At the start of 2025, I issued a clear warning to investors: don’t buy Lucid stock.
My message was simple — despite the hype surrounding electric vehicles (EVs) and despite my admiration for Lucid’s products, the industry was under immense pressure, valuations across the sector were stretched, and Lucid’s own unit economics and trajectory did not justify its price.
That call proved prescient. Year-to-date, Lucid stock has fallen more than 30%. If you heeded that recommendation and stayed on the sidelines, you’ve saved yourself some painful losses.
Yet now, with the stock trading near $2 per share — down more than 90% from its 2021 highs — the question naturally arises: is it finally time to buy the dip?
Today, I’ll take you through an updated look at Lucid’s business performance, its progress so far in 2025, the catalysts on the horizon, and my proprietary discounted cash flow (DCF) valuation to determine if the stock is a buy, hold, or sell at current levels.
A Favorite Car, A Flawed Stock
Let me start with this: I really do like Lucid as a company.
The Lucid Air remains, in my opinion, the most beautiful and advanced electric sedan on the road. The recently launched Lucid Gravity SUV looks just as stunning, and it’s clear the company is capable of producing cars that rival or exceed Tesla’s in terms of design and technology.
So my cautious stance on the stock is not rooted in any dislike of the brand or its mission — quite the contrary. I’d love to see more Lucids on U.S. highways, because they are genuinely gorgeous vehicles with cutting-edge engineering.
But as investors, we have to separate what we admire about a product from the reality of a company’s financial health. Unfortunately, despite incremental progress, Lucid remains a company hemorrhaging money, lagging production targets, and funding its operations by issuing massive amounts of new shares — at shareholders’ expense.
Q1 2025: Signs of Growth, But Not Enough
In its most recent investor update, Lucid reported Q1 revenue of $235 million, an improvement over $173 million a year earlier. Deliveries totaled 3,219 vehicles for the quarter, and management reaffirmed its goal of producing 20,000 vehicles in 2025 — roughly double its 2024 output.
The main growth driver is the long-awaited Lucid Gravity SUV, which finally began appearing in customer driveways and showrooms this year. SUVs dominate U.S. automotive sales, and consumer preference for SUVs over sedans makes the Gravity launch pivotal to Lucid’s future.
As a car enthusiast and an investor, I have to say — the Gravity does not disappoint. It retains the sleek lines and minimalist interior of the Air sedan, while offering the size and utility Americans crave.
It’s also worth noting that in 2025, Lucid finally added a vehicle to its lineup after relying solely on the Air since 2021. That diversification is an essential step toward growing its total addressable market (TAM) and competing effectively.
The Good News: SUVs, Legislation, and a Broader Market
Beyond the Gravity’s arrival, Lucid is also likely to benefit from a potential change in U.S. EV policy. Proposed legislation now circulating in Congress would repeal the federal EV tax credit of $7,500, which currently benefits rivals like Tesla but not Lucid (whose vehicles are too expensive to qualify).
If enacted, this would help close the pricing gap between Lucid’s luxury models and Tesla’s mass-market offerings, making Lucid’s vehicles relatively more competitive.
Additionally, management has stated plans to bring a lower-priced model to market in the coming years, which — if executed — would further broaden Lucid’s TAM and improve affordability.
So yes, there are clear signs of progress. But investors should also temper expectations.
The Bad News: Heavy Losses, Weak Scale, and Dilution
Despite these positive developments, Lucid’s financial performance remains deeply troubling.
In Q1, Lucid reported an operating loss of $692 million, slightly improved from a $730 million loss in the year-ago quarter — but still staggeringly high relative to its revenue base.
Here’s the brutal math: even if Lucid doubles production in 2025 as planned, it still won’t come close to breakeven. The company simply isn’t operating at a scale large enough to absorb its fixed costs.
Lucid’s vehicles remain among the most expensive EVs on the market, with starting prices close to $100,000 — far above the average U.S. car price, even for luxury buyers. Without access to the EV tax credit, and without significant cost reductions, it’s hard to see how Lucid can meaningfully increase volumes in the near term.
To fund its operations, Lucid continues issuing massive amounts of stock. Over the past year, its outstanding share count has ballooned from 2.3 billion to 3 billion shares, and further dilution is almost inevitable.
This persistent dilution not only pressures the stock price, but also diminishes the value of each existing share. Investors should expect this trend to continue for at least several more years.
My Proprietary DCF: Still Overvalued
Using my proprietary DCF model, I’ve updated my projections based on the latest data. Here’s what I currently forecast for Lucid’s free cash flow:
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2025: -$3.5 billion
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2026: -$2.9 billion
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2027: -$2.0 billion
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2028: -$380 million
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2030: breakeven
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2031: +$250 million
Even under these optimistic assumptions — which presume steady improvement and no major execution failures — Lucid wouldn’t generate positive free cash flow until the next decade.
Discounting these future cash flows back to present value, I arrive at an estimated fair value of $1.30 per share.
Even after its steep decline, the stock still trades above my calculated intrinsic value. This underscores just how severely overvalued Lucid was at its 2021 peak — and just how much further it may have to fall to reflect its true fundamentals.
Why I’m Reiterating a Hold
So where does that leave us?
On the one hand, Lucid is making progress. Deliveries are increasing, the Gravity SUV opens up a lucrative segment, proposed EV policy changes could level the playing field, and management continues to focus on expanding its lineup and TAM.
On the other hand, the company remains deeply unprofitable, its operating losses are staggering, dilution is relentless, and the path to sustainable profitability remains years away.
For long-term investors already holding shares, I recommend holding — not selling in a panic at these depressed levels. There’s still potential here if management executes well and demand picks up for the Gravity.
But for new investors, I cannot recommend buying at today’s price. Despite the drop, Lucid remains overvalued relative to its fundamentals, and there are better opportunities elsewhere.
Key Takeaways
Here are the key points to remember:
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Lucid stock is down more than 30% year-to-date, vindicating my January 2025 warning.
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Q1 2025 showed progress, with revenue rising to $235 million and deliveries topping 3,200.
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The Gravity SUV is a positive catalyst, opening up the high-demand SUV segment.
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Massive losses ($692M in Q1), weak scale, and persistent dilution continue to weigh on the stock. My DCF model values the stock at ~$1.30 per share, below its current ~$2 market price.
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I’m reiterating a Hold rating as of June 30, 2025.
Final Thoughts: Beautiful Cars, Brutal Economics
Lucid is one of the most fascinating stories in the EV space. Its vehicles are stunning, its technology is impressive, and its brand has tremendous potential.
But investors must remain realistic. Even with a doubling of production in 2025, Lucid remains years away from achieving scale and profitability. Its dependence on capital markets and relentless dilution are major risks that cannot be ignored.
I’m rooting for Lucid to succeed. I hope to see more Gravity SUVs and Air sedans on U.S. roads in the years ahead. But as an investor, I have to be disciplined. At its current price, Lucid still doesn’t offer an attractive risk/reward profile.
So for now: Hold.
I’ll continue to monitor developments closely, especially around Gravity sales, lower-priced model plans, and legislation affecting EV tax credits. If the story improves meaningfully, I’ll update my recommendation accordingly.
Until then, caution remains the best course of action.
Disclaimer: I want to make it clear that I am not a financial advisor, and nothing I say is intended to be a recommendation to buy or sell any financial instrument. Additionally, it's important to remember that there are no guarantees or certainties in trading or investing, and you should never invest money that you can't afford to lose.
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