The road for the electric vehicle (EV) firms has been full of potholes over the past few years. Shares of Lucid Group (NASDAQ:LCID) have gone bust in a big way, now down more than 94% from its all-time high that saw the stock command a price just north of $55 per share. Indeed, it’s been a long, painful implosion for the stock, which now trades at just $3 and change.
Key Points
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Lucid stock has been gaining traction of late, but the stakes are as high as ever as its Gravity SUV hits the market.
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Lucid needs to get production right if it’s to have a shot at outgrowing its rivals in the next four years.
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Though bottom-fishing for the shares of bruised innovators will always be incredibly risky, some big names on Wall Street have hope for 2025. Given low expectations and an expanded product lineup, perhaps Lucid stock has enough catalysts to add to the newfound momentum that began in December (LCID shares have gained close to 60% from its December lows).
Notably, the Lucid Air Pure, Air Grand Touring, and Gravity SUV are worth watching very closely as the firm looks to do its part in evening the playing field for EV firms looking to go after the crown of Elon Musk’s Tesla (NASDAQ:TSLA).
Lucid stock has been on the mend in the past month.
For the fourth quarter, Lucid clocked in record quarterly vehicle deliveries. Moving ahead, there are reasons to believe the EV maker can “share take” its way to gains in a year where EV sales could enjoy a bit of a bounce back after a slog of a year. Most notably, the new Gravity SUV holds a lot of potential. Management sees the latest offering as helping drive a “significant increase” in sales volumes in the new year. Undoubtedly, there’s a lot on the line with the Gravity SUV.
It’s not a cheap offering, with the Gravity Grand Touring model going for just shy of $95,000. Looking underneath the hood of the new offering (being able to go 450 miles per charge could be a game-changer), I’d say it has what it takes to stay competitive with the likes of a Tesla Model X in the SUV scene.
The big question, however, is whether Lucid can make the right landing. Indeed, things can always be tricky when nudging a brand-new product on the open market. Indeed, the Tesla Cybertruck had a pretty rocky launch when it stormed out of the gate.
The Gravity SUV launch needs to go smoothly.
A number of quality control issues (from misaligned fender flares to “stuck” pedals and even creaking consoles) have taken all the buzz away from the much-anticipated Cybertruck. Some headlines have referred to the woes as a “production nightmare.”
For the Cybertruck owners hit with recalls, their loyalty will surely be put to the test. In any case, the numerous setbacks for Cybertruck don’t appear to have taken too much of a dent in TSLA stock, which blasted off to hit new all-time highs in the back half of 2024.
It’s mostly about Cybercab now, with promises for a self-driving future that could be accelerated under the Trump administration in 2025. And while Lucid doesn’t have a similar autonomous vehicle product to help it out of its current funk, I still think it can gain ground with its DreamDrive advanced driver-assistance system (ADAS). In the meantime, though, there’s a lot on the line with the Gravity SUV.
Arguably, LCID stock has already succumbed to the forces of gravity, shedding most of its value in a couple of years. If Lucid can scale production in a smooth manner while steering clear of quality and service issues, perhaps there’s an opportunity for the fallen EV maker to pick itself off the canvas and take a bit of market share away from the Model X or maybe even the Cybertruck.
Where will Lucid be in four years?
It’s tough to tell where Lucid will be in four years. If it can nail the landing with its latest models in 2025, it may be able to build brand affinity to set the stage for a more upbeat next couple of years.
Also, further refinements to its Air and Gravity models, as well as advancement of DreamDrive tech, will be a must if Lucid is to keep up stride-for-stride with Tesla and other EV rivals. It will be interesting in the next four years. The stakes will surely be higher, making LCID stock a high-risk, high-reward type of play that I wouldn’t bet the farm on, especially given all the uncertainties ahead.
The bottom line
The stakes are high for Lucid in 2025, and there’s really no room for error. Its new product launches not only need to garner decent demand, but the company needs to ramp up production to ensure sufficient quality, all while keeping quarterly losses in check. It’s a tough balancing act, but one that could entail considerable upside if achieved. Personally, I think Lucid has a puncher’s chance at gaining ground in four years. It has a very good-looking slate of vehicles with a lot of tech packed in. The firm just needs to deliver.
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