Did Ford’s EV Failure Trigger Drop in Lucid Stock?

By Douglas A. McIntyre Updated Nov 4, 8:10AM EST · Published Nov 2, 9:11AM EDT

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Did Ford’s EV Failure Trigger Drop in Lucid Stock? — © Justin Sullivan / Getty Images News via Getty Images

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Ford Motor Co. (NYSE: F | F Price Prediction) cutting production of its F-150 Lightning raised questions about electric vehicles in the United States in the short term.
One troubled EV company is Lucid Group Inc. (NASDAQ: LCID).
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Lucid Group Inc. (NASDAQ: LCID) has had plenty of problems. These may have been worsened by Ford Motor Co.’s (NYSE: F) decision to cancel the production of its F-150 Lightning EV for the remainder of the year. Ford’s decision is a signal that the electric vehicle market continues to slip.

The Ford decision is particularly troubling for EV makers. Ford has put billions of dollars behind the launch of an EV model of its most popular product, the F-Series. The F-Series has been the nation’s best-selling vehicle for over four decades, accounting for 35% of Ford’s unit sales in the United States. Ford continues to promote the Lightning regularly. It is on the homepage of the company’s website.

Another sign of Ford’s EV commitment is that it lost over $1 billion in the EV division in the third quarter. Although its EV plans may have slowed, it still plans to be a significant player in the sector.

Ford’s Lightning plans must be particularly troubling for shareholders in the much smaller EV makers. Ford’s shares are down 4% in the last three months. Lucid’s are down 33% over the same period.

Ford has a balance sheet and sales beyond its EV unit to cover EV losses for years if necessary. Lucid recently raised $1.7 billion, which will not carry it financially for over two years. The U.S. EV market may not recover fast, and Lucid has several competitors, including GM, Ford, and Tesla.

Lucid will announce earnings on November 7. Investors do not expect the numbers to improve much from the recent quarters. In the third quarter, Lucid produced 1,805 vehicles and delivered 2,781 vehicles. In its most recent release, the second quarter, it had revenue of $200 million, on which it lost $643 million.

After investing billions into EVs, Ford still has billions of losses, so how can Lucid expect to survive?

About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.