Is there a new clubhouse leader in the electric vehicle industry?
Lucid Group (LCID -0.87%) recently made an impressive headline. Its flagship vehicle, a premium all-electric sedan called the Lucid Air, set a new world record for the longest journey by an electric car on a single charge. The Grand Touring model of the Air traveled a whopping 1,205 kilometers, or approximately 749 miles. It's an impressive feat, to say the least.
But is it enough to turn the stock around? Shares of Lucid Group have been a horrendous investment, dropping over 95% from their peak in 2021.
Here is what lies ahead for Lucid Group, and what that could mean for the stock a year from now.
Image source: Getty Images.
Lucid's technology may be awesome, but the company's finances are not
The tricky thing about the electric vehicle business is that having a good product is a must-have, but it doesn't solve all of your problems.
It's costly to lay the groundwork for a successful automotive business, and you need to sell a lot of vehicles before you can manufacture them profitably. Tesla may have opened the door to opportunities for the rest of the electric vehicle industry, but companies must still get off the ground and build up to a point where the business can sustain itself.
Lucid Group reported impressive growth for the second quarter of 2025, delivering 38% more vehicles than it did the prior year. Unfortunately, that growth is from a small number. Lucid has delivered just 6,418 vehicles over the first half of 2025. As a result, the company operates at significant losses:
LCID Revenue (TTM) data by YCharts
The good news for the business is that Lucid has partnered with some deep-pocketed allies. Saudi Arabia's Public Investment Fund is the company's largest shareholder, and Lucid has established operations in the country. That likely means financial stability for as long as the company has that support. The flip side, and the bad news for other investors, is that Lucid Group's share count has increased by nearly 80% over the past three years. The aggressive share dilution has contributed to the stock's miserable performance.
Yet, the stock commands a premium over most of its peers
Despite the stock's steep decline, its valuation isn't all that appetizing. Lucid Group's enterprise value is currently 6.3 times its trailing-12-month sales. That's higher than almost every one of Lucid Group's peers or direct competitors:
TSLA EV to Revenues data by YCharts
Tesla may not be an entirely suitable comparison, given the company's size, market share, and involvement in additional businesses, including energy storage, autonomous vehicle technology, and humanoid robotics. Sure, Lucid Group is growing faster than legacy automotive manufacturers, but it's also much smaller and deeply unprofitable.
Rivian Automotive is likely the closest comparison, and Lucid Group's valuation is more than double Rivian's. Both companies are currently deeply unprofitable and are working toward bringing new, more affordable models to market in hopes of achieving the sales volume that will sustain them financially.
So, where will Lucid Group be trading in one year?
That playbook worked for Tesla. Today, Tesla's more affordable Model 3 and Model Y account for the majority of its sales. Lucid Group is developing a mid-sized SUV called the Lucid Earth, and it may be the smash hit that solidifies Lucid's business, much like the Model 3 did for Tesla. But with the Lucid Earth unlikely to arrive before late next year or 2027, investors won't find that out within the next year.
I suspect that Lucid Group may struggle to sustain enough growth to support the stock's current valuation, especially now that the federal electric vehicle tax credit will end at the end of September. The stock's valuation could easily retreat lower, closer to that of Rivian and other automotive companies, unless some unexpected and dramatic positive developments occur.
It's only a prediction, but given Lucid's short-term circumstances and steep price tag, it seems likely that Lucid Group will trade at a lower price in one year than it is now.
