TLDR:
- Lucid delivered a record 3,109 vehicles in Q1 2025, its highest quarterly total ever
- Stock fell 5.8% despite the delivery milestone as investors focused on other concerns
- Company announced plans to raise $1 billion in convertible debt due in 2030
- Q1 revenue guidance of $234 million fell short of Wall Street’s $250 million expectations
- New tariffs on imported auto parts and recent CEO transition added to investor uncertainty
Lucid Group’s stock stumbled in early April trading despite the EV maker reporting its best-ever quarterly deliveries. The company announced it had delivered 3,109 vehicles in the first quarter of 2025, marking a record high for the young electric vehicle manufacturer.
Yet investors seemed unimpressed. Shares dropped 5.8% during mid-day trading on Friday, with the stock trading as low as $2.06 before settling at $2.19.
The mixed reaction highlights the complex challenges facing the luxury EV maker as it attempts to scale production while managing investor expectations.
Capital Needs Prompt Debt Offering
One major factor driving the stock decline was Lucid’s announcement of a $1 billion convertible debt offering. The company plans to issue 5% convertible senior notes due in 2030, with settlement expected around April 8.
While such capital raises are common for growing EV companies, they can dilute existing shareholders’ value. This particular move comes as Lucid burns through cash at a rapid pace.
The company ended 2024 with approximately $6.13 billion in total liquidity. Wall Street analysts estimate Lucid will use about $3.5 billion in 2025 alone to fund its operations and expansion plans.
This burn rate explains the need for additional capital, but it also raises questions about the company’s path to profitability.
Revenue Guidance Falls Short
Adding to investor concerns was Lucid’s first-quarter revenue guidance of approximately $234 million. This figure fell below Wall Street expectations of around $250 million.
The gap between record deliveries and weaker revenue guidance suggests potential pricing pressures or a less favorable mix of vehicle models sold during the quarter.
Neither scenario bodes well for the company’s margins, which are already under pressure as it attempts to scale production.
Tariff Worries Add Uncertainty
Perhaps the largest drag on the stock came from President Trump’s recent tariff announcement. While Lucid produces most of its vehicles in the United States, potentially avoiding the newly enacted 25% tariff on imported vehicles, the company still imports automotive parts.
These parts will be subject to similar tariffs next month, potentially increasing production costs and further squeezing margins.
The timing of this tariff news coincided with a management transition at Lucid. Founder Peter Rawlinson recently stepped aside as CEO, with Marc Winterhoff appointed to take his place.
Such leadership changes during challenging market conditions often create additional uncertainty for investors.
Analyst Sentiment Remains Cautious
Wall Street analysts have adopted a generally cautious stance toward Lucid. According to recent reports, the stock has two buy ratings, nine hold ratings, and two sell ratings, with an average price target of $2.69.
Several firms adjusted their outlooks in recent weeks. Stifel Nicolaus decreased its price objective from $3.50 to $3.00 while maintaining a hold rating. Meanwhile, Morgan Stanley upgraded Lucid from underweight to equal weight, setting a $3.00 price target.
Benchmark remains more optimistic, reiterating a buy rating with a $5.00 price target in early March.
The company currently has a market capitalization of approximately $7.43 billion, with financial metrics including a debt-to-equity ratio of 0.77, a quick ratio of 3.26, and a current ratio of 3.71.
Production Details Show Some Promise
Looking beyond the headline delivery numbers, Lucid produced 2,212 vehicles during the quarter and had an additional 600 vehicles in transit to Saudi Arabia for final assembly.
This production rate represents progress for a company that has struggled with manufacturing ramps in the past. However, it remains modest compared to larger EV competitors.
Investors will be closely watching Lucid’s upcoming earnings report on May 6. A key focus will be the company’s progress on the Gravity SUV, which is expected to provide a significant boost to deliveries and revenue when it reaches full production.
The Gravity represents Lucid’s second model line and an entry into the popular luxury SUV segment, potentially opening new market opportunities.
For long-term investors, the central question remains whether Lucid can achieve sufficient scale to become profitable before its cash reserves run too low.
The recent capital raise buys additional time, but the clock continues to tick as the company works to establish itself in the increasingly competitive electric vehicle market.
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