Lucid Group's (LCID 0.41%) electric vehicle (EV) sales may be struggling, but its stock took off like a rocket this week. Shares soared close to 40% -- and without any major news. As of Friday morning trading, the stock was still 24% above where it closed last week, according to data provided by S&P Global Market Intelligence.

Yet Lucid shares are still down by more than 70% over the last year. And that's part of what likely caused investors to drive them higher this week.

Lucid stock followed Lucid's results

Simply put, Lucid stock has cratered over the last year because it isn't selling enough cars. It delivered a total of just 6,000 vehicles in 2023. Consider that in November 2021 the company wrote in an investor update, "We remain confident in our ability to achieve 20,000 units in 2022." So its progress has been very disappointing to investors.

This week's stock pop didn't come because the company has newly revised production expectations. Rather, it's due to news of an agreement to secure aluminum parts from a Saudi Arabian mining company. That along with the extremely high short interest is likely what drove shares higher.

A lifeline remains

Saudi Arabia looks to be one of Lucid's last remaining lifelines. The Saudi Arabian sovereign wealth fund was a large investor in Lucid before its public listing. After an additional $1.8 billion investment from that government's Public Investment Fund (PIF) last year, the Saudi fund controls over 60% of Lucid's outstanding common stock.

The EV company previously announced plans to build a manufacturing facility in Saudi Arabia, with the Saudi government agreeing to purchase up to 100,000 Lucid vehicles over the next 10 years. So the Saudi connection could be what Lucid needs to stay afloat as it works to launch its second electric vehicle, the Gravity SUV, later this year.

A new supply agreement for aluminum panels may have provided investors with a sign of hope that the Saudi connection is getting even stronger. Combine that with the fact that about 30% of Lucid's outstanding shares were sold short as of mid-January. That helps to explain what looks like a short squeeze this week.

That probably means the move higher won't be sustainable, at least for now. Other than the Saudi Arabian backer money, Lucid will need its Gravity SUV to show strong sales. It remains to be seen whether that will happen, and short squeeze notwithstanding, the stock likely won't move much until the business itself does.