It's not often that you get a chance to invest in the next Tesla at a huge relative discount. But that's what many investors believe is the case for Lucid Group (LCID 2.17%) after a sizable correction in early 2025. Shares trade at a big discount to their historical trading range, yet sales this year are expected to grow by more than 100%.
Is this your chance to buy a promising growth stock at a bargain price? If you're looking for stocks with maximum growth upside potential, Lucid shares could be for you.
NASDAQ: LCID
Key Data Points
Three reasons Lucid stock has lost value
It should come as no surprise to learn that Lucid shares have lost nearly 25% of their value since 2025 began. Nearly every electric vehicle (EV) stock has struggled this year. Tesla shares have fallen by more than 40%, while Rivian Automotive stock is down by nearly 20%.
It's hard for a business to rise in value as the rest of its industry sinks in value. This is one of the biggest factors causing Lucid shares to nosedive so far in 2025. But why is the sector overall struggling? There are three primary factors.
The biggest is simply a reset in the market's appetite for growth stocks. Compared to conventional car manufacturers, EV makers have significantly more growth opportunities ahead of them. All of this growth is estimated by the market and then incorporated into each stock's valuation. When markets fall -- as they have so far in 2025 -- the premium investors are willing to pay for this growth typically falls, even if projected growth rates remain stable. Right now, the market is simply willing to pay far less for the projected growth of Tesla, Rivian, Lucid, and other EV companies.
Unfortunately, there are also concerns about potential growth. Last month, consumer confidence fell to its second-lowest levels since 1952. Electric vehicles still typically cost more up front than conventional vehicles, even if there are expected savings from lower maintenance needs and gas consumption over time. But that upfront premium may cause consumers to look elsewhere this year -- a direct hit to EV demand.
Additionally, the $7,500 federal tax incentive for buying an electric vehicle is now in peril under a new administration. If it's repealed, expect EV demand to drop in response.
One reason to buy Lucid shares like there's no tomorrow
All in all, Lucid Group faces a challenging 2025. Market sentiment has shifted to the negative, while several sizable headwinds for demand have emerged. But if you're willing to maintain a long-term perspective, this could be a huge buying opportunity, especially considering the impressive growth rates expected for this year and beyond.
RIVN PS Ratio data by YCharts
After the pullback, Lucid shares trade at just 7 times sales. That's still a premium valuation, but it's a 50% discount compared to highs set in 2024. Plus, thanks to the recent introduction of its Gravity SUV platform, Lucid boasts the highest expected growth rates this year, with sales expected to jump by 94.2%. Based on next year's expected sales, Lucid stock trades at roughly 3.5 times forward sales -- a much more palatable multiple.
Looking even further ahead, Lucid expects to release three mass market vehicles in 2026 with price tags of $50,000 and below. As Tesla's history proves, releasing affordable mass market vehicles provides a huge opportunity for growth. I'm skeptical of the company's aggressive production timeline, but whether the vehicles arrive in 2026 or 2027, it's clear that Lucid has a paved path for growth, and buying now gives investors a sizable discount to the stock's trading history in recent years.
But make no mistake: This is an investment for aggressive growth investors willing to take a high-risk, high-potential-reward position.
