By The Lucid Group stock price has plunged this year as concerns about the US electric vehicle industry remain. LCID was trading at $2.20 on Monday, down 35% from its July high and 40% below the year-to-date high.
Why Lucid Group stock price has crashed
The LCID share price has continued its strong downtrend this year as concerns about Donald Trump policies remained.
Trump has implemented sweeping tariffs this year in his bid to rebalance the huge trade deficits. Lucid’s vehicles are not directly impacted by these tariffs as it manufactures its vehicles in the United States.
However, its manufacturing has been impacted as it relies on imported inputs. In this regard, Trump has implemented sweeping tariffs on steel, aluminium, and copper, which are used widely in vehicle manufacturing.
The Lucid Group stock price has also plunged after the tweaks in the fuel economy standards. This is a key part of the American EV sector that lets companies pay them to offset their carbon emissions.
In a recent statement, Rivian, a top EV company, said that the relaxation of these rules would cost it $100 million in high-margin revenue. It is unclear how much Lucid makes on these, but they could be significant.
LCID slashed guidance
Lucid Group stock price also crashed because the recently passed Big Beautiful Bill will slash most of the popular tax credits designed to incentivize more people to switch to electric vehicles.
The end of these incentives is one of the top reasons why the company slashed its guidance for the year. Lucid now expects to produce between 18,000 and 20,000 vehicles this year. Its previous guidance was for 20,000 vehicles this year.
The most recent results showed that Lucid’s revenue rose to $259 million in the second quarter, bringing the first-half revenue to $494 million, which is higher than the $373 million it generated in the same period last year.
Worse, the company continued to lose money. It made a net loss of $539 million in Q2, an improvement from the $643 million it made in the same period last year.
This loss-making trajectory is risky for Lucid Group investors because it may result in further dilution soon. The management noted that the current liquidity would last it until the second half of the year.
As such, the company will likely need to raise additional funds before the liquidity dries up. Lucid’s outstanding shares have jumped from a low of 1.6428 billion in 2018 to 3.07 billion today.
Wall Street analysts expect the company’s annual revenue to be $1.31 billion this year, up by 61% from last year. Its loss per share will be 88 cents this year followed by 66 cents next year.
Lucid stock price technical analysis
The weekly chart shows that the LCID stock price has been in a downward trend in the past few years as concerns about its business remained.
Lucid stock has remained below the 50-week and 25-week Exponential Moving Averages (EMA). It has formed a descending triangle pattern whose lower side is at $1.98.
The triangle has a diagonal trendline that connects the highest swings since December 2023. A descending triangle is one of the most bearish patterns in technical analysis.
Therefore, a move below the lower side of the triangle pattern will be a continuation sign, with the next target being at $1.50.
However, there is also a risk that LCID stock price may rebound as it goes through a short squeeze because it has a huge short interest of a whopping 12%, making it one of the most shorted companies in the US.
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