Lucid Group Inc. (NASDAQ: LCID) is experiencing a sharp downturn in trading this Friday as broader market sell-offs and industry-specific challenges weigh heavily on the electric vehicle (EV) maker’s stock. As of 3:40 p.m. ET, Lucid shares have plummeted by 7.6%, mirroring broader market declines, with the S&P 500 down 1.7% and the Nasdaq Composite falling 2.2%.
Macroeconomic Headwinds Dragging Lucid Lower
A combination of macroeconomic uncertainties and industry-specific developments is driving Lucid’s stock lower. The recent release of economic data has fueled investor concerns about growth prospects, contributing to market-wide volatility.
On Thursday, Walmart (NYSE: WMT) released conservative guidance for annual sales growth, forecasting a modest 3.5% increase. This conservative outlook sparked a sell-off across the market, raising concerns about economic momentum. The selling pressure has only intensified following weak economic indicators released earlier today.
The University of Michigan’s latest consumer confidence survey suggests growing anxiety about inflation, potentially fueled by the prospect of new tariffs. Meanwhile, fresh data from S&P Global shows worsening conditions in key economic sectors. The S&P Global Manufacturing Purchasing Managers’ Index (PMI) fell short of expectations at 51.6, compared to the previously estimated 52.8. Even more concerning, the PMI for the service sector plunged to 49.7, missing economist projections and signaling contraction. These factors collectively heighten concerns about economic resilience and consumer spending, both of which are critical for high-growth companies like Lucid.
Rivian’s Guidance Raises Industry-Wide Concerns
Adding to Lucid’s woes, rival EV maker Rivian (NASDAQ: RIVN) recently provided guidance that suggests a tough road ahead for the industry. While Rivian’s fourth-quarter results exceeded Wall Street expectations—posting a loss of $0.70 per share on revenue of $1.73 billion, beating estimates for a $0.77 per-share loss on $1.43 billion in revenue—the company’s outlook has raised alarms.
Rivian has projected vehicle deliveries between 46,000 and 51,000 for 2025, slightly below its 2024 total of 51,579 units. This cautious guidance hints at potential demand slowdowns across the EV sector. For Lucid, which lags Rivian in production scale and efficiency, a cooling market could present even greater challenges.
Lucid’s Long Road to Profitability
Unlike Rivian, Lucid is still in the early stages of ramping up production and is far from achieving economies of scale. The company’s production figures remain significantly lower, making it harder to reduce costs and improve margins. A softening demand environment could exacerbate Lucid’s cash burn and delay its path to profitability.
Investors are increasingly wary of Lucid’s ability to navigate the current economic climate and carve out a sustainable niche in the EV market. As macroeconomic uncertainty lingers and industry growth expectations moderate, Lucid’s stock remains under significant pressure.
