Better EV Stock: Lucid vs. Tesla

Source The Motley Fool

Tesla (NASDAQ: TSLA) has been the role model for a host of electric vehicle (EV) start-ups. The reason is pretty clear, given that it has successfully traveled the path from a start-up with no product all the way to a full-fledged automaker competing, very competently, with the larger legacy brands. But is it worth buying Tesla or a company attempting to follow in its footsteps, like Lucid Group (NASDAQ: LCID)?

What has Tesla achieved?

From a big-picture perspective, Tesla has gone from a money-losing start-up to a sustainably profitable business. That's not a small task when you consider that it is building vehicles in a capital-intensive industry that is fiercely competitive. It was not a quick or easy path, and Tesla's business spans more than just making cars. However, today, it is one of the most important and closely watched automakers in the world.

Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Learn More »

A Tesla building with tesla logo and two teslas in front.

Image source: Tesla.

One of the key numbers to consider when comparing Tesla to other electric car companies is its production and sales results. In the first quarter of 2025, it produced 362,615 EVs and sold 336,681. Those numbers are a fraction of what the legacy automakers produce and sell, noting that Ford sold 501,291 vehicles in the first quarter of 2025. However, it only sold 73,263 EVs (combining pure EVs and hybrid vehicles).

All in, Tesla is an industry heavyweight in a segment of the auto sector that is likely to see material growth for years to come. Noting that Ford and most of the other major legacy automakers are building EVs, too, pushed into it by Tesla's success, how much room is there for other pure-play EV makers?

Where is Lucid at in its development?

This is where a look at Lucid's production comes in. In the first quarter of 2025, Lucid produced 2,212 vehicles in its U.S. facility, with around 600 additional vehicles "in transit to Saudi Arabia for final assembly." It sold 3,109 vehicles in the quarter. Lucid is nowhere near Tesla when it comes to the development of its business. In fact, it hopes to produce only 20,000 vehicles in 2025, which is just a drop in the bucket compared to what Tesla made in the first quarter alone.

The distance that Lucid has to go before it is anywhere near Tesla is further highlighted by Lucid's financial results. In 2024, the company generated revenue of a little over $800 million from selling EVs. Building those EVs cost $1.7 billion. Then there are other costs to consider, like the nearly $1.2 billion in R&D spending and the SG&A expense of $900 million. Lucid is losing money hand over fist, and it is only appropriate for aggressive investors.

The thing is, a start-up losing money is pretty normal. The reason to buy Lucid is because you believe it could eventually grow into a company more akin to what Tesla is today. That's possible, but it won't be easy, and it won't happen quickly. So, only aggressive investors willing to make a long-term commitment should be considering Lucid over Tesla today.

Is Tesla a better buy?

However, there's a small problem with saying that Tesla has a better business than Lucid right now. That doesn't actually speak to whether or not Tesla's stock is worth buying. A steep sell-off has materially reduced Tesla's valuation, but it still has a price-to-earnings ratio of 116x versus mid-single digits for competitors like Ford. Tesla isn't just a carmaker, so some premium might be justified. However, the price-to-earnings (P/E) ratio is massively out of line with legacy automakers, and it is even kind of high for a technology stock, with the average tech sector P/E at something closer to 33x.

All in, conservative investors probably won't find Tesla or Lucid very attractive. If you find Tesla's business more attractive because it is further along in its development as a company and more diversified, you have to buy it while understanding that the stock is being afforded a high valuation.

Don’t miss this second chance at a potentially lucrative opportunity

Ever feel like you missed the boat in buying the most successful stocks? Then you’ll want to hear this.

On rare occasions, our expert team of analysts issues a “Double Down” stock recommendation for companies that they think are about to pop. If you’re worried you’ve already missed your chance to invest, now is the best time to buy before it’s too late. And the numbers speak for themselves:

  • Nvidia: if you invested $1,000 when we doubled down in 2009, you’d have $276,000!*
  • Apple: if you invested $1,000 when we doubled down in 2008, you’d have $39,505!*
  • Netflix: if you invested $1,000 when we doubled down in 2004, you’d have $591,533!*

Right now, we’re issuing “Double Down” alerts for three incredible companies, available when you join Stock Advisor, and there may not be another chance like this anytime soon.

See the 3 stocks »

*Stock Advisor returns as of April 21, 2025

Reuben Gregg Brewer has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Tesla. The Motley Fool has a disclosure policy.

Disclaimer: For information purposes only. Past performance is not indicative of future results.
placeholder
Solana (SOL) Faces Continued Downside Risk—More Losses LikelySolana started a fresh decline from the $155 zone. SOL price is now consolidating near $145 and might extend losses below the $142 support.
Author  NewsBTC
May 06, Tue
Solana started a fresh decline from the $155 zone. SOL price is now consolidating near $145 and might extend losses below the $142 support.
placeholder
Analysts Highlight 4 Reasons Why ETH Price Could Rebound Strongly in MayEthereum (ETH) has declined for five consecutive months. However, it enters May with rising optimism.
Author  Beincrypto
May 07, Wed
Ethereum (ETH) has declined for five consecutive months. However, it enters May with rising optimism.
placeholder
Ethereum Price Ready to Surge—$2,000 Level Could Be Within ReachEthereum price started a fresh increase above the $1,800 zone. ETH is now rising and attempting a move above the $1,850 resistance. Ethereum started a fresh recovery wave above the $1,820 resistance.
Author  NewsBTC
Yesterday 03: 39
Ethereum price started a fresh increase above the $1,800 zone. ETH is now rising and attempting a move above the $1,850 resistance. Ethereum started a fresh recovery wave above the $1,820 resistance.
placeholder
Sui Price Forecast: SUI bulls aim for 15% gains as open interest and bullish bets increase among tradersSui (SUI) price extends recent gains, soaring10% higher at the time of writing on Thursday and approaching its key resistance level at $3.65.
Author  FXStreet
21 hours ago
Sui (SUI) price extends recent gains, soaring10% higher at the time of writing on Thursday and approaching its key resistance level at $3.65.
placeholder
Ethereum To ‘Witness Big Breakout’ In The Next Two Weeks If This Level HoldsAs price continues to trade sideways, Ethereum (ETH) has reclaimed a crucial level, which could kickstart a breakout toward the $2,100 resistance.
Author  NewsBTC
21 hours ago
As price continues to trade sideways, Ethereum (ETH) has reclaimed a crucial level, which could kickstart a breakout toward the $2,100 resistance.
goTop
quote