Lucid Motors (NASDAQ: LCID) has surged to a five-month high, trading at $3.495 on February 18, 2025, after gaining 8% on the day and an impressive 28% over the past week.
This marks a significant recovery from its multi-month lows, with LCID reaching levels not seen since September 2024.
The luxury electric vehicle (EV) maker has faced a turbulent journey since its 2021 IPO, struggling with missed production targets, financial losses, and ongoing investor concerns over stock dilution.
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What’s driving Lucid’s latest rally?
Lucid’s rally comes on the heels of stronger-than-expected Q4 production and delivery results, marking a rare bright spot for the EV maker.
The company reported 9,029 vehicles produced and 10,241 delivered in 2024, surpassing its 2023 figures and easing concerns about its ability to scale operations. This marks the first time Lucid has outpaced its own guidance since 2022, providing a much-needed confidence boost for investors betting on its long-term growth.
Momentum has also been driven by Lucid’s first electric SUV, the Gravity, a model anticipated to expand the company’s market presence and increase sales volumes.
The company is also enhancing its technology offerings, announcing the integration of Lucid Assistant, an AI-powered voice recognition system developed in partnership with SoundHound AI (NASDAQ: SOUN).
Lucid’s momentum is also benefiting from broader industry tailwinds. The EV market is projected to expand by 30% in 2025, with 15.1 million battery electric vehicles (BEVs) expected on the road, up from 11.6 million in 2024, according to S&P Global Mobility.
As the sector gains traction, investor optimism is spilling over into companies like Lucid, which are banking on an industry-wide recovery.
Ongoing hurdles and analyst outlook
Despite the recent price recovery, Lucid continues to face significant financial headwinds. The company reported a $992.5 million net loss in Q3 2024 on $200 million in revenue.
While the Saudi Public Investment Fund (PIF), Lucid’s largest stakeholder, continues to provide liquidity, the risk of further stock dilution remains a pressing concern. Moreover, Lucid’s high-end pricing limits its market reach as affordability becomes a growing focus in the EV sector.
Analysts see further upside for Lucid, with Benchmark analyst Mickey Legg initiating coverage with a ‘Buy’ rating and a $5 price target, implying a 47% upside from current levels. Legg expects domestic EV production to accelerate in 2025, with further growth in 2026 and 2027 as prices decline and charging infrastructure expands.
He sees Lucid as well-positioned to capture a share of this evolving market, citing its technology, financial backing, partnerships, and award-winning vehicles as key advantages.
Featured image via Shutterstock
