Why Lucid Stock Sank Today
Key Points
Morgan Stanley's new automotive analyst says to sell Lucid shares.
He recommended investors continue to hold shares of Lucid's EV peers.
Lucid faces an uphill battle as EV sales slump.
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Lucid Group (NASDAQ: LCID) is at a critical inflection point for its business. The electric vehicle (EV) maker began ramping up full customer shipments of its fully electric Gravity SUV this year. That's a critical product to help Lucid expand its customer base.
Investors have been either skeptical or unwilling to wait, as Lucid stock has dropped almost 60% this year. That plunge continued today with shares down 7.2% as of 10:45 a.m. ET.
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Image source: Lucid Group.
Lucid's price target lowered
Lucid's stock price dropped further today after Morgan Stanley cut the EV maker's price target and lowered its rating on the shares. The firm's new automotive analyst, Andrew Percoco, also downgraded EV peers Tesla and Rivian Automotive, but recommended investors continue to hold those stocks, according to Barron's.
Percoco lowered his firm's price target on Lucid to $10. Lucid's closing price on Friday was $13.42 per share. The analyst cited the Trump administration's removal of the $7,500 federal EV purchase tax credit as a reason EV sales will continue to slump into 2026.
Lucid just doesn't have nearly enough sales volume to approach profitability at this point. Its launch of the Gravity SUV was the first model beyond its luxury Air sedan, and sales have improved with the Gravity offering. Deliveries rose nearly 50% year over year in Q3, but that was still only a bit over 4,000 vehicles.
If EV sales continue to face headwinds, as Percoco suggests, Lucid stock will likely follow suit.
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Howard Smith has positions in Lucid Group, Rivian Automotive, and Tesla. The Motley Fool has positions in and recommends Tesla. The Motley Fool has a disclosure policy.
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