Key Points
Spoiler: You’d be left with very little.
Lucid has a lot of room to grow.
But it faces some major headwinds.
It’s a reasonable question, if you’re interested in electric vehicles and investing in them: How much money would you have today if you’d plunked $10,000 into Lucid Group (NASDAQ: LCID) three years ago? Here’s the answer, plus some information and thoughts on investing in Lucid.
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Let’s answer the question first. Between July 1, 2022 and July 1, 2025, shares of Lucid plunged by 88%. Ouch! So your $10,000 would have turned into $1,194. How does that compare to the overall market, as measured by the S&P 500 index? Well, the S&P 500 gained 67% in that period, averaging an annual gain of 18.7%. (In contrast, Lucid’s annual gain (er, loss) was 50.7%.) The S&P 500’s gain is even bigger if you reinvested dividends from it, but Lucid is not a dividend-paying stock, so there’s no difference in its return.
Why the loss? What’s going on with Lucid? Well, the company is facing multiple challenges, and it’s posting losses instead of gains every year. Here are some issues:
Congress may soon eliminate tax credits for electric vehicles — which would end up costing consumers more and would likely shrink sales.
While sales are expected to surge for Lucid in the years ahead, some worry about whether it will have enough funding to keep churning out and selling vehicles. Its access to further funding is challenged, and if it has to sell more shares, especially at this depressed price, it will dilute the value of existing shares, perhaps considerably.
The stock was recently priced at $2.05 per share, which puts it firmly in penny-stock territory, and penny stocks are notoriously risky.
So — should you invest in Lucid Group? Well, its stock price, which topped $55 per share in 2021, is certainly much lower today, making it more attractively valued. But it remains a risky investment. If all goes well, it could reward shareholders handsomely. But if not, there will be trouble ahead. Perhaps look elsewhere.
Should you invest $1,000 in Lucid Group right now?
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Selena Maranjian has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
