-
Shares in Lucid Group have continued to underperform as high losses persist, and the EV start-up continues to rely on dilutive equity sales to stay afloat.
-
Lucid’s continued poor performance raises questions about the merits of making a long-term bet on this would-be EV contender.
-
This is especially true as there is a stronger competitor out there, offering investors a much more appealing risk/reward proposition.
Trading down over 60% since the start of the year, Lucid Group (NASDAQ: LCID) stock has remained a poor performer. In 2025, investors would have been much better off by simply buying an exchange-traded fund (ETF) that tracks the S&P 500 index. The S&P 500 has increased by approximately 13% over this time frame.
Even if you are particularly bullish on the long-term electric vehicle (EV) growth trend, it still makes little sense to maintain a Lucid position. Why? It all has to do with another publicly traded EV contender that could have a clearer and more concrete path to profitability and higher prices.
Lucid’s most recent share price declines are just the tip of the iceberg in terms of this stock’s poor performance. Around five years ago, when this stock’s predecessor, a special purpose acquisition company (SPAC), announced it was going to take Lucid public, shares traded for as much as a split-adjusted $580.50 per share.
Compare that to the current stock price, and you’ll see that, over the long haul, Lucid has been a horrendous investment, losing over 98% of its value. Sure, past performance doesn’t guarantee similar results in the future. Still, I would think twice before bottom-fishing in Lucid.
Although Lucid continues to increase its production and sales capacity, cash burn remains very high. For instance, during the quarter ending Sept. 30, 2025, revenue increased to $336.6 million, a more than 68% year-over-year increase; however, operating cash burn also ballooned to $756.6 million, up 63.5% from the prior year’s quarter.
Worse yet, to cover these losses, Lucid has continued to rely on the sale of new equity and convertible bonds, largely to its majority shareholder, Saudi Arabia’s Public Investment Fund (PIF). The resultant share dilution has been a key factor in the stock’s long-term decline, and as cash burn persists, it will likely drive a further erosion of the stock price.
Recent changes in U.S. Federal EV policy have led to domestic sales stalling, but long-term forecasts still call for EVs to continue becoming an increasingly larger share of the vehicle market. Moreover, globally, EV sales are up 21% this year.
