Lucid Motors (NASDAQ: LCID) has been navigating turbulent waters following the recent U.S. presidential election, where Donald Trump’s win has created a cloud of uncertainty over the electric vehicle (EV) sector.
Lucid’s stock took a sharp dip on Wednesday, closing at $2.13, marking a -10.5% drop over the past five days. Investors are increasingly concerned that Trump’s return to the White House may lead to the rollback of government-supported EV rebates and tax incentives, which have been instrumental in driving demand for EVs.
However, despite these worries, Lucid shares have seen a notable rebound in pre-market trading, climbing 3.76% at the time of publication on Thursday.
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LCID stock volume surge signals something big
One noteworthy factor fueling optimism around Lucid today is a spike in trading volume. LCID’s volume is currently 261% above its 65-day average, suggesting heightened interest and activity that could be a precursor to a major announcement or shift in sentiment.
Some investors speculate that “something big” might be unfolding behind the scenes as anticipation builds ahead of the company’s third-quarter earnings report, scheduled to be released after the market closes today, November 7.
EV market concerns
Nevertheless, with Trump set to assume office in January, policy changes could create significant headwinds for EV companies like Lucid.
The Trump administration has been historically skeptical of green energy initiatives, and there’s growing concern among investors that federal incentives for EV purchases, such as tax credits and rebates, could be scrapped. This shift would not only dampen consumer demand but also pose challenges for smaller, emerging players like Lucid, which would find it even harder to compete against established giants like (NASDAQ: TSLA).
Tesla, in contrast, saw its stock surge by as much as 15% yesterday. While Lucid is grappling with investor jitters, Tesla’s strong brand, scale, and loyal customer base have provided a buffer against the current market turbulence.
Lucid car production
Lucid has already shared its third-quarter production and delivery numbers ahead of the full earnings report, revealing that it produced 1,805 vehicles and delivered 2,781. While these figures mark some progress, they also highlight the uphill battle Lucid faces in scaling production efficiently.
Currently, Lucid’s financials tell a challenging story: last quarter, the company reported a net loss of approximately $643.4 million on sales of around $200.6 million. The path to profitability remains long, and the company’s current cash burn rate raises questions about its sustainability without consistent financial support.
Saudi backing and fundraising efforts
On the financial front, Lucid has a significant lifeline in the form of Saudi Arabia’s Public Investment Fund (PIF), which recently invested in Lucid.
The Ayar Third investment company, an arm of the Saudi Sovereign fund, invested roughly $1 billion to purchase a large quantity of LCID shares, per a recent SEC Form 4 filing. Two transactions were executed — on October 30, 374,717,927 units of LCID stock were purchased at a price of $2.591 apiece. A single day later, on October 31, an additional 21,470,459 stocks were bought at the same price.
The first transaction was worth $970,894,148, while the second is valued at $55,629,959 — for a total of $1,026,524,107.
This strong backing provides Lucid with a crucial safety net, allowing it to weather near-term financial storms and pursue longer-term growth initiatives.
Additionally, Lucid has recently announced further stock sales, suggesting that the company is preparing to secure additional funding. While these fundraising efforts bolster Lucid’s cash reserves, the road to profitability and market stability remains distant.
