Lucid Group Is a Wreck

Electric vehicle (EV) maker Lucid Group Inc. (NASDAQ: LCID | LCID Price Prediction) took one more step toward oblivion. It only sold 679 vehicles in the second quarter, which drove a tiny $97.3 million in revenue. The company lost $559 million. It has only $4.6 billion in cash, cash equivalents and securities. Lucid said that will fund it into next year. What happens then is speculation, but based on the losses, the cash balance is low.
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Lucid has posted optimistic sales forecasts for this year, but sales continue to fall. It will produce only 6,000 to 7,000 units this year, according to its latest guidance. The company seems to think that the fact it has back orders of 37,000 vehicles today matters. If production continues to be delayed, many potential customers will turn elsewhere.
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Lucid CEO Peter Rawlinson appropriately blamed supply chain problems for the company’s dire situation. He added that he believes these problems can be overcome. With Lucid’s current balance sheet, that speculation easily could be wrong.

Lucid has another, bigger problem. Other EV companies have products in the market today. As each month passes, the number of Lucid competitors grows. Every customer who might buy a Lucid Air can turn to a vehicle that another manufacturer has available, or will very soon.
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Lucid’s stock dropped over 10% on the news to below $18 a share. Its low price for the past 52 months is $13.25, against a high of $57.75. With a market capitalization of a bloated $34 billion, the shares have much further to fall.
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Investors need to realize that Lucid has no future. Like dozens of car brands across the history of American vehicle manufacturers, it will soon be gone, but perhaps not forgotten.