Beleaguered electric vehicle company Lucid Motors (LCID) said this week that its reverse stock split, which will consolidate shares to meet NASDAQ’s $1 minimum trading price, is not a move to avoid being delisted.
As of Friday, Lucid’s share price was down over 96% from its all-time high of $64.86, reached in February 2021. Its stock has dropped 48% since this time last year and 31% in 2025. One analyst changed their price target as much as 30% after the split was announced.
“LCID’s 2Q25 revenue modestly beat our forecast, while gross profit and adjusted EBITDA were below our projections,” Stifel analyst Stephen Gengaro wrote in a note to investors Friday explaining the cut to $2.10 from $3.“We continue to be big believers in LCID’s technology, and view the Air and Gravity as excellent products,” Gengaro wrote. “However, we expect additional capital to be required over the next few years, and we are awaiting clarity on Gravity sales and the rollout of the midsize.”
Wall Street media have met the stock plan with the theory that the move was an attempt to avoid delisting on the exchange, but on Monday the company pushed back against that.
“Our 1-for-10 reverse stock split was a mechanical step to broaden access for institutional investors and reduce trading volatility,” Nick Twork, vice president of communications, told Gizmodo. He added that any idea that it was to avoid being delisted was false.
Chief Financial Officer Taoufiq Boussaid has also said the move “is not a cosmetic action” on the company’s Q2 earnings call.
“This is a deliberate and targeted measure to ensure Lucid’s equity remains accessible to a broader universe of long-only institutional investors,” Boussaid said, according to Twork, who reposted the his explanation on X. “It also aligns our share price with the strategic trajectory of the company as we move into the next chapter of scaling our operations and deepening our capital markets engagement.”
What is Lucid’s long game?
Still, whatever purpose the the stock maneuver is for strategically, it does little to address the underlying issues plaguing the struggling electric vehicle maker.
Founded in 2014 by former Tesla (TSLA) engineer Peter Rawlinson, Lucid initially aimed to compete in the luxury EV segment with its flagship Air sedan, positioned as a premium rival to Tesla’s Model S.
It had ambitious production targets, initially aiming for 20,000 vehicles in 2022, then 49,000 in 2023, and 90,000 in 2024. But the company struggled to meet demand and in 2024, Lucid delivered just over 10,200 vehicles.
Lucid said 2025 has been a different matter, as the company has ramped up deliveries and production.
“In Q2 2025 Lucid delivered 3,309 vehicles and produced 3,863. For the first half of 2025 we delivered 6,418 and produced 6,075. Q2 deliveries rose 38% year-over-year and marked our sixth consecutive quarterly delivery record,” Twork said.
Lucid said the Lucid Air is the best-selling luxury EV sedan in North America for four consecutive quarters, outselling the Porsche Taycan, Tesla Model S, Audi e-tron GT, and Mercedes EQE/EQS. Those results prove sustained demand in the most competitive EV market in the world.
The company said that it is also bringing its production to scale.
“Lucid ended Q2 with approximately $4.86 billion in liquidity to fund the Gravity ramp, margin improvements, and our mid-size platform. Scaling an automaker at this pace requires significant capex and R&D, which is accounted for in the per-vehicle math,” Twork said.
The company’s financials highlight the scale of its challenges, with revenue rising 36% to $808 million in 2024 but net losses widening to $3.1 billion. That is a loss of around $299,000 per vehicle sold.
Lucid pushed back against that per-vehicle number, saying that the numbers instead show a company building out for growth and higher production capacity.
“Scaling an automaker at this pace requires significant capex and R&D, which is accounted for in the per-vehicle math,” Twork said. “To imply we ‘lose that much per vehicle’ distorts reality: most of the investment is for future growth, not current units. That growth includes rapidly scaling deliveries of the Lucid Gravity SUV in the second half of 2025 and building a second factory to launch our mid-size vehicle program, scheduled for production in late 2026.”
Lucid has been trying to stay in the game
Multiple price cuts for the Air sedan from around $80,000 to roughly $71,400 reflect ongoing efforts to stay competitive, but the company has limited room for price increases due to high manufacturing costs.
Despite having ample liquidity of about $4.8 billion and expanding manufacturing facilities in Arizona and Saudi Arabia, Lucid’s growth prospects remain uncertain. The company faces stiff competition from Tesla and other automakers, and its delayed launch of the more affordable Gravity SUV, a potential game-changer, has yet to materialize.
The company pointed to its backing by Saudi Arabia’s sovereign wealth fund as a sign of ongoing investor stability.
“Lucid benefits from the long-term, majority ownership and continued funding support of Saudi Arabia’s Public Investment Fund (PIF), one of the world’s largest and most stable investors,” Twork said.
Analysts forecast modest near-term growth, with 2025 revenue expected to reach $1.3 billion, with a 61% increase, and losses projected to decline slightly.
However, even optimistic forecasts place Lucid’s market cap at just $6.4 billion, roughly five times its expected 2025 sales. In contrast, Tesla’s valuation remains over $1 trillion, with a price-to-sales ratio of around 12.
If Lucid can deliver on its growth plans, the stock has the potential to double or triple, if it achieves a valuation comparable to Tesla’s. For now, the reverse stock split provides a temporary reprieve, but investors should think about it carefully given the company’s volatile financials and stiff competition.
Will Lucid have a market for long?
Lucid Motors’ stock had a rough week, reflecting broader investor concerns about the future demand for electric vehicles (EVs) and overall market sentiment. The luxury EV maker’s shares fell sharply after analysts highlighted ongoing challenges in the industry, including increased competition, rising production costs, and moderating consumer interest.
Despite earlier excitement around Lucid’s technological innovations and plans to expand its luxury lineup, recent earnings reports and market data suggest that the company may be facing a more challenging environment than previously anticipated.
Persistent supply chain disruptions, combined with skepticism over EV adoption rates, are weighing on investor confidence.
For investors, Lucid’s recent decline, which has now reversed nearly all of its recent gains, signals heightened caution among shareholders in a fluctuating EV sector.
As automakers compete fiercely for market share, especially in the premium segment, Lucid’s future profitability remains under close scrutiny.