Lucid Group (LCID -1.93%) is trying to do something pretty audacious. If it succeeds, it could be a millionaire-maker stock. If it fails, the company will likely go out of business or be bought out for the technology it has developed.
Which gets to the heart of the issue for this upstart electric vehicle (EV) maker. Here's what you need to know before buying Lucid today.
What does Lucid Group do?
Lucid is an automaker. From a big-picture perspective, this is a mature industry with a small number of entrenched competitors. By comparison, Lucid is a pipsqueak trying to nose its way in.
That is a tall order, but not an impossible task. Tesla is proof that a new entrant can, in fact, break into the auto business.
Image source: Getty Images.
That said, Lucid is trying to catch the lightning in a bottle that Tesla used: It also builds all-electric vehicles.
This is a relatively new technology that Tesla basically proved could support a stand-alone business. The problem is that when it started out, there wasn't much competition. Today, every major automaker is building EVs. The playing field is much less conducive to an upstart breaking in.
If Lucid can achieve success similar to that of Tesla, it could be a very valuable company. But if it doesn't get enough scale, it will probably fall to the wayside, as have many other upstart EV makers in recent years.
Lucid has a long way to go
This is where the problem lies for long-term investors. Lucid has earned industry accolades for its technology, but it still isn't making and selling enough cars to turn a profit.
To put some numbers on that, Tesla produced roughly 335,000 vehicles in the first quarter of 2025; Lucid produced less than 3,000 -- not even 1% of what Tesla built in the quarter. It is basically just a rounding error in the automaking sector.
That isn't meant to be a slight against Lucid. The truth is, the company has achieved a huge feat in doing what it already has.
For the most part, it is executing very well, hitting important milestone after important milestone. There have been some bumps along the way, but that's normal with an upstart business, particularly one that is highly capital intensive and complex. Like building cars.
However, the fact remains that Lucid is trying something very difficult. And something that is much more difficult today than when Tesla did it a few years back. And even if it succeeds, it will likely continue to have red ink at the bottom of its income statement for years to come.
In fact, right now, Lucid is losing money on every car it makes and sells. And that doesn't even take into consideration the research and development costs that it faces or the selling, general, and administrative costs of running the business.
Lucid is not for the faint of heart
Lucid continues to push forward, which is good. But it has only around $3.6 billion in cash on its balance sheet, down from $4 billion at the end of 2024.
That's just a snapshot, and the company can always raise more capital. The real point is that it is in a race against time financially even as it has to race against its automaking peers on the technology front. There is no guarantee that it will win either race.
If Lucid Group grows to where it can turn a sustainable profit, it could very well make investors who buy it today very wealthy. But only investors with very strong constitutions should buy it, because there remains a very material risk that it falls short of its lofty goals.
