Despite Production Guidance, Lucid Still Has a Long Road Ahead

One of the frustrating things about investing in companies is that even when they're making progress toward their goals, the results may not happen fast enough. Unfortunately, I think that's what's happening with Lucid (NASDAQ: LCID) and its goal of increasing vehicle production to between 25,000 to 27,000 vehicles this year.

While the company saw impressive production gains in 2025, the current year's guidance represents a slowdown in growth. And it comes as the electric vehicle (EV) industry is in a tough spot.

Image source: Lucid.

Lucid is making some progress with its vehicle production

Lucid recently reported its 2025 production, which nearly doubled from the previous year to 17,840 vehicles. Management has been working for years to ramp up manufacturing, which has been complicated the COVID-19 pandemic, tariffs, and flurry of management changes over the past several years. Lucid is on its second CEO since going public in 2019.

Management is guiding for a significant increase in production this year, though not as strong as last year, with production expected to rise between 40% and 51% and reach up to 27,000 vehicles. Lucid's CFO, Taoufiq Boussaid, noted that the most recent quarter saw a "step-change in production and unit economics," and that the progress it made will help create a "repeatable and stable operating cadence heading into 2026."

Lucid is on a rough road, and it's unclear what's around the bend

The company's production increase in 2025 and production guidance for this year may make it seem like it is on the right path. But I think investors should take a more critical look at what's happening with the company.

First, while Lucid expects to increase its vehicle production this year, it's far less than last year. Lucid nearly doubled production in 2025, but estimates it'll make just 51% more vehicles this year than last year. That's especially notable because Lucid made fewer than 18,000 vehicles last year. Not exactly an impressive amount and far below fellow EV start-up Rivian's production of 42,284 cars.

What's more, the production guidance looks even more disappointing considering that Lucid will begin building a new mid-sized EV that later this year. The new model will start at just under $50,000 and could eventually play an important part in helping Lucid appeal to more budget-conscious buyers. Lucid's interim CEO Marc Winterhoff said on the fourth-quarter earnings call that there won't be any "meaningful" production of its midsize vehicle this year. I think this makes Lucid's production estimates even more lackluster, considering the company will have three models in production -- versus two now -- and yet production growth will slow from last year.

And finally, Lucid and other automakers are facing a difficult consumer environment. Not only have the EV tax credits expired (of which Lucid benefited through a leasing loophole), but consumer demand for EVs is generally slowing down. A 2025 AAA poll found that just 16% of American car buyers said they were "likely" or "very likely" to buy an EV, the lowest level since 2019.

Americans are also unenthusiastic about the economy, with a recent Pew Research survey showing that 72% of Americans say recent economic conditions are "fair" or "poor." Lucid can't single-handedly fix EV demand, and it can't do anything about Americans' pessimism about the economy, but they're serious problems for the luxury EV maker nonetheless, considering its cheapest vehicle starts at around $70,000 right now.

When you add all of the above together, I think it points to a difficult year ahead for Lucid. Current shareholders should expect volatility ahead, and potential investors should probably hold off on buying Lucid for now.

Chris Neiger has positions in Rivian Automotive. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.