Lucid Shares Drop 80%

Electric vehicle (EV) maker Lucid Group Inc. (NASDAQ: LCID) will have a 1-for-10 reverse stock split, which will take shares from just above $2 to just above $20. The move does not change its market cap. In fact, Barron’s reports, “Traders sometimes see reverse stock splits as a sign that a share price will fall further, just as they see traditional stock splits as a source of upside.” Lucid management has to hope that is not correct. Its stock is down 80% over the past five years, while the S&P 500 is up by over 90%.

Lucid has lost billions of dollars in a quest to take a large share of the U.S. EV market. The effort has been a dismal failure, as shown by its poor unit sales, weak balance sheet, and negative profit and loss statement.

In the second quarter of the year, Lucid produced just 3,863 vehicles, a tiny number, and delivered only 3,309. It reduced production estimates for the year from 20,000 to a range of 18,000 to 20,000.

In the second quarter, Lucid had a net loss of $855 million on revenue of $259 million. That compares to a loss of $790 million in the same quarter last year, on revenue of $201 million.

Lucid has at least two problems it cannot overcome. First is that its most inexpensive product is the Lucid Pure at $69,600. The Lucid Air Grand Touring has a base price of $114,900. High prices have hampered EV sales in the United States. Most companies that want to win the U.S. EV race are pushing for a $25,000 product.

Lucid’s second problem is that Tesla still has just shy of 50% of U.S. EV sales. Almost every legacy car company is pushing into the market. In terms of sales, the most successful among these are GM, Ford, and Hyundai, each of which has a market share of 10%. Both German and Japanese companies have products as well. The U.S. market has become more crowded almost every month.

There is one wildcard that also works against Lucid’s success. Most experts in the car industry say that Chinese manufacturers make the best EVs and that the price point for these is low. If they can ever overcome U.S. tariffs, the EV market will become a slugfest in which American companies are at a disadvantage.

Lucid Stock Price Prediction and Forecast 2025-2030

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