By many definitions, a penny stock trades below $5. If so, Lucid (NASDAQ: LCID) has inhabited that area for a long time. Today, its price is $2.50, and it has dropped 16% this year. It has financial and unit sales problems. However, its real difficulty is the state of the EV market, which has become crowded and has some well-funded players.
Key Points
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Lucid Is Too Small
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Big EV Companies Have Money
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EV Business In US Is Tough
EV sales have been strong in China, mediocre in the US, and poor in Europe. Lucid can’t expect to play in China because it does not have the capital. Even if it did, that market is crowded by local and successful manufacturers led by BYD. Several Western nations are trying to hold on there. Tesla continues to sell well, but its market share is shrinking.
Tesla Still The Leader
The US market continues to be dominated by Tesla (NASDAQ: TSLA), which had a slightly less than 50% share in the first quarter. Sitting behind it, with shares of less than 10%, are General Motors (NYSE: GM), Ford (NYSE: F), and Hyundai/Kia. The big legacy car companies have failed to do well in the EV sector, but they have money to keep trying.)
Lucid has had plenty of bad news recently. CEO Peter Rawlinson was kicked out, and Lucid has not found a replacement. It barely sells cars. In the fourth quarter of last year, it produced only 3,386 vehicles.
Quarterly Numbers
Revenue was only $235 million in the fourth quarter of 2024, and it lost $651 million. There is no reason to think this will improve.
Lucid also sells expensive EVs in a market where experts believe people want a $25,000 car. Lucid’s cheapest is $70,000, and its models range up to $100,000 per vehicle.
Of the 15 analysts who cover Lucid, 12 rank it as “underperform,” “sell,” or “neutral.” The average target price is about where the stock currently sells.
Lucid has no place to go other than into oblivion.
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