Shares of the eclectic vehicle start-up Lucid Group (LCID 9.26%) fell today after the Trump administration said late yesterday that it would roll back requirements on automakers to produce electric vehicles (EVs).
While the change doesn't directly impact Lucid's manufacturing, the move could make it more economical for automakers to sell gas-powered vehicles, rather than EVs, and it comes at a time when Lucid is facing significant losses.
Lucid shares are likely also sliding along with the broader market as investors grow concerned about the impact of tariffs on the economy. Lucid's stock was down 5.3% as of 2:35 p.m. ET.
The EPA backs away from EVs
The Environmental Protection Agency (EPA) said yesterday that it would begin backing away from former President Joe Biden's vehicle emissions rules. The rules included requirements for automakers to build more EVs in the coming years as well as reduce tailpipe emissions.
EV stocks are often susceptible to good or bad news in the broader industry, so it's not surprising to see Lucid's shares fall today. Any moves by the U.S. government away from supporting EVs are generally viewed as negative for the electric vehicle market.
Investors are also growing concerned that President Donald Trump's ongoing tariff threats will weigh down business growth. Stocks have been volatile over the past several days as some companies issued lower-than-expected guidance, citing economic uncertainty.
Lucid is a premium electric vehicle brand, so any slowdown in the economy could hit the fledgling automaker hard. Additionally, rising prices due to tariffs could hurt auto sales at a time when Lucid has significant losses. The company reported a net loss of $2.7 billion in 2024, a very slight improvement from a loss of $2.8 billion in 2023.
A cloudy crystal ball
Aside from the EPA shifting away from EVs, investors are trying to gauge how tariffs with U.S. trade partners will impact the economy. So far, they don't like what they see. Lucid investors are likely considering what the EV market will look like later this year if the U.S. economy slows down, and some are selling their shares now.
That doesn't mean a slowdown is inevitable, and it doesn't mean EVs are doomed, but there's a real concern about rising prices and potentially higher inflation, and that's clouding the business outlook right now.
