Key Points
The electric vehicle maker’s sales growth is about to take off.
But Lucid’s biggest opportunity may not be making EVs at all.
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If you want to add significant upside potential to your portfolio, check out electric car stocks. In 2021, electric vehicles (EVs) represented just 3.4% of all vehicle sales in the U.S. By 2030, however, nearly 30% of all vehicle sales are expected to be electric.
As Tesla stock has proven, big gains are possible by investing early. While plenty of risks remain, Lucid Group (NASDAQ: LCID) could very well be the next Tesla, potentially generating huge wealth for your portfolio in the process. Right now, there are two reasons in particular to believe Lucid shares are a compelling “buy it for life” investment.
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1. Lucid is ready to tap the mass market
One of the biggest drivers of growth in an EV maker’s journey is the launch of so-called “mass market” vehicles. These are cars that are affordable to the masses, with price tags typically under $50,000. Yet again, Tesla provides clear proof of how valuable the launch of mass market vehicles can be. Today, its two most affordable models — the Model 3 and Model Y — account for more than 90% of its vehicle sales. Without these two models, Tesla would arguably be just a fraction of its current size.
Right now, Lucid is far from achieving Tesla’s size and scale. Last year, the company had just one model on the market: The Lucid Air, a sedan that can easily cost more than $100,000 depending on options. In early 2025, Lucid doubled its lineup with the launch of its Gravity SUV platform. Analysts believe that this will help sales grow by 72% this year, with another 97% growth expected in 2026. But the Gravity SUV can also cost upwards of $100,000 depending on options, limiting its appeal to a wide audience.
By the end of next year, however, Lucid expects to start production of two mass market vehicles: a sedan and a crossover, both priced under the critical $50,000 threshold. These vehicles will essentially compete head to head with Tesla’s Model 3 and Model Y. “Lucid does not exist to be a niche luxury manufacturer,” the company’s former CEO, Peter Rawlinson, stressed in February.
Critically, Rawlinson departed Lucid abruptly a few weeks after those comments were made, putting his optimistic timeline in jeopardy. If the launch timeline is maintained, however, we could see Lucid’s growth rise exponentially in 2027, following what are expected to be banner years in both 2025 and 2026.
The impending launch of two new mass market vehicles should get investors excited. But there’s another growth opportunity that could arguably be even more lucrative in the long term.
Image source: Getty Images.
2. Lucid’s biggest growth opportunity won’t be making EVs
Rawlinson wasn’t shy about his expectations for the company. “We want Lucid to be huge,” he said earlier this year before his departure. He wanted the company to produce more than a million cars every year by the early 2030s. Beyond that, he thought Lucid’s future might be to simply sell its technology to other automakers — an arguably more profitable business with greater scaling potential.
Lucid’s transition toward this future has already begun. In 2023, it announced a partnership with Aston Martin. The deal made it so that Aston Martin could gain access to Lucid’s proprietary powertrain technology, which will be implemented in upcoming Aston Martin EVs.
In December 2024, Lucid teased that it was talking with “a couple” of other manufacturers about similar deals. “It would be lovely if we could supply technology to a traditional car company to help them on their way to sustainability,” Rawlinson commented. “Perhaps we can leverage economies of scale with their parts bin and other aspects of the business.”
We haven’t received any updated commentary from new CEO Marc Winterhoff. But long term, Lucid’s car manufacturing business should simply be a way to showcase its technology. If that’s true, we could see Lucid transitioning to this business model entirely, since tech licensing typically generates higher profit margins and greater scaling opportunities. As EV penetration takes off, Lucid could essentially sell its technology to the winners, rather than needing to compete directly itself.
While there remains plenty of execution risk, this makes Lucid a promising investment that could generate immense wealth over a multi-decade holding period.
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Ryan Vanzo 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.
