Trading down over 60% since the start of the year, Lucid Group (LCID 7.87%) stock has remained a poor performer. In 2025, investors would have been much better off by simply buying an exchange-traded fund (ETF) that tracks the S&P 500 index. The S&P 500 has increased by approximately 13% over this time frame.
Even if you are particularly bullish on the long-term electric vehicle (EV) growth trend, it still makes little sense to maintain a Lucid position. Why? It all has to do with another publicly traded EV contender that could have a clearer and more concrete path to profitability and higher prices.
NASDAQ: LCID
Key Data Points
Why Lucid shares have stayed under pressure
Lucid's most recent share price declines are just the tip of the iceberg in terms of this stock's poor performance. Around five years ago, when this stock's predecessor, a special purpose acquisition company (SPAC), announced it was going to take Lucid public, shares traded for as much as a split-adjusted $580.50 per share.
Compare that to the current stock price, and you'll see that, over the long haul, Lucid has been a horrendous investment, losing over 98% of its value. Sure, past performance doesn't guarantee similar results in the future. Still, I would think twice before bottom-fishing in Lucid.
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Although Lucid continues to increase its production and sales capacity, cash burn remains very high. For instance, during the quarter ending Sept. 30, 2025, revenue increased to $336.6 million, a more than 68% year-over-year increase; however, operating cash burn also ballooned to $756.6 million, up 63.5% from the prior year's quarter.
Worse yet, to cover these losses, Lucid has continued to rely on the sale of new equity and convertible bonds, largely to its majority shareholder, Saudi Arabia's Public Investment Fund (PIF). The resultant share dilution has been a key factor in the stock's long-term decline, and as cash burn persists, it will likely drive a further erosion of the stock price.
A better choice for EV bulls
Recent changes in U.S. Federal EV policy have led to domestic sales stalling, but long-term forecasts still call for EVs to continue becoming an increasingly larger share of the vehicle market. Moreover, globally, EV sales are up 21% this year.
However, among early-stage EV companies, there may be a stronger contender: Rivian Automotive (RIVN 8.11%). For one, Rivian is set to debut its lower-priced R2 electric SUVs during the first half of next year. This could be a game-changer in terms of scaling up. Lucid has a similar vehicle, the Gravity, in the works, but it won't debut until later in 2026.
NASDAQ: RIVN
Key Data Points
More importantly, with $7.7 billion in liquidity, Rivian may have sufficient funds to ramp up R2 production. Depending on the R2's success, the company's days of dilutive financing may be behind it.
Meanwhile, Lucid has as much as $5.5 billion in liquidity, but much of this stems from a loan credit facility from PIF. While not certain, who's to say that PIF doesn't decide to convert this debt financing into equity, leading to further share dilution? Add in other factors on Rivian's side, such as further AI and autonomous vehicle technology progress, and it's clear that, if you're bullish on EV stocks, Rivian is a better choice than Lucid.
