Lucid’s Stock Rises, But Analysts Sound the Alarm – What’s Next?

Lucid Group (NASDAQ: LCID), the luxury electric vehicle (EV) maker, saw a small bump in its stock price recently, even as analysts continue to slash their price targets. This mixed reaction reflects the company’s ongoing battle between its ambitious growth plans and the financial challenges that could make or break its future.

Stock Sees a Slight Lift, But Investors Are Cautious

Lucid’s stock closed at $2.17 on March 12, up 0.7% from the previous day. While that might sound like good news, the stock is still trading far below its highs from previous years. It briefly reached $2.25 before settling back down.

One concerning sign? Trading volume was way lower than usual—about 34 million shares traded hands, which is a 61% drop compared to its normal volume. That suggests fewer investors are interested in buying in right now, even as the stock sees slight gains.

Wall Street Is Getting Nervous

While Lucid’s stock ticked up a little, analysts have been less optimistic, with several firms lowering their price targets due to concerns over cash flow, production struggles, and leadership changes.

• Stifel Nicolaus cut its price target from $3.50 to $3.00, keeping a “Hold” rating. The firm pointed to Lucid’s difficulty in ramping up production and turning a profit.
• Redburn Atlantic went even further, downgrading Lucid to “Sell” and slashing its price target from $3.50 to just $1.13. Analyst Tobias Beith warned that Lucid is burning through cash quickly and needs to massively increase production to stay afloat.
• Bank of America also downgraded Lucid to “Underperform”, lowering its price target from $3.00 to $1.00. This downgrade came right after Lucid’s CEO, Peter Rawlinson, suddenly resigned, adding even more uncertainty.

Big Plans, Bigger Financial Struggles

Lucid has been spending money at a rapid pace. In 2024, the company reported a $3.1 billion net loss, which is even worse than the $2.8 billion loss it suffered in 2023.

On the bright side, revenue grew to $234.5 million, beating Wall Street expectations. And Lucid is making progress on production—9,029 vehicles were built in 2024, with 3,386 of those coming in the fourth quarter alone.

Looking ahead, the company plans to more than double production in 2025 to 20,000 vehicles, largely thanks to its upcoming Gravity SUV. While this sounds promising, the question remains: Can Lucid afford this level of expansion without running out of cash?

CEO Resigns—What’s Next for Lucid?

Lucid’s leadership shakeup hasn’t helped investor confidence. CEO Peter Rawlinson stepped down on February 26, ending a 12-year run at the company. He will stay on as a strategic advisor, but his departure raises big questions about Lucid’s future.

For now, Marc Winterhoff has been named interim CEO. But finding a permanent leader during such a critical time could make or break Lucid’s long-term success.

Can Lucid Survive in the Cutthroat EV Market?

Lucid is facing some major hurdles as it tries to compete in the crowded EV space. Some of the biggest challenges include:

• Scaling up production: Lucid needs to build way more cars while keeping costs under control.
• Financial stability: The company is burning through cash fast and may need to raise more money—potentially hurting existing investors.
• Leadership changes: With a new CEO stepping in, investors are unsure about the company’s direction.

What’s Next for Lucid?

Investors who think Lucid has a long-term vision and others who think it won’t withstand the challenges ahead are at odds over the company’s shares at the moment.

As Lucid strives to boost output, limit expenses, and demonstrate to investors that it can someday turn a profit, the upcoming months will be critical. The key issue still stands: Is Lucid running out of time, or will it be able to carry out its ambitious plans?