Lucid Shares Drop 80%

By Douglas A. McIntyre Published Aug 25, 9:15AM EDT

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Lucid Group Inc. (NASDAQ: LCID) stock is down 80% over the past five years.
The EV maker cannot overcome its problems of too much competition and cars that are too expensive.

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Lucid Shares Drop 80% — © Victoria Gnatiuk / iStock via Getty Images

Electric vehicle (EV) maker Lucid Group Inc. (NASDAQ: LCID | LCID Price Prediction) will have a 1-for-10 reverse stock split, which will take shares from just above $2 to just above $20. The move does not change its market cap. In fact, Barron’s reports, “Traders sometimes see reverse stock splits as a sign that a share price will fall further, just as they see traditional stock splits as a source of upside.” Lucid management has to hope that is not correct. Its stock is down 80% over the past five years, while the S&P 500 is up by over 90%.

Lucid has lost billions of dollars in a quest to take a large share of the U.S. EV market. The effort has been a dismal failure, as shown by its poor unit sales, weak balance sheet, and negative profit and loss statement.

In the second quarter of the year, Lucid produced just 3,863 vehicles, a tiny number, and delivered only 3,309. It reduced production estimates for the year from 20,000 to a range of 18,000 to 20,000.

In the second quarter, Lucid had a net loss of $855 million on revenue of $259 million. That compares to a loss of $790 million in the same quarter last year, on revenue of $201 million.

Lucid has at least two problems it cannot overcome. First is that its most inexpensive product is the Lucid Pure at $69,600. The Lucid Air Grand Touring has a base price of $114,900. High prices have hampered EV sales in the United States. Most companies that want to win the U.S. EV race are pushing for a $25,000 product.

Lucid’s second problem is that Tesla still has just shy of 50% of U.S. EV sales. Almost every legacy car company is pushing into the market. In terms of sales, the most successful among these are GM, Ford, and Hyundai, each of which has a market share of 10%. Both German and Japanese companies have products as well. The U.S. market has become more crowded almost every month.

There is one wildcard that also works against Lucid’s success. Most experts in the car industry say that Chinese manufacturers make the best EVs and that the price point for these is low. If they can ever overcome U.S. tariffs, the EV market will become a slugfest in which American companies are at a disadvantage.

Lucid Stock Price Prediction and Forecast 2025-2030

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.