Why Lucid Stock Plunged 14% This Week: The Shocking Truth Behind the Crash

Another week, another brutal reality check for EV investors.

Lucid Motors just joined the electric slide—straight downhill. Shares cratered about 14% in a punishing five-day stretch, leaving shareholders wondering what hit them.

No Earnings Magic Here

Let's be real: the company didn't suddenly discover a hidden cache of profitable tech. No surprise deliveries spike. No blockbuster partnership reveal. Just the same old story of burning cash and missing targets.

The Broader Market Bite

EV stocks collectively caught a cold—and Lucid pneumonia. Rising rates, supply chain snags, and that pesky little problem of actually making money in automotive manufacturing dragged down the entire sector. Because nothing says 'growth stock' like needing endless capital infusions just to stay alive.

When the Tide Rolls Out

High-risk, no-profit companies always get exposed when markets turn skeptical. Lucid's 14% drop isn't an anomaly—it's a correction. A reminder that valuation based on future dreams eventually collides with present-day math.

Another week, another lesson that Wall Street's patience for 'potential' has very, very clear limits.

Image source: Lucid Group.

Electric vehicle sales are dropping in the U.S.

The United States is Lucid's primary market. The EV Maker also sells its luxury electric sedan in Saudi Arabia in an arrangement with the Saudi government. The Saudi Arabian Public Investment Fund (PIF) is Lucid's largest shareholder with about 60% of its shares.

But Lucid needs U.S. sales to thrive. It has supplemented its Air sedan offering with the new, fully electric Gravity SUV. Lucid needs that product to boost sales. It's a tough environment, though. EV sales in the U.S. slumped 6.3% year over year in the second quarter. That comes amid growing competition as well.

Lucid's 1-for-10 reverse stock split went into effect this week. It doesn't change anything about the valuation of the company or the business itself. Investors recognize it as a sign of problems, though, and Lucid stock has dropped to a split-adjusted record low.

Investors considering the drop as an opportunity have to believe in the success of the Gravity SUV. Lucid has been successful in raising capital thus far, including a recently closed $300 million investment from rideshare company. But Lucid needs to begin generating much more revenue from the business. That will depend heavily on sales of the Gravity vehicle. Any sign that Gravity sales aren't meeting or beating expectations will mean more downside for Lucid stock.