Lucid Shares Drop 5.5% Amid EV Mandate Rollback Concerns

Lucid stock declines as Trump administration plans threaten EV support. Political shifts could impact the industry, especially for new entrants like Lucid.

Date: 22-01-2025

AI Rating: 4

Impact on Lucid Group's Business Outlook

Lucid's stock has declined by 5.5% following the inauguration of President Trump, indicating investor concern over potential policy changes affecting the electric vehicle (EV) sector. The Trump administration's plan to remove the EV mandate from the Biden era could affect Lucid and its competitors.

Political Headwinds

With the commitment to declare a national energy emergency, the administration's direction signals a broader move away from supporting the EV industry, which may include the removal of federal subsidies and tax rebates. If realized, these changes will create significant challenges for Lucid. In contrast, the already established and scaled operations of Tesla may allow it to navigate these challenges more effectively.

Production and Delivery Growth

Lucid reported positive production and delivery figures in its fourth-quarter update, producing 3,386 cars and delivering 3,099, a substantial increase from the previous year's figures. This growth, however, occurs in a context where external factors such as the loss of tax incentives and shifts in energy consumption trends could hinder further scalability and profitability.

Long-Term Potential

Despite facing immediate headwinds, the backing from Saudi Arabia's Public Investment Fund provides a cushion for Lucid's operations. This financial foundation may enable Lucid to persist through tough market conditions while striving to establish a more competitive position within the EV landscape.

Stocks: LCID TSLA