What happened

After flying high since the start of the year, Lucid Group (LCID 5.88%) stock is getting pummeled this week. As of 9:35 a.m. ET Friday, it was trading 21% lower for the week, according to data provided by S&P Global Market Intelligence.

When the luxury electric car maker delivered its fourth-quarter results Wednesday, all eyes were on its guidance for 2023. Unfortunately, the company left investors with more questions than answers, and several analysts rushed to downgrade their ratings on Lucid stock.

So what

Lucid announced its Q4 numbers after the close of trading on Wednesday. It generated $257.7 million in revenue versus $26 million in the prior-year period, but that's also because 2022 was Lucid's first full year of electric vehicle (EV) production. For the year, it generated $608.2 million in revenue.

Investors in the EV start-up, though, are more concerned about its production and delivery rates than its revenue right now. The company managed to produce just 7,180 vehicles -- and only delivered 4,369 -- in 2022, when it originally guided for annual production of 20,000.

Turns out, Lucid won't be able to churn out 20,000 cars even in 2023. Far from it. The company just said it expects to produce only 10,000 to 14,000 Lucid Air sedans this year.

Equally worrisome, if not more so, Lucid reported reservations for only 28,000 EVs as of Thursday, a notable drop from the 34,000 reservations it reported on Nov. 7 and the 37,000 reservations it had on Aug. 3.

Lucid's tepid guidance and declining reservations triggered panic-selling of the EV stock even as multiple analysts downgraded it.

Analysts at Cantor Fitzgerald cut their price target on Lucid stock to $13 per share from $18 a share. Bank of America analyst John Murphy slashed his price target to $10 per share from $18 a share and projected that Lucid may not be able to break even on its operating and free cash flows until 2027. And R.F. Lafferty analysts cut their price target on the EV stock from $17 per share down to $12 per share.

Now what

Lucid is currently producing EVs at volumes much lower than its capacity, and that's causing two big problems for the company. First, it is driving its costs higher and causing it to burn through cash. And second, the long wait times for vehicles are discouraging potential new customers.

Given that backdrop, investors expected Lucid to ramp up production more rapidly this year. Management instead says it wants to focus on sales and marketing in 2023, and that could hurt the stock price further.

Yet there's something more that makes Lucid management's approach look far worse: The company knows its reservation numbers have been a talking point among investors and analysts for all the wrong reasons. Lucid, therefore, has decided to stop providing updates about its reservation numbers.

Ouch.