Motley Fool: Time to buy EV maker Lucid ahead of expected high sales

Lucid Group, a small-cap EV manufacturer competing with the likes of Elon Musk’s Tesla, is “entering its biggest multiyear growth sprint in its history,” the Motley Fool argues. The outlet sees this as an excellent opportunity to pick up shares while they remain relatively cheap. However, it notes that Lucid is suitable only for risk-tolerant, long-term investors.

In 2025, Lucid Group’s revenue is expected to grow at least 75%, based on Wall Street analysts’ forecasts. In 2026, the top-line growth could be even more substantial, writes the Motley Fool. Last year, Lucid’s revenue rose nearly 36% to $808.7 million.

Now could be a good time to buy the stock while it is still cheap, the article suggests. Since late 2023, Lucid shares have stayed below $5 apiece, and as of the close yesterday, May 21, they were trading at just $2.77 per share. 

Analysts’ upbeat projections are based on Lucid’s plans to expand its EV lineup. In mid-April, the company unveiled the Gravity SUV, effectively doubling its model range. In contrast, peers like Tesla and Rivian do not plan to release new models this year, according to the Motley Fool. Tesla is instead focusing on upgrading the Model Y, one of its bestsellers.

Lucid has also promised to launch three new mass-market vehicles in 2026. “The best thing an EV maker can do is get mass market models on the road,” the Motley Fool argues. In the U.S., competition in that segment is limited: Rivian has no mass-market models, and Tesla offers only two vehicles priced under $50,000 — the Model 3 and Model Y. Together, they accounted for nearly all of Tesla’s 2024 sales, at 1.7 million out of 1.8 million.

More than 30 EV startups have gone bankrupt in the past decade, the Motley Fool reminds readers. In February, electric and hydrogen truck maker Nikola, having set its sights on becoming the “Tesla of heavy trucks,” filed for bankruptcy. 

Launching an EV from scratch requires massive capital investments, and Lucid, as of March 31, had $1.85 billion in cash and equivalents. Meanwhile, its net loss for the first quarter stood at $366 million.

To raise funds, Lucid has been selling stock. For example, in October, it sold 262.4 million shares in the market (excluding the underwriter's option). In addition, its majority shareholder, Ayar Third Investment Company of Saudi Arabia, agreed to purchase an additional 374.7 million shares. This brought the total capital raise to around $1.6 billion.

The biggest risk for Lucid now is that it might run out of cash before its mass-market models reach the market, even though it is those models that could unlock its long-term potential. Even if the company succeeds in raising new capital, existing shareholders risk significant dilution, the Motley Fool warns.

According to MarketWatch, 11 out of the 18 Wall Street analysts covering the company rate the stock as a “hold.” Four rate it a “sell,” and only three a “buy.” The average target price is $2.89 per share, just over 4% above current quotes.