Lucid Stock Jumped This Week, but Here's Why It Might Not Last

It's been an incredibly turbulent week for stocks in the electric vehicle (EV) sector and for markets in general. As of early Friday morning, the Nasdaq Composite index was 5.4% higher for the week mainly thanks to Wednesday's historic rally.

Shares of EV maker Lucid Group (NASDAQ: LCID) were doing even better, surging by 10.5%, according to data provided by S&P Global Market Intelligence. Those gains have come partly because of struggles at EV leader Tesla. Investors should be aware of something that could cause issues for Lucid in the near future, though.

Start Your Mornings Smarter! Wake up with Breakfast news in your inbox every market day. Sign Up For Free »

Lucid moves into SUVs

Lucid recently began selling its Gravity SUV and reports say that orders have picked up recently. Interest may have increased thanks to consumers' displeasure with Tesla CEO Elon Musk and his political activity. "We see a clear uptick of interest in Lucid from Tesla buyers, because they're looking for another option," Lucid's interim CEO, Marc Winterhoff, recently told Yahoo! Finance.

The company is planning to expand production, too. It just announced plans to acquire additional manufacturing facilities from bankrupt electric heavy truck maker Nikola, subject to bankruptcy court approval.

Competition moving into one market

Lucid also has been actively working to be the EV leader in the Saudi Arabian market. The Saudi government is the largest Lucid shareholder via its sovereign wealth fund, the Public Investment Fund (PIF). Lucid ships vehicles to that country for final assembly and sale. In the first quarter, that amounted to over 600 vehicles.

Now, rival Tesla is moving into the Saudi market, too. Tesla held a launch event in Saudi Arabia with the opening of its first showroom and service center in Riyadh this week. That could mean Lucid's growth plans there will take a hit.

The future is still uncertain for Lucid. It continues to lose money, and is counting on its Gravity SUV to spur higher sales volumes. Investors should keep that in mind, as it likely will mean volatility in the stock will continue, and possibly erase this week's big gain.

Should you invest $1,000 in Lucid Group right now?

Before you buy stock in Lucid Group, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Lucid Group wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $496,779!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $659,306!*

Now, it’s worth noting Stock Advisor’s total average return is 787% — a market-crushing outperformance compared to 152% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.

See the 10 stocks »

*Stock Advisor returns as of April 10, 2025

Howard Smith has positions in Lucid Group, Nikola, and Tesla. The Motley Fool has positions in and recommends Tesla. The Motley Fool has a disclosure policy.