Is Lucid Motors a Millionaire-Maker?

Lucid Motors (NASDAQ: LCID) is attempting to use the emergence of a new technology to gain entry into the highly competitive automotive sector. That's a tall order, given that the industry is dominated by a relatively small number of large companies. Notably, most of them are also leaning into the new technology that Lucid is focused on. Here's what you need to know before you buy Lucid in the hopes of it being a millionaire-maker stock.

What is Lucid really doing?

The auto industry is largely built around internal combustion engines (ICE). A massive infrastructure exists to support ICE vehicles, from the auto manufacturer to the gas station where customers purchase fuel. However, Tesla (NASDAQ: TSLA) upended the story when it introduced all-electric vehicles (EVs).

Image source: Getty Images.

Tesla's success basically forced the auto industry's dominant players to take EVs seriously. At this point, however, the major auto companies are basically all producing their own EVs. Tesla was able to break into the industry because it was producing something novel and exciting. It had a first-mover advantage.

Lucid is attempting to utilize the same EV technology to establish itself in the automotive industry as well. The competition is much fiercer at this point, making that goal far more difficult to achieve. And the company hasn't been hitting on all cylinders, having fallen short of some key production goals.

Where does Lucid stand?

At the end of the third quarter of 2025, Lucid was able to produce 3,891 of its EVs. That was up 116% year over year, which is impressive. However, 3,891 is a rounding error when you compare it to Tesla's production of 447,450 vehicles. Lucid's production is literally less than 1% of Tesla's production.

Given that Lucid is still scaling up its business, that alone isn't such a bad thing. However, if you examine the company's financial statements, there are some larger worries to consider.

According to the income statement, Lucid is bleeding red ink. It lost $3.31 per share in Q3 2025 alone and $8.50 through the first nine months of the year. However, the bigger concern is gross profit, since the company is losing money on every single car it makes. The numbers are troubling, with revenue from car sales of roughly $337 million in Q3 versus costs to make those cars of nearly $672 million.

That's an extremely wide gap to close at a time when the company continues to spend huge sums of money on growth, notably research and development. Research and development costs in Q3 totaled $325 million, which alone was nearly as much as the revenue brought in from car sales.

Simply put, it looks like Lucid is a long way from turning a gross profit, let alone generating positive earnings. That problem is exacerbated by the balance sheet. At the end of Q3 2025, Lucid had roughly $1.6 billion in cash and around $700 million in short-term investments. It is highly likely that Lucid will need more cash than it currently has as it looks to expand its business.

LCID Shares Outstanding data by YCharts.

The easiest way for the company to raise cash is to tap the capital markets with debt and equity sales. Both are problematic. More debt means higher interest costs, which puts profitability further out of reach. Each sale of stock dilutes current shareholders. This is a high-risk investment that could actually be getting even riskier as time goes on.

Tread with caution if you are looking at Lucid

The market into which Lucid is attempting to insert itself is far more competitive than it was when Tesla pulled off that feat. If Lucid can manage to build out its EV business and become sustainably profitable, it could turn investors into millionaires. The problem is that Lucid is so far behind the competition that it is possible that it won't establish itself in the auto sector. In that case, investors could end up losing everything. Until there's more evidence of success, such as achieving a gross profit, investors are probably better off watching this upstart EV maker from the sidelines.

Reuben Gregg Brewer has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Tesla. The Motley Fool has a disclosure policy.