24/7 Wall St. Insights
- Lucid Group Inc. (NASDAQ: LCID) stock has underperformed this year.
- The electric vehicle maker’s prospects don’t look good. Here’s why.
- Also: Dividend legends to hold forever.
Lucid Group Inc. (NASDAQ: LCID), the deeply troubled electric vehicle (EV) maker, has posted disappointing stock performance this year. Shares have fallen below the penny stock level of $5 and are down 22% in 2024, compared to an increase of 21% for the S&P 500. It has been almost exactly a year since it traded above $5.
Lucid’s stock has also performed worse than the largest gasoline-powered car and large EV companies. Ford Motor Co. (NYSE: F) shares are 11% lower in 2024, and Tesla Inc. (NASDAQ: TSLA) stock is down by the same amount.
Lucid’s challenge is that there has been no catalyst to attract shareholders. Its most recent production and delivery figures were poor. For instance, Lucid produced 1,805 vehicles in the third quarter and delivered 2,781. It calls itself the “maker of the world’s most advanced electric vehicles.” However, it has nothing to back that claim.
The hurdles to Lucid’s chance for survival are twofold. The first is that the EV industry in the United States has slowed. According to Cox Automotive, EV sales rose only 8% in the third quarter to 346,309. That was 8.9% of all cars and light trucks sold in the quarter. EVs are not replacing gasoline-powered vehicles at anything close to enough to say the EV segment is successful.
Lucid’s second hurdle is that it finds it hard to argue that it will survive as an independent public company. It will not announce third-quarter earnings until next month. However, they are not expected to be much better than the second-quarter figures. In that quarter, it lost $792 million on $201 million in revenue.
Here Are the Odds Lucid Goes Bankrupt in the Next 5 Years
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