Cash Crisis Alert: This EV Maker’s Financial Collision Course Intensifies

Another electric vehicle manufacturer hits the financial skids—burning through cash reserves at an alarming rate while production targets remain elusive.

The Bleeding Continues

Quarter after quarter, the numbers tell the same story: mounting losses, shrinking liquidity, and delivery forecasts that consistently miss the mark. Factory output stalls while operational expenses accelerate—creating the perfect storm for financial implosion.

Investor Confidence Evaporates

Market sentiment turns increasingly bearish as short positions accumulate and institutional backing dwindles. The company's survival now hinges on either a massive capital injection or dramatic restructuring—neither guaranteed in today's volatile market conditions.

Remember when traditional automakers warned about EV profitability? Turns out they weren't just being conservative—they understood basic math while Silicon Valley chased valuation fantasies.

Image source: Getty Images.

Lackluster deliveries and a steady cash burn

Back in 2021 when Lucid Group went public, there were high expectations that the company could give EV market leadera run for its money in the U.S. EV market. Fast-forward five years later, and Tesla, despite its own challenges, continues to dominate domestically, with 43.1%, above beyond the market share of market incumbents and EV start-ups alike.

Not only has Lucid failed to become a Tesla killer, it has continued to struggle to scale up production and deliveries. Last quarter, Lucid delivered a total of 4,078 vehicles. That may have represented a nearly 47% increase in deliveries compared to the prior year's quarter, but there's a reason this figure wasn't cause for celebration.

Besides falling short of investor expectations, there's also the concern that EV buyers rushed to make purchases ahead of the Sept. 30, 2025, expiration of the U.S. EV tax credit. This may lead to fewer EV sales during this quarter and in the coming quarters.

Worse yet, with these growth challenges, profitability has remained elusive for Lucid. Cash burn is still very high. The company has yet to reveal Q3 2025 financials, but during the first six months of 2025 alone, net cash used in operating activities totaled $1.25 billion. With billions still flying out the door, Lucid remains in a constant need for additional cash.

The dilution cycle continues unabated

While cash burn remains a big problem for Lucid, the company has so far leaned on its deep-pocketed majority owner to keep the lights on. The Public Investment Fund (PIF) is a Saudi Arabian sovereign wealth fund. PIF currently owns more than 60% of Lucid, with the fund consistently increasing its position by being the purchaser of newly issued equity and debt from this company.

As Lucid's cash burn continues, you may expect PIF to soon cut another check, but here's where it gets interesting. While PIF was the lead participant in Lucid's convertible bond offering earlier this year, Lucid's latest funding has come from a different investor. In September,invested $300 million in the company.

While this funding is ostensibly for the development of Lucid-made robotaxis, perhaps it is a sign that PIF is walking back from making further significant investments in the company, requiring Lucid to seek out new funding sources.

Whatever the reason, don't expect this latest funding deal to be the last. On Sept. 26, Marc Winterhoff, Lucid's interim CEO, noted in an interview with the Financial Times that the company's cash position will only last until the second half of 2026. To extend its operational runway, Lucid will likely need to raise even more cash.

Should you buy Lucid stock?

For all its trouble, Lucid Group does have a major upcoming catalyst. Next year, it is slated to begin delivering its much-awaited Gravity SUV. Targeting a wider addressable market, if this model is a hit, it may get Lucid toward the scale it needs to attain consistent profitability.

However, while catalysts like the Gravity launch could increase Lucid's total value, further dilution could water it down on a per share basis. In other words, the impact of shareholder dilution could outweigh the upside from success or a possible route to profitability with the Gravity.

With this in mind, I WOULD take heed of the market's current bearish sentiment on Lucid stock by skipping it completely.