Lucid Group’s Bold 1-for-10 Reverse Stock Split: Is This the Game-Changer the EV Maker Needed?

Lucid Group just pulled the trigger on a dramatic 1-for-10 reverse stock split—a move that screams either desperation or genius. Wall Street's watching, but will it actually drive the electric vehicle maker out of the slump?

Reverse Splits: A Last Resort or Strategic Masterstroke?

Nobody does a reverse split for fun. It’s the corporate equivalent of folding a bad hand and hoping the next deal’s better. By consolidating shares, Lucid’s aiming to boost its per-share price—a classic move for companies flirting with delisting threats or trying to look more respectable to institutional investors.

But let’s be real—this doesn’t fix faulty batteries or sluggish sales. It’s financial engineering, not product innovation. Still, if it keeps the lights on long enough for the next EV boom, maybe it’s worth the gamble.

Will It Work? Or Is Lucid Just Rearranging Deck Chairs?

History hasn’t been kind to reverse splits. Most companies that go down this road keep sliding—but then again, most companies aren’t sitting on EV hype and Saudi money. If Lucid leverages this breather to ramp production or drop a surprise tech breakthrough, skeptics might eat their words.

Then again, if a stock’s fundamentals are weak, even a 1-for-100 split won’t save it. You can’t reverse-split your way to actual demand.

One thing’s certain: in the high-stakes EV arena, Lucid’s playing for keeps. This move isn’t just about compliance—it’s about buying time. And in a industry moving at lightning speed, sometimes that’s all you need.

Or as some finance trolls would say: 'When in doubt, reverse split it out.'

Trying to appeal to more shareholders

In a 1-for-10 reverse stock split, investors exchange every 10 shares they own in a company for one, bringing down the number of shares they own and raising a company's stock price.

Specifically, Lucid's outstanding shares fell from over 3.07 billion to 307.3 million. As of this writing, the stock price has changed from just over $2 per share to about $17.

Image source: Getty Images.

Management said it believes the reverse split "will allow the Company's common stock to be more attractive to a broader range of investors and other market participants." Other EV stocks likeandtrade at much higher share prices.

It's been a difficult year for the EV industry, as President Donald Trump's spending bill eliminated the $7,500 federal EV tax credit after Sept. 30. In the second quarter of the year, Lucid beat Wall Street estimates on adjusted earnings per share, but came up short on revenue, reporting only $259 million compared to $280 million in the same quarter one year ago. Lucid also lowered its guidance from producing 20,000 vehicles this year to a range of 18,000 to 20,000.

"I have never seen so many surprises within a year as this year," interim CEO Marc Winterhoff told CNBC. "So, all of those plans are still set up for where we were before, but we just want to be a little bit more cautious and, therefore, provide a range."

The company recently struck a partnership with, in which the ride-hailing giant will invest $300 million in Lucid while the EV maker will build robotaxis for Uber, as part of the company's push to deploy 20,000 robotaxis on its platform over the next six years.

Through the first six months of 2025, Lucid has seen its expenses jump. While operating income has improved significantly, the company is still generating sizable losses.

Not a real catalyst

Reverse stock splits are frequently viewed unfavorably by investors because they can signal that management doesn't necessarily think it can drive the stock higher on its own. And Lucid is expensive. Through the first half of 2025, the company grew revenue by over 32% from the same period last year but has a market cap of over $57 billion. So the stock trades at a huge multiple, even on a price-to-sales basis.

The EV landscape doesn't look like it will get more favorable anytime soon, as the TRUMP administration appears to have no interest in bolstering green energy. Meanwhile, consumers are losing incentive to buy EVs with the tax credit going away and the Trump administration's decision to halt the buildout of more EV charging stations, which experts see as crucial to making EVs more ubiquitous. Tesla CEO Elon Musk acknowledged on his most recent earnings call that there could be a few tough quarters ahead.

Given all of this and Lucid's expensive valuation, I doubt the reverse split will serve as a catalyst, and I WOULD avoid the stock at these multiples.