Lucid Group (NASDAQ: LCID) has been on a rollercoaster ride, with its stock undergoing a sharp correction in late February. Mid-month, shares peaked at $3.50, but now hover just above $2. This downturn presents an intriguing opportunity for investors looking to capitalize on high-growth electric vehicle (EV) stocks at a discount. But does Lucid have what it takes to make a comeback?
Key Catalysts on the Horizon
Lucid remains a relatively lesser-known name in the EV space, overshadowed by giants like Tesla and Rivian Automotive. Tesla, the market leader, generated nearly $100 billion in revenue in 2024, while Rivian pulled in close to $5 billion. By contrast, Lucid reported just $800 million in revenue, reflecting its limited market penetration.
One major factor behind Lucid’s modest sales figures is its limited vehicle lineup. Until recently, the company only offered the Lucid Air, a luxury sedan with a price range starting at $70,000 and extending up to $250,000. Competing in a niche market against Tesla’s Model S and other luxury brands has constrained Lucid’s growth potential.
However, December 31 marked a turning point with the delivery of Lucid’s new Gravity SUV. This premium SUV expands Lucid’s offerings, doubling its lineup much like Tesla did when it introduced the Model X. Analysts predict the Gravity SUV could significantly boost Lucid’s revenue, with estimates pointing to an impressive 50% quarterly sales growth—outpacing both Tesla and Rivian. For the full year, projections suggest Lucid’s revenue could nearly double, making it one of the fastest-growing EV companies in the industry.
A Valuation at Historic Lows
Following its recent sell-off—down 22% over the past three months—Lucid is trading at one of its lowest valuations in years. The decline was fueled by two major factors. First, a broader industry downturn saw Tesla shares drop roughly 30% in the last month, dragging down other EV stocks. Second, Lucid faced an internal shake-up with the departure of CEO Peter Rawlinson, who stepped down from his role to become a strategic technical advisor. COO Marc Winterhoff has taken over as interim CEO, adding an element of uncertainty to Lucid’s future direction.
Is Lucid a Buy After the Dip?
Lucid’s current valuation offers an attractive entry point for investors willing to bet on its long-term potential. The introduction of the Gravity SUV is expected to drive substantial revenue growth, and if sales meet or exceed estimates, the stock could rebound sharply. However, if the company fails to achieve the projected doubling of revenue in 2025, further downside is possible.
Looking beyond 2025, Lucid plans to launch three new mass-market models at more affordable price points. While these vehicles could significantly expand Lucid’s market share, they remain years away from production. Investors with a high-risk tolerance may find Lucid an enticing opportunity, but competitors with stronger financial backing and clearer paths to mass-market adoption could be more appealing alternatives.
