Shares have performed surprisingly poorly in 2025.It's generally a bad idea to catch a falling knife, because it can cut you on the way down. Investors in Lucid Group (LCID 5.62%) learned this the hard way. Shares in the embattled electric vehicle (EV) start-up have fallen by a whopping 87% since hitting the market in 2021. And this trend has intensified this year, with shares losing 57% of their value in 2025 alone. It isn't hard to see why Lucid is shedding value. The company is burning through cash, and ...

Core Insights - Lucid Group has potential as a high-growth stock with a market cap of $6.5 billion and a strong position in the electric vehicle (EV) market, but its shares have declined by 78% since its market debut in 2021 [1] Business Performance - In Q1, Lucid's revenue increased by 36% year over year to $235 million, driven by a 58% rise in vehicle deliveries to 3,109 units; however, this is still below the peak revenue of $257.7 million in Q4 2022 [2] - The company has faced stagnation for nearly two and a half years despite having received industry awards for its vehicle quality [4] Industry Context - The broader automotive industry is experiencing challenges, with major players like Ford and General Motors incurring significant losses in their EV segments; Tesla's net income also fell by 71% to $409 million in Q1 [5] - Tesla has lost market share, particularly in the EU where sales dropped by 37% year over year, while the U.S. market has seen a smaller decline of 8.6% [7] Legislative Environment - Proposed legislation by Republicans could end the $7,500 tax credit for EV buyers, potentially impacting demand; however, it may also create advantages for smaller EV manufacturers like Lucid [9] - The retention of buyer incentives could provide Lucid with a competitive edge, especially as it plans to launch a new low-cost SUV, the Lucid Earth, expected to start at $50,000 in late 2026 [10] Future Outlook - Lucid stock has multibagger potential if it can overcome its current challenges and achieve sustainable revenue and profit growth; Tesla's recent difficulties and potential government support could facilitate this transition [11]