Lucid Group: A Spot of Bother, Perhaps?

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Now, Lucid Group, you see, burst upon the scene in 2021 with its Air – a rather dashing electric contraption, and for a fleeting moment, one dared to think that Tesla, that titan of the tarmac, might finally have met its match. A spot of competition, what!

The Air, you understand, was priced in a manner that didn’t entirely frighten the horses, competing admirably with Tesla’s Model S. And, most impressively, it actually beat both the Model S and a Bugatti Chiron in a quarter-mile dash – a feat of engineering, dashedly clever, what! Nine-point-one seconds, you know. The others trailed behind, tied at nine-point-three. A most sporting result.

The reviews, as they trickled in, suggested the Air was, in fact, the superior vehicle. Cheaper, faster, with a longer range, more room for one’s luggage, and a build quality that wouldn’t make a craftsman weep. One might have anticipated a veritable stampede towards the showrooms. And yet…

And yet, despite all this, Lucid hasn’t managed to unseat the electric vehicle king. It’s rather like watching a perfectly good croquet mallet attempt to dislodge a particularly stubborn boulder. The boulder, naturally, being Tesla. And, if we’re being perfectly frank, Lucid finds itself in a distinctly precarious financial position. The release of the Gravity SUV and a rather glamorous advertising campaign featuring a young man named Timothée Chalamet (directed by a fellow named James Mangold, if you please) haven’t exactly sent the share price soaring. A pity, really.

There’s simply too much risk, you see. A bit of a sticky wicket, as the chaps say.

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More Like a Lucid Predicament

Let’s begin with the mildly encouraging news, because it’s rather short on substance. In the latest reported quarter – the third of 2025, if you’re keeping score – revenue clocked in at $337 million, a respectable 68.5% increase over the same period last year. This was thanks to a 47% jump in new vehicle deliveries. Not bad, not bad at all.

However, and there’s always a ‘however’, isn’t there? – the company proceeded to burn through nearly half of its cash reserves. They began the year with a rather plump $5 billion, but by September 30th, they were down to $2.9 billion. Add to that $2.8 billion in debt (up a mere 2% year-over-year – a small mercy, perhaps), and the financial outlook becomes… less rosy. A touch gloomy, if we’re being honest.

It gets worse, naturally. Despite the $136 million increase in revenue, costs swelled by $257.7 million, swallowing the increase whole. Still, they managed to reduce net losses from $992.5 million to $978.4 million. A slight improvement, but hardly enough to warrant popping the champagne. They’re still hemorrhaging money, you see, albeit at a slightly slower rate.

Speaking of which, free cash flow losses deepened from -$622.5 million to a rather alarming -$955.5 million. Lucid is not only unprofitable, but it’s operating with a gross margin of -99.12%. One shudders to think. It’s like trying to fill a bathtub with a hole in the bottom.

Even Tesla, which had a rather wobbly 2025 itself, is still managing to turn a profit. A fact that is, shall we say, noteworthy.

All American electric vehicle manufacturers felt the pinch when the EV tax credit vanished last November. But while it’s a mere inconvenience for Tesla, it could prove fatal for Lucid. A bit of a blow, what!

The company is simply spending money it doesn’t have, and prospective customers in the United States now have less incentive to buy its cars. A rather unfortunate state of affairs.

You see, while the Air is priced lower than its Tesla equivalent, the Model S, the Gravity is significantly more expensive than the Model Y it competes with. And Lucid has no competitor to the $36,990 Model 3. A glaring omission, wouldn’t you agree?

So, there’s little incentive for a price-conscious consumer to consider Lucid, even after Tesla discontinues the Model S – something Elon Musk hinted might happen this year. Coupled with the company’s rapidly depleting cash and growing costs, Lucid isn’t shaping up to be a dream for your portfolio. A bit of a muddle, really.

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2026-02-04 06:32