Despite reporting record deliveries and topping analyst expectations, Lucid Group's (LCID +3.52%) stock tumbled after its earnings report. The shares are now down more than 25% year to date as of this writing.
Let's dive into the electric vehicle (EV) maker's most recent results to see if this is a good time to scoop up some shares.
NASDAQ: LCID
Key Data Points
Record deliveries
Lucid delivered a record 3,099 vehicles in the fourth quarter, up 79% from a year ago. Meanwhile, its 2024 deliveries were up 71% to 10,241 vehicles. It produced 9,029 vehicles for the year and 3,386 vehicles in Q4, which was just above its 9,000 vehicle projection for the year.
The company plans to more than double production next year to 20,000 vehicles. It said this target takes into consideration potential challenges with supply chain constraints and regulatory issues. Meanwhile, it expects to see continued growth in 2026 helped by a full year of production of the Lucid Gravity, an SUV with three rows of seats. It also is scheduled to begin production of its new midsize vehicles in late 2026.
Revenue for the quarter soared 49% to $234.5 million. Earnings per share, meanwhile, was a loss of $0.22 compared to a loss of $0.29 a year ago. Analysts were looking for revenue of $214 million and a loss of $0.25, as compiled by LSEG.
However, like some other early-stage EV companies, Lucid is currently selling its vehicles for less than the cost to make them. The company had a negative gross margin of 89% in the quarter, or negative 108% when excluding the favorable impact from a net supply recovery it was able to negotiate with its suppliers.
Lucid expects to see meaningful gross margin improvements in 2025 led by production scale, mix, and cost reductions. It estimated gross margin for the first half of the year similar to Q4 (excluding the one-time gain) and to significantly improve in the second half due to greater scale.
The company had operating cash outflow of $533.1 million in the quarter, and negative free cash flow of $824.9 million after spending $291.6 million in capital expenditures (capex) in the quarter. It ended the year with $4 billion in cash and short-term investments and another $1 billion in long-term investments. It currently carries $2 billion in debt.
For 2025, Lucid plans to spend $1.4 billion in capex related to its AMP-2 expansion (its Saudi Arabia plant), Atlas powertrain manufacturing at its Arizona facility, and increasing its retail infrastructure. It says it has $6.1 billion in liquidity, which will give it a runway into the second half of 2026.
It is also exploring expanding its technology license business, while it will also look at other technology monetization options. The company is a leader in power train technology and is also advancing its driver-assistance system functionality. It expects to introduce hands-free driving later this year.
The company also announced that Peter Rawlinson will step down as chief executive officer after 12 years on the job. He will continue to be an advisor to the company. Chief Operating Officer Marc Winterhoff will step in as interim CEO as the company's board looks for a new full-time replacement.
Image source: Getty Images.
Can Lucid rebound?
Lucid showed in Q4 that it is making some solid progress with record deliveries and improving its gross margin. Meanwhile, it has some big production goals for 2025 and will look to introduce cheaper midsize EVs, starting at about $50,000, toward the end of 2026, which should open it up to a wider audience. The company plans to make three unique midsize vehicles, giving consumers some options.
That said, this is a pretty tough environment for early-stage EV makers. Elon Musk, CEO of the largest U.S. EV maker, Tesla, has emerged as a key figure in the new presidential administration of Donald Trump and appears to want to end policies that helped his company grow in order to stifle and perhaps eliminate upstart competition. From the potential of ending EV tax credits to tariffs, Lucid will have to navigate some potentially very unfavorable conditions.
One bright spot for the company in all this is that it is backed by Saudi Arabia's Public Investment Fund, so it should be well funded. Meanwhile, in addition to having a factory in Arizona, it also has a plant in Saudi Arabia. It will look to use this factory to focus on the European market, which wouldn't have the same potential issues as the U.S.
That said, I don't think I'd want to own an EV maker with a negative gross margin in this environment. There are just too many risks at the moment.
