Lucid Group Executes Reverse Stock Split Amidst Market Volatility

MENLO PARK, California — Electric vehicle maker Lucid Group plans to conduct a 1-for-10 reverse stock split on Friday, August 29, at 5 p.m. Eastern Time. This measure comes as Lucid’s stock price has dipped to around $2, down over 30% since the announcement of the split in mid-July.

The reverse split will exchange 10 existing shares for one new share, effectively raising the trading price to approximately $20. Lucid’s board aims to improve the market perception of the stock among institutional investors, who often shy away from low-priced shares. Presently, Lucid has a market cap of $6.3 billion amid turbulent market conditions.

“The Board believes that a reduction in the number of outstanding shares, coupled with an increase in the per-share price, would enhance the market perception of our common stock,” Lucid stated in a recent filing. This strategy is intended to make Lucid’s shares more appealing and accessible to larger investors.

Despite the reverse stock split being a common approach for companies facing declining stock prices, Lucid’s situation is somewhat different. The company still has $3.6 billion in cash reserves, which it claims is sufficient to support operations through 2026. Additionally, the firm’s plans to increase production of its Gravity luxury SUV may potentially turn investor sentiment positive, even in a challenging market for electric vehicles.

However, there are risks associated with the split. Stocks undergoing reverse splits can often face downward price pressure. Historical data suggest that shares tend to fall soon after such events.

“Investors may want to wait until after the reverse split to buy shares,” said John Rosevear, a senior analyst at The Motley Fool. “The current market environment may lead to increased volatility.”

Lucid has faced criticism for its production numbers, having revised down its production forecast to between 18,000 and 20,000 vehicles for the remainder of 2025. Moreover, external factors affecting the EV market may further complicate recovery efforts.

As Lucid Group moves forward with its ambitious production plans amid a shifting landscape for electric vehicles, its reverse stock split could provide short-term relief but won’t automatically resolve underlying challenges.