Key Points
Lucid (NASDAQ: LCID) was once a very hot stock, trading at over $500 per share on a split-adjusted basis. Today, however, the stock can be bought for less than $10 a share. While the all-time highs were driven by overexuberant investors enamored of anything related to electric vehicles, are the current lows an opportunity?
Lucid makes a nice car, but that isn’t enough
Lucid’s vehicles are very nice, and the company has desirable battery technology. However, that’s not enough to differentiate the business in the highly competitive automotive sector. At this point, every major car manufacturer offers an EV option, and several large EV makers have achieved scale production. Notably, the leading EV makers are also profitable, which Lucid is not.
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That’s the first big knock against Lucid as a long-term investment, even at the current low stock price. It has yet to prove that it can be a sustainably profitable business. Only the most aggressive growth investors should even consider it. But this fact ties into the company’s scale, because the big goal right now is ramping up production. That effort has not been going particularly well.
Size matters in the auto sector
Manufacturing cars requires doing so at scale. In 2025, Lucid produced just 18,378 vehicles. To be fair, that was up more than 100% over 2024’s production rate. However, Lucid’s production would be little more than a rounding error for a company like Tesla (NASDAQ: TSLA), which produced 1.65 million EVs in 2025. Simply put, Lucid has a long way to go before it is a significant competitor in the EV market.
It also has significant spending needs as it continues to expand its manufacturing capabilities. It ended 2025 with around $1.6 billion in cash, which sounds like a lot, but really isn’t when you consider the capital spending likely needed to materially increase production. In 2025, the company spent $1.2 billion on research and development aone. Meanwhile, the company fell short of its production goals in the first quarter of 2026 because of supply chain issues. Those same issues even led the company to halt sales for a period. This isn’t the first time the company has fallen short of its production goals.
Most investors should steer clear of Lucid
To be fair, Lucid has achieved a lot in a short period of time. But it is still a money-losing start-up in a highly competitive industry, struggling to scale its business. For most investors, that’s just not an attractive investment choice.
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Reuben Gregg Brewer has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Tesla. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
