Investors in Lucid Group (LCID -4.06%) had a lot to chew on in July, including a massive robotaxi deal that stunned the markets. Lucid stock rallied 16.6% during the month, according to data provided by S&P Global Market Intelligence, even surging 48% at one point in trading.
Shares, however, seem to be under pressure and have lost around 7% of their value in August so far, as of this writing. Was Lucid's July rally then a dead cat bounce, or is this an opportunity to buy a promising yet beaten-down electric vehicle (EV) stock?
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Investor interest in Lucid stock is rising
Lucid sells Air sedans and Gravity SUVs. From July 31, the EV maker equipped all its Air sedans, regardless of model and year of make, with adapters that can work on Tesla's supercharger network. Gravity SUVs already had access to Tesla's superchargers.
Meanwhile, denser battery cells have boosted the EPA range estimate for Lucid's 2026 Air Touring model by over 6%, to 431 miles.
Lucid expects high EPA ratings, access to Tesla's extensive public charging network, and other recent enhancements such as advanced driver assistance systems to make its EVs more appealing in an intensely competitive market. In a bid to add to its brand appeal, Lucid also hired actor Timothée Chalamet as its first-ever global brand ambassador in July.
Lucid's robotaxi partnership with Uber Technologies (UBER 0.70%), however, sent the stock into a tizzy. Uber will buy over 20,000 Lucid Gravity SUVs equipped with Nuro's Level 4 autonomy software and deploy them over six years, with an expected launch in late 2026. As part of the deal, Uber also plans to invest millions of dollars in Lucid.
Lucid stock could jump 10x if this happens
In July, Lucid proposed a 1-for-10 reverse stock split. A reverse stock split, if it happens, will 10x Lucid's stock price.
There are no real benefits for investors, though, as their investment value in Lucid shares, as well as the company's market capitalization, will remain unchanged. However, a reverse stock split can benefit Lucid in two ways: prevent delisting from the Nasdaq stock exchange, and make its stock more attractive to institutional investors who typically avoid penny stocks.
Lucid needs real catalysts to maintain stock momentum, though. While the Uber partnership will infuse millions in cash and marks Lucid's foray into the autonomous vehicles market, which is expected to hit trillions of dollars by 2030, Lucid's production woes are far from over yet.
Lucid just cut its full-year production guidance to 18,000 to 20,000 vehicles from its previous forecast of 20,000 vehicles. Other than supply bottlenecks, Lucid is struggling with high costs and manufacturing inefficiencies, all of which could impact demand and sales. Lucid is also deep in losses, with its net loss rising by 8% to $855 million in the second quarter.
These are just some of the factors that investors should keep in mind before buying Lucid, a stock that has all but wiped out investors' money from its IPO days.
