Tesla's 22% Share Surge Does Nothing for EV Maker Lucid

Investing

Published: October 25, 2024 7:10 am

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A strong quarter lifted Tesla Inc. (NASDAQ: TSLA) stock but not Lucid Group Inc. (NASDAQ: LCID) shares.
It is hard for investors to see that things will get better for Lucid.
Also: Dividend legends to hold forever.

As Tesla Inc. (NASDAQ: TSLA) posted a breakout quarter that drove its stock 22% higher, smaller rival Lucid Group Inc. (NASDAQ: LCID) did not benefit from an indicator that the electric vehicle (EV) business may be growing healthy again. Its shares rose only 0.4%, which shows how little investors think of it on a day when Tesla’s shares gained the most on a percentage basis since 2013.

Tesla’s revenue for the third quarter rose 8% year over year to $25.2 billion. Per-share earnings rose 9% to $0.72. Also, Tesla vehicle deliveries rose 6% to 468,890.

The primary driver of the rise in its share price was CEO Elon Musk’s comments. He predicted a 20% growth in vehicle sales in 2025 and hinted at lower-cost vehicles and major advances in self-driving cars. He also forecasted that Tesla’s new Cybercab would eventually have sales of 2 million units a year.

Lucid shares did not rise on the Tesla news because, even if Musk signaled a sharp rise in sales, Lucid is too small to participate in a manner that would make it profitable.

Lucid produced only 1,805 vehicles in the third quarter and delivered 2,781. That is such a modest number that it is hard to see how Lucid will make money. Its stock has dropped 81% in the past two years, while the S&P 500 has been 56% higher. Its massive financial losses are the reason. In its most recently reported quarter, it had revenue of $200 million and a loss of $792 million. It is hard to make the case that it will get better.

Lucid is an example that good news in its industry is not enough to change the market’s mind about its future.

Here Are the Odds Lucid Goes Bankrupt in the Next 5 Years

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