Lucid Stock Slumped by 38% in 2023. Is it a Buy in 2024?

Although we’re only a few weeks into the new year, for Lucid (LCID -0.38%), it’s already shaping up to be a continuation from 2023. That was a rough year for the young electric vehicle (EV) maker, and its stock ended down 38%, according to data provided by S&P Global Market Intelligence.

A year in review

Lucid kicked off 2023 by posting disappointing first-quarter results — in particular, a net loss of $780 million — and offering a full-year production forecast update that emphasized the lower end of its original 10,000 to 14,000 vehicle range, and was far below analysts’ consensus estimate of 21,815 vehicles.

Early 2023 also brought investors other negative developments, such as the news that preorders for the Lucid Air sedan had fallen to roughly 28,000 from 34,000, and that the company was slashing its workforce by roughly 18% amid a cash crunch.

The second quarter brought more of the same as its net loss widened from the prior-year period to $764.2 million. The company also faced a price war as Tesla reduced prices on its EVs, which drove Lucid to slash the price of its luxury Air. The EV maker rolled out of the third quarter posting a $631 million net loss, and management told investors it was cutting its full-year production estimate to a range of 8,000 to 8,500 vehicles.

The bad news trend would continue in December, which brought word that CFO Sherry House was leaving the beaten-down EV maker to pursue new opportunities. That left Lucid to name an interim CFO as it headed toward the end of a fourth quarter during which it would deliver just 1,734 vehicles — a 10% year-over-year decline.

The trend is down

One quarter doesn’t make a trend, as some investors say. The truth for Lucid investors, however, is that the trend is clear: The EV maker has steadily slimmed down its production forecasts over the past couple of years. Manufacturing issues have hindered production, and demand weakness has held back delivery figures.

Lucid’s 2023 production of 8,428 EVs and deliveries of 6,001 certainly failed to inspire investors, who sent its stock to an all-time low of $3.15 per share. The stock continues to test the low end of its 52-week range of $3.15 per share to $17.81 per share.

Looking ahead

Lucid picked the Air sedan to be its debut model, and it was a smart choice considering its efficiency and range, but its sales have come up short of expectations due to its high price tag, particularly as the price war for EV sedans continues.

The current hope of shareholders is that the company can survive its cash crunch and demand weakness, and make it to the launch of its Gravity crossover this year. The electric SUV will debut with 440 miles of range and a starting price of $80,000. The young EV maker is also designing a smaller and less expensive platform to compete with Tesla’s popular Model Y crossover.

2023 was a rough year for Lucid, and nothing that has happened this January has signaled a change to its negative trends. Shareholders are left to hope that its future models can help the struggling company gain some sales traction. However, for now, if you’re wanting to invest in a young EV maker, Lucid shouldn’t be at the top of your candidate list.