Why Lucid Group Stock Crashed 33% in April

Shares of Lucid Group (NASDAQ: LCID) tanked 33.2% in April, according to data provided by S&P Global Market Intelligence.

A series of setbacks shook investor confidence in the electric vehicle (EV) maker, and all eyes are now on Lucid's next quarterly numbers, slated to be announced this evening of May 5.

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Why is Lucid stock struggling?

On April 3, Lucid announced that it had produced 5,500 EVs in the first quarter but had delivered only 3,093. Although the company clarified that the root cause was a supplier-related seat quality issue that disrupted deliveries for 29 days, investors remained skeptical about the impact on Lucid's revenue.

Those fears were confirmed on April 14 when Lucid announced preliminary first-quarter numbers alongside a major funding raise.

Lucid's projected Q1 revenue of $280 million-$284 million fell significantly short of estimates. It also expects to report a staggering operating loss of $985 million to a little over $1 billion for Q1 despite efforts to scale production.

At the same time, Lucid announced a $1.05 billion capital raise. That includes :

• $550 million from an affiliate of the Saudi Public Investment Fund (PIF), also a major stakeholder in Lucid
• $200 million from Uber Technologies (NYSE: UBER), an investor and partner
• $300 million stock offering

While funding from key investors provides the liquidity many EV makers lack, the dilution from issuing new shares typically pushes the stock price down. Moreover, the Saudi-backed funding comes via convertible preferred stock, which means it can be converted into common shares and further dilute existing shareholders' ownership stake in Lucid.

April 14, in fact, was a major trigger for Lucid stock's fall for more reasons than one. Aside from the fund rise and weak preliminary numbers, Lucid also announced a leadership change that day.

Silvio Napoli, the CEO of a Swiss company, will take over as Lucid's CEO, while interim CEO Marc Winteroff will resume his role as the chief operating officer.

Lucid believes Napoli will steer the company toward "growth, positive free cash flow, and profitability" as it scales production of the Gravity SUV and Air sedan, launches new midsize platform vehicles, and pursues new revenue streams such as from autonomy and robotaxis.

Uber has committed to purchasing at least 35,000 Lucid vehicles for its autonomous robotaxi service. The partnership, signed in 2025, originally included plans to deploy 20,000 Lucid EVs over the next six years.

Will Lucid stock surge after May 5?

Investors are losing patience with Lucid as its deep operating losses offer no clear path to profitability. The latest leadership change only adds to the overhang as investors hate instability at the top, especially for a company that's already struggling.

Lucid is about to release its first-quarter numbers after market close on May 5.

It's a crucial event, as investors want to know whether the gap between production and deliveries signals a deeper demand issue. What Lucid says could largely decide where the stock is headed from here. If management can demonstrate steady demand and tighter cost controls, it may help restore some confidence. Anything adverse, like weak demand and cash burn, could send Lucid stock even lower.

Neha Chamaria has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Uber Technologies. The Motley Fool has a disclosure policy.