Will Domestic Partnerships Secure Lucid's Supply Chain Future?

Lucid Group, Inc. LCID maintained positive momentum toward its volume targets despite persistent challenges in the EV sector, particularly within the supply chain. In the second quarter, Lucid produced 3,863 vehicles, up from 2,110 units in the corresponding quarter of 2024. In light of ongoing market volatility, the company revised its 2025 production outlook to a range of 18,000-20,000 vehicles, down from the prior guidance of 20,000.

The company reaffirmed its commitment to U.S.-based manufacturing to counter the tariff impact and other geopolitical issues and highlighted several recent initiatives. In June, it announced a preliminary agreement with Graphite One to source natural and synthetic graphite domestically starting in 2028, which complemented its existing nonbinding supply agreement signed in April 2024. 

Lucid has also partnered with Alaska Energy Metals, Electric Metals USA and RecycLiCo to enhance its supply chain. The company will obtain nickel from Alaska Energy Metals to boost vehicle range, extend battery life and reduce dependence on metals like cobalt. Manganese from Electric Metals will support the development of long-range, high-performance EVs while maintaining battery and passenger safety. 

Collaboration with RecycLiCo, a critical minerals refining firm, will aid Lucid’s energy storage efforts, promote responsible supply chains and advance the push for increased domestic sourcing of essential materials. LCID carries a Zacks Rank #3 (Hold) at present. 

You can see the complete list of today’s Zacks #1 Rank stocks here.

Other Automakers Tackling Supply Chain Snarls

Rivian Automotive, Inc. RIVN produced 5,979 vehicles in the second quarter of 2025, down from 9,612 units in the same period of 2024, as supply chain complexities due to shifts in trade policy impacted operations. Lower production volumes negatively affected Rivian’s automotive gross profit, with approximately $137 million in fixed costs included in cost of revenues compared to more normalized volumes. Rivian expects the launch of the R2 to improve fixed cost absorption, a benefit that will extend beyond the R2 to the R1 lineup. 

General Motors Company GM has entered into a multi-year agreement with Texas-based Noveon Magnetics to source neodymium magnets for its full-size trucks and SUVs. The partnership secures a consistent source of rare earth magnets for General Motors, while strengthening its domestic supply chain and reducing dependence on imported critical materials. The magnet deliveries to General Motors began in July.

Lucid’s Price Performance, Valuation and Estimates

LCID has underperformed the Zacks Automotive - Domestic industry year to date. CVNA shares have lost 24.8% compared with the industry’s decline of 14.4%.

YTD Price Performance

From a valuation perspective, Lucid appears overvalued. Going by its price/sales ratio, the company is trading at a forward sales multiple of 3.02, higher than its industry’s 2.72.

EPS Estimates Revision

The Zacks Consensus Estimate for 2025 EPS has moved down 4 cents in the past seven days. The Zacks Consensus Estimate for 2026 EPS has moved down a penny in the past 30 days.

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This article originally published on Zacks Investment Research (zacks.com).

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