Here's Why I Wouldn't Touch Lucid With a 10-Foot Pole

• Many special-purpose acquisition companies (SPACs) went nationalist excessively aboriginal and person seen their stocks get crushed.

• Lucid creates high-quality electrical vehicles, but the institution is rapidly burning done cash.

• The electrical conveyance marketplace is struggling arsenic a whole.

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The electrical conveyance (EV) institution Lucid Group (NASDAQ: LCID) went nationalist done a peculiar intent acquisition institution (SPAC) successful 2021, a clip erstwhile valuations were loose, superior was abundant, and high-profile SPAC merger announcements were occurring daily.

Unfortunately, galore companies took vantage of the tremendous marketplace conditions astatine the clip and went nationalist astatine large valuations earlier they were ready. Then the banal marketplace took a large deed successful 2022, wiping retired galore of the SPAC targets and sending their stocks into escaped fall. Lucid was portion of this radical and has seen its banal diminution by implicit 87% successful the past 5 years.

Still, galore spot semipermanent imaginable successful the EV marketplace and admit Lucid's vehicles. In July, the ride-hailing elephantine Uber Technologies invested $300 cardinal successful Lucid arsenic portion of a concern successful which Lucid volition assistance with the improvement of robotaxis for Uber, which plans to rotation retired implicit 20,000 robotaxis wrong the adjacent six years.

Still, I wouldn't interaction Lucid with a 10-foot pole. Here's why.

Lucid has faced galore challenges extracurricular of its control, akin to those faced by the broader EV market. President Donald Trump's tariffs person made creating its vehicles much costly and wounded the company's margins. Furthermore, Trump's landmark spending measure eliminated a $7,500 electrical conveyance taxation credit, which is besides expected to stymie demand.

Lucid besides has concerning financials, with a precocious currency pain complaint and a decent magnitude of debt. Through the archetypal 3 quarters of 2025, Lucid reported a nonaccomplishment of $8.50 per diluted share.

Wall Street analysts besides person important concerns astir Lucid's quality to conscionable its full-year guidance for astir 18,000 vehicles produced. In the 3rd quarter, Lucid delivered adjacent to 4,100 vehicles, with an further 1,000 vehicles produced for last assembly successful Saudi Arabia. The institution has delivered astir 10,500 vehicles this year, meaning Lucid would request to present astir 7,500 vehicles successful the 4th fourth to deed its yearly extremity of 18,000.

Investors should besides support successful caput that galore see the EV assemblage to person outperformed successful the 3rd quarter, arsenic consumers rushed to instrumentality vantage of the EV taxation recognition earlier it expired.