What happened
Lucid Group (LCID -2.86%) stock was down 4.7% as of 1:15 p.m. ET Tuesday, despite riding higher Monday on a monster day for Tesla (TSLA -3.40%).
Lucid stock benefited from a Tesla press release the resultant investor bullishness over electric car stocks yesterday -- but today is a different story.
Image source: Getty Images.
So what
On Monday Tesla announced that it delivered 308,600 electric vehicles in the fourth quarter of 2021, and 936,172 EVs in all of 2021, crushing analyst predictions on both counts. And while that might sound like pretty good news for the popularity of EV stocks in general, it might actually only be good news for Tesla stock in particular.
Consider: Last quarter, Lucid reported losing $524.4 million on less than $1 million in revenue as it struggled to ramp up production. On the one hand, Lucid says it has 17,000 preorders for its electric cars. On the other hand, the fact that it needs to invest in production to fulfill those orders means that Lucid will probably be losing money for quite some time. (According to analysts polled by S&P Global Market Intelligence, it will be losing money at least through 2024.)
Now what
In contrast, Tesla is both growing production and earning a profit while doing it -- so much profit, in fact, that Elon Musk says he doesn't even need government subsidies anymore, and that "all subsidies should be eliminated."
With each passing quarter, Tesla is racing ahead to capture more and more EV market share, while Lucid is still struggling to get out of the gate. Although I don't think we can write Lucid off in this race just yet, the longer it takes to ramp up production, the more dominant a rival Tesla is going to become.
The road ahead isn't at all clear for Lucid -- and I cannot say that the investors selling Lucid stock today are wrong to do so.
