Lucid Group (NASDAQ: $LCID), the luxury electric vehicle maker, saw its shares drop about 5% following its latest quarterly earnings release. The decline happened despite the company beating revenue forecasts and outlining production growth for the year ahead.
This reaction shows ongoing investor concerns in the EV sector, where top-line progress often gets overshadowed by persistent losses and execution hurdles. The stock has struggled for years, now trading well below $10 and down over 98% from its peak levels.
Strong Revenue and Delivery Growth
For the fourth quarter of 2025, Lucid reported revenue of $522.7 million. This marked a 123% increase from the same period a year earlier and comfortably exceeded analyst expectations, which averaged around $445 million to $468 million depending on the source. The beat came from record vehicle deliveries of 5,345 units in the quarter, up 72% year-over-year, and full-year deliveries of 15,841 vehicles, a 55% rise from 2024.
The Gravity SUV played a major role in this performance, ramping up production and making up a significant portion of output. Annual revenue reached $1.354 billion, reflecting 68% growth for 2025 overall. These figures show Lucid making solid strides in scaling operations and gaining share in the luxury EV market, even amid supply chain issues and tariff pressures.
Widened Losses Raise Red Flags
Despite the revenue strength, profitability remained a pain point. The company posted a GAAP net loss of $814 million for the quarter, with a per-share loss of $3.62. This was wider than the expected loss of about $2.62 (or $2.49 in some consensus figures), missing estimates significantly. On an adjusted non-GAAP basis, the loss per share was $3.08, still below forecasts.
The larger loss stemmed partly from supply-chain disruptions, higher costs, inventory write-downs, and non-cash items like changes in the fair value of certain liabilities. Full-year net loss came in at around $2.7 billion, roughly flat with the prior year despite revenue growth. Free cash burn stayed high at $1.24 billion in the quarter and $3.8 billion for the year, reflecting heavy investments in production ramp-up and future platforms.
Lucid also announced a 12% reduction in its U.S. salaried workforce to boost efficiency and aim for better margins over time. Management highlighted cost discipline as a priority while scaling.
Upbeat Production Guidance for 2026
Lucid provided forward-looking targets that focused on growth. For 2026, the company guided vehicle production between 25,000 and 27,000 units. This suggests 40% to 51% growth from the revised 2025 full-year production of about 17,840 vehicles (adjusted due to internal validation processes).
Capital expenditures are expected in the $1.2 billion to $1.4 billion range, with liquidity at $4.6 billion providing runway into the first half of 2027. Most 2026 output will come from the Gravity SUV, with the upcoming midsize platform starting production later in the year and only limited robotaxi volumes. Management stressed prudent adjustments to production based on demand and supply conditions.
While the guidance shows confidence in expansion, some investors viewed the projected pace as slower than hoped, especially given past ambitions and ongoing macro challenges in EVs like shifting demand and incentive changes.
Why the Stock Dropped Despite Positives
The market reaction focused on the earnings miss and signs of continued cash burn rather than the revenue win or growth plans. In a tough EV environment, with competition intensifying and some buyers hesitant, the wider losses and high spending weighed heavily. The stock fell below $10 in trading, hitting levels near recent lows.
Broader concerns include dilution risks from potential future capital raises and execution challenges in scaling luxury EVs profitably. Lucid’s path to breakeven remains distant, even as unit costs improve and new models like Gravity gain traction. The drop reflects investor caution in a sector where many players face similar profitability pressures.
Broader Context for Lucid and EVs
Lucid continues to position itself as a premium EV leader with strong technology in range and performance. Partnerships, like those in robotaxi development, and expansions in manufacturing and sales footprint, add to long-term potential. However, the capital-intensive nature of the business and external headwinds like tariffs keep scrutiny high.
The recent results offer a mixed picture: clear progress in deliveries and revenue, but ongoing losses that test patience. If Lucid can hit its 2026 targets while narrowing the gap to profitability, sentiment could improve. For now, the stock’s slide serves as a reminder of the risks in high-growth EV plays during uncertain times.
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