Lucid Group Shares Plummet Following Significant Analyst Downgrade

NEWARK, N.J. — Shares of Lucid Group fell below $3 on Monday, prompting a steep decline of 10% by 2:30 p.m. ET. The significant drop in stock value was triggered by an analyst downgrade from Redburn Atlantic, leading to increased investor concern.

Analyst Tobias Beith downgraded Lucid’s stock from neutral to sell and lowered the price target from $3.50 to $1.13 per share, a reduction of 63% from the electric vehicle maker’s Friday closing price. Despite acknowledging Lucid’s efficiency in its electric vehicles, Beith highlighted the necessity for massive cash infusion to scale up production, particularly for its upcoming mid-size platform set to launch next year.

Beith expressed concerns about Lucid’s financial viability, predicting significant cash outflows, amounting to billions between 2025 and 2030. The analyst cited the company’s limited manufacturing capacity and high production costs as additional factors contributing to his negative outlook.

As investors brace for Lucid’s fourth-quarter reports and 2024 guidance due after Tuesday’s market close, previous production figures offered a mixed picture. Earlier reports indicated that Lucid produced 3,386 vehicles and delivered 3,099 in the fourth quarter, marking a notable increase from the previous quarter. However, the company faced a considerable loss in its third quarter, primarily attributed to write-downs and other non-operating expenses.

The forthcoming financial results are pivotal for Lucid, as they could significantly influence the company’s stock trajectory amidst growing concerns over its financial sustainability. Additionally, the firm anticipates that revenue will boost from its Gravity SUV, though analysts remain cautious of rising losses and cash burn rates.

“The numbers reported on Tuesday and management’s outlook for 2025 will be critical in shaping investor sentiment and determining Lucid’s stock price movement in the coming weeks,” noted Beith.