Lucid Group (LCID 1.19%) is a startup automaker attempting to take on industry giants. That's a tall order, and as such, most investors are probably better off watching this company from the sidelines. However, for more aggressive investors, the company's award-winning technology in what is still a relatively new electric vehicle (EV) niche could make it worth the risk, particularly while the stock is trading below $2.50 per share.
Here's what you need to know.
Lucid is trying to build its business in more ways than one
The first step for Lucid was to create an electric vehicle that customers would want to buy. It did that, and it has won industry accolades along the way. One of the biggest selling points for Lucid vehicles is the range that they offer -- concerns about being able to travel long distances are among the most notable worries for potential buyers of electric vehicles (EVs).
Image source: Getty Images.
The only problem is that having the best technology doesn't always lead to business success. The typewriter keyboard is a great example: Most still use the QWERTY configuration, despite the fact that more efficient keyboard configurations were developed -- they just never took off. The VCR versus Betamax battle was another example of the "best" technology not winning out. And Lucid, despite having great technology, is still losing money.
Yes, Tesla (TSLA +1.48%) attempted to do the same thing and succeeded. However, when Tesla did it, the competing legacy automakers weren't making many EVs. The field was wide open. Now, all of the major automakers are making EVs, and a host of other EV makers have debuted around the world. The playing field Lucid is trying to maneuver within is much more crowded.
The opportunities are huge, the risks are huge
That said, if Lucid does manage to expand its footprint in the EV industry significantly, there would be material upside potential for the stock. Even if it never matches the gains achieved by Tesla, just half of those gains would still leave investors with huge returns if they buy Lucid now.
Data by YCharts.
But don't jump until you have a clear understanding of the risk. For example, Tesla sold around 337,000 EVs in the first quarter of 2025. Lucid delivered around 3,100 -- barely even a rounding error relative to Tesla's total. The contrast makes it crystal clear just how early Lucid is in its development. Moreover, that 3,100 figure was up by more than 50% from the roughly 2,000 vehicles it delivered in the first quarter of 2024.
Of course, that growth in deliveries also shows the progress that Lucid has been making on the production front. So, too, does the $366 million it lost in the first quarter of 2025 -- as massive as that figure is, it was down sharply from the $681 million loss it booked in the same quarter a year earlier. And yet the red ink is still material, and highlights the risks investors must accept to own this stock.
NASDAQ: LCID
Key Data Points
Buy Lucid? It depends.
If you are a risk-averse investor, you should not buy Lucid Group stock right now, no matter what the price is. It is a high-risk upstart, and there's a very real chance that it will never scale up far enough to become sustainably profitable. However, Lucid is making slow and steady progress as a business. Given the capital-intensive nature of manufacturing, that is basically all one can expect.
And yet, if it keeps making slow and steady progress, its chances of success increase. For risk-tolerant investors, it could be worth further research and potentially opening a position in Lucid now. Just go in knowing that a positive outcome is uncertain, and that even if it does achieve one, there are likely to be many more bumps along the way.
