What happened

After jumping by more than 20% over the last month, shares of Lucid Group (LCID -1.80%) plunged on Wednesday morning. The stock of the luxury electric vehicle (EV) maker skidded lower by as much as 10%, and remained down by 9.4% as of 10:18 a.m. ET. 

So what

The reversal in momentum came after Lucid announced its second-quarter vehicle production and delivery results, and they were disappointing. The EV start-up said it delivered just over 1,400 vehicles when analysts on average expected deliveries to reach 2,000 units, according to FactSet Research Systems.

Lucid's deliveries almost exactly matched the level it shipped in the first quarter. The lack of sequential growth could have several causes, but investors may fear the worst: a lack of demand for its luxury electric sedan offerings. In the second quarter, Lucid produced less than 2,200 vehicles, which was even fewer than what it produced in the previous quarter. 

Now what

Lucid's high-end Air sedan models are priced in a range from almost $90,000 to as much as $138,000 for the Grand Touring trim, which provides an industry leading 500-mile battery range. The company has plans to expand into Saudi Arabia, and it said that material shipments to that country began in the second quarter. The Saudi Arabian government is invested in Lucid and has said it intends to purchase 100,000 Air sedans over the next decade. Lucid also intends to build a manufacturing facility in Saudi Arabia.

But that's not a long-term solution if there is a lack of general demand for the niche product. Lucid is launching its next product -- the Gravity SUV -- in 2024. Even that is being billed as a high-performance luxury vehicle, though. So investors shouldn't expect the company to tap into the mass EV market even with its next offering. 

Today's news was disappointing, and the stock is giving back some of its recent gains as a result. The next catalyst will come on Monday, Aug. 7 when Lucid provides its full quarterly financial and operational update.