Tesla proved to Wall Street and investors alike that the electric vehicle (EV) business could drive huge profits. Investors who jumped on Tesla's vision early were well rewarded with a sky-high stock price and valuation for years.
Now investors have more opportunities for similar gains with young EV makers such as Lucid Group (LCID +4.88%). Right now, Lucid is firing on all cylinders with a number of delivery records, but the stock could continue to disappoint. Here's why -- and what to look out for ahead.
Momentum is real
Lucid investors surely remember the early days when production hiccups and supply chain snags were the norm, causing a bit of frustration when it came to accelerating production and deliveries. As the young EV maker worked through these issues, momentum slowly built, and now Lucid has recorded eight consecutive quarters of record deliveries.
That delivery momentum is very likely to continue in the near term because Lucid's Gravity production really just began firing on all cylinders toward the end of 2025, as you can see in the chart.
Data source: Lucid's 2026 Investor Day presentation.
Lucid's Gravity nearly quadrupling its unit sales in the U.S. during the fourth quarter is a sign of things to come, likely driving more quarterly delivery records going forward. Investors can expect another small boost in the near term with Tesla discontinuing the Model S and X during the second quarter. That's because Lucid has seen a serious uptick in Tesla consumer trade-ins.
NASDAQ: LCID
Key Data Points
In 2025, Lucid's Air sedan ranked No. 1 as a customer choice after trading in a Tesla Model S, and customers chose the Air sedan at roughly twice the rate of the next-most-popular "conquest" vehicle to which they were trading up. Even with limited data, as Gravity production didn't accelerate until the fourth quarter, Lucid's Gravity ranked as customers' top choice after trading in a Tesla Model X in December.
It's estimated that there are roughly 350,000 Model S and X units in the U.S. as of January, and with Lucid becoming the top destination for luxury EV customers and the Tesla models aging, the scenario bodes well for Lucid investors.
Image source: Lucid.
Why it could still disappoint
Here's the unfortunate truth for Lucid investors who have cheered the company's production and delivery acceleration: The EV maker will likely keep setting delivery records, but until it makes consistent gross profit improvements, the stock will likely continue to disappoint investors. In fact, over the past three years, rival Rivian Automotive (RIVN +0.35%) has gone from deeper gross profit losses than Lucid to achieving its first full-year positive gross profit.
RIVN Gross Profit (Quarterly) data by YCharts
Though Rivian's 2025 deliveries represented a decline compared to Lucid's 55% increase, Rivian delivered 42,247 vehicles compared to Lucid's 15,841 -- meaning some of the gross profit discrepancy is due to scale. Despite Lucid's lower delivery volume, the time for excuses is running out because Rivian has been making gross profit progress for years, and now that the Gravity SUV is up to speed, Lucid's gross profit improvements need to follow in 2026.
