems very unlikely that the more established players within autos are going to let up the pressure.
Lucid's annual sales are definitely growing, increasing from a mere $4 million in 2020 to over $807 million in 2024. The problem is that the business is losing billions annually, which explains why the company's share count continues to climb as it raises capital to cover operations by issuing shares. Total shares outstanding increased nearly 32% year over year in the first quarter of 2025, all while Lucid reported a net loss of $366 million, excluding accretion of redeemable convertible preferred stock, which took losses to $731 million.
To me, the euphoria has worn off this stock, as it is down over 70% in the last five years. This isn't to say that it makes a bad product. Quite the opposite. Car and Driver gives the 2025 Lucid Air a five-star rating. The problem is the cost of building up a car company from scratch and competing against the established giants in the industry that are all making their own electric cars along with internal combustion engine vehicles.
Lucid's car production came in at 9,024 vehicles in 2024, which is minuscule compared to competitors like General Motors, which sold well over 2 million vehicles. Guidance calls for around 20,000 vehicles to be produced in 2025, which is still pretty minuscule relative to the broader car market.
I've been watching auto stocks for a long time, and I don't see the strength of the sector in terms of investment. The exception is, of course, Tesla, but its operations span across more than just cars, and I think its stock will also come back to earth at some point.
