Why Lucid Stock Skidded to a 30.1% Decline in the First Half of 2025

Key Points

• Shares of Luxury EV maker Lucid sank in 2024 and failed to recover in the first half of 2025.

• The departure of the company's CEO, as well as EV-unfriendly legislation in Washington, unsettled both retail investors and analysts.

• Despite the stock's poor performance, there's still a lot to like about the company's prospects.

• 10 stocks we like better than Lucid Group ›

After plummeting 28.3% in 2024, Lucid (NASDAQ: LCID) investors were very much looking forward to ringing in 2025, hoping that the luxury electric vehicle (EV) maker would recover from the previous year's decline.

But those hopes were dashed through the first half of 2025. According to data provided by S&P Global Market Intelligence, shares of Lucid dropped 30.1% through the first six months of 2025.

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Image source: Getty Images.

Several potholes sabotaged Lucid stock's drive through the first half of the year

While Lucid reported strong fourth-quarter 2024 financial results in late February, it wasn't enough to overshadow the company's announcement that its CEO was stepping down. In addition to rattling the nerves of Main Street investors, analysts on Wall Street recognized the development as a concern. Bank of America, for example, slashed its price target to $1 from $3 on the belief that the CEO's departure was "much more consequential than understood by the market."

After rolling through March and April, Lucid stock encountered resistance again in May. Early in the month, the company reported Q1 2025 financial results that jump-started a sell-off in Lucid stock. Booking $235 million on the top line for the first quarter of the year, Lucid fell short of analysts' expectations that it would generate revenue of $246.2 million.

News out of Washington, D.C., further shook investors' resolve during the month. Addressing the treatment of the $5,700 federal EV tax credit in the upcoming legislation, Speaker of the House, Rep. Mike Johnson, commented, "I think there is a better chance we kill it than save it," according to reporting from Bloomberg.

Between Rep. Johnson's commentary and President Trump's overall lack of enthusiasm for EVs, investors continued to sell Lucid stock through June as momentum built for the One, Big Beautiful Bill (now law, as of July 4) -- and the likelihood that the federal EV tax credit would disappear grew.

Is it better to watch Lucid stock from the side of the road at this point?

In the early days of the back half of 2025, Lucid stock has been driving higher thanks to the company's report that it produced and delivered 3,863 vehicles and 3,309 vehicles, respectively, notably better than the 2,110 vehicles it produced and 2,394 vehicles it delivered during this period in 2024.

While it was a rocky road through the first half of the year, the company is still young, and it's common for the stocks of companies still early on in their developments to experience volatility. Despite the recent ups and downs, there's still a lot to like about Lucid, and prospective investors shouldn't be dissuaded for kicking the tires further on Lucid stock to see if it's right for them.

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Bank of America is an advertising partner of Motley Fool Money. Scott Levine has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Bank of America. The Motley Fool has a disclosure policy.