Lucid stock has bounced back this month. It moved from a low of $15 to $24, its highest since August 5. But it is still about 28 percent below its peak in 2024. Here’s why the stock jumped and why it could still fall.
The stock jumped after Uber invested $300 million in Lucid, making Uber the company’s second-biggest investor after Saudi Arabia’s PIC. Uber also announced it will buy thousands of Lucid Gravity vehicles. Saudi Arabia has already promised to buy 100,000 cars over the next few years. Investors see this as a boost for future sales, pushing the stock higher.
Lucid still faces significant risk!
Despite this, Lucid faces serious risks. The $7,500 tax credit for electric vehicles was recently ended. This means fewer incentives for buyers and slower revenue growth. Analysts expect revenue to rise by 89 percent in Q3 to $378 million and by 94 percent in Q4 to $456 million. That would bring 2025 revenue to $2.5 billion, up from $1.3 billion this year. The growth is largely thanks to the Gravity launch and buyers rushing before the tax credit expired.
Another risk is the loss of emissions trading revenue. Lucid has not disclosed how much it will lose, but analysts think it could be substantial. For comparison, Rivian estimates losing over $600 million annually in high-margin revenue from emissions. Lucid is also unprofitable per vehicle. The recent quarterly results showed a net loss of $539 million, slightly better than $643 million previously. Free cash outflow, however, increased from $741 million to $1 billion.
Lucid has said it will run out of cash by the second half of 2026. The CEO stated they will need more funding before becoming profitable. The company has been highly dilutive, with shares rising from 20 million in 2021 to 307 million now, and this trend is expected to continue.
Technically, the stock has moved past key levels. It broke above $19.5, a resistance level tested multiple times this year. The price is now above the 50-day and 100-day averages. Indicators like RSI and MACD are pointing up.
Still, many investors expect the stock to pull back soon while the company raises more capital. If that happens, the next level to watch is the year-to-date low of $15.2.
