Investors who miss out on a huge investment opportunity often look for similar companies that have the potential to do well, too. That's exactly the story in the electric vehicle space, with Tesla being the huge missed opportunity and Lucid Group (LCID 3.39%) being a similar company with potential. Only potential isn't enough to make a stock a good investment.
Is Lucid stock your ticket to becoming a millionaire, or is it too far behind in the electric vehicle (EV) space to catch up? The risk versus reward balance here is tilted materially in one direction.
The big news about Lucid
Lucid makes highly respected EVs with award-winning technology. To be sure, that's a great foundation for the business. The problem is that, like Tesla before it, the company has started at the high end of the auto market. There are only so many customers capable of buying expensive cars. The most recent launch from the company, the Lucid Gravity Touring, is no exception.
Image source: Getty Images.
This mid-size SUV starts at a hefty $79,000. Lucid has plans to start selling lower-priced vehicles, a path that is similar to that taken by Tesla. So there are reasons to be excited about Lucid's future. However, there's a lot more competition in the EV market today than there was when Tesla essentially created the EV category.
Being able to build a sustainably profitable business is far from a slam dunk for Lucid. In fact, while the new model is exciting, it may be too little, too late, given that EV sales have been weak since government subsidies were halted. Lucid may have simply missed the window of opportunity, and it may not have what it takes to remain a stand-alone business.
The income statement, the balance sheet, and production
The first big problem is the income statement, which is mired in red ink. Lucid is a start-up building a business in a capital-intensive industry, so losses are to be expected. However, a company can only lose money for so long before it can no longer be sustained. The losses are expected to persist for the foreseeable future, making the balance sheet particularly important.
The balance sheet, however, is equally concerning. Without getting too deep into the numbers, Lucid started 2025 stating that it has enough liquidity to last until the first half of 2026. After a recent funding round, the company now believes it has enough liquidity to last until the first half of 2027. That's meant to assuage investor concerns about the company's access to capital.
However, 2026 is around the corner, and this money-losing business is basically telling investors that it has a year to a year-and-a-half of money left. Unless you are an aggressive growth investor, that should be more than enough to keep you watching from the sidelines.
NASDAQ: LCID
Key Data Points
The other significant issue here is that Lucid's production is relatively modest by industry standards. The company highlighted in the third quarter of 2025 that its production is up materially from a year ago, rising by 116%. That's great, but it still only produced around 4,000 vehicles (generously rounding up). Tesla produced 447,000 vehicles (rounding down). Lucid simply doesn't have the scale it needs to compete effectively at this point.
Lucid has the tech, but it is high-risk
To be fair, Lucid has attractive technology. That could be enough of an edge to break into the highly competitive auto industry. So there is a chance that an investment here could help you build a seven-figure nest egg. The problem is that Lucid has a long road ahead before it is likely to become sustainably profitable.
There are significant risks to consider, notably its ability to raise the cash it needs to continue supporting its money-losing business. Ultimately, only the most aggressive investors will be inclined to consider Lucid. And even then, the risk-reward balance seems highly skewed toward the negative.
