What happened

Investors in electric vehicle (EV) start-up Lucid Group (LCID 3.57%) have to be feeling anxious lately. The stock has dropped more than 10% over the last week, and 35% in the past month. That downtrend is continuing to start this week. Lucid shares plunged nearly 5% at the start of trading Monday, and remained down 3.1% as of 10:45 a.m. ET. 

So what

Today's drop comes as the company seems to be struggling to hold on to its potential customers while the industry backdrop also looks uncertain. Reports surfaced last week that Lucid has been reaching out to consumers that canceled reservations and offered discounts to try to revive interest in its luxury EV offerings.

Lucid's Air Grand Touring model currently starts at a price of $154,000. The company was reportedly also offering employees a discount of $18,000 to take delivery before the year ends. Investors may also be reacting to comments from Tesla CEO Elon Musk taking a swipe at his competitor on social media late last week saying, "They are not long for this world."

Lucid Air luxury EV in showroom.

Image source: Lucid Group.

Now what

Lucid reported a drop of nearly 10% in its reservation backlog over the three months from June to September, and the discounts seem to confirm the company is aiming to reverse that trend. Musk looks to be trying to take advantage of his competitor's struggles to sway public opinion. 

But his point is probably not far from the reality of the situation. Lucid competitor Rivian Automotive has reported a growing backlog, but said today that it was suspending plans to start a joint venture with Mercedes-Benz to build electric trucks in Europe as it works to conserve cash. Rivian had just announced the agreement for that joint venture in September. That highlights the shift in the economic environment over the past several months, and is likely why Lucid's struggles have been sending investors away from the stock.