Why Lucid (LCID) Shares Are Trading Lower Today

What Happened?

Shares of luxury electric car manufacturer Lucid (NASDAQ:LCID) fell 6.2% in the afternoon session after Morgan Stanley downgraded the stock and sharply cut its price target, citing a prolonged path to profitability and significant risks for shareholders. 

The analyst lowered the rating to Underweight from Equal Weight and slashed the price target to $10 from $30. The downgrade was based on projections that Lucid would not achieve gross profitability until 2028 and would continue to face operating losses through 2031. The firm also warned of a notable shareholder dilution risk, estimating that Lucid would need to raise approximately $2 billion in equity by the second half of 2026 to fund its operations. This means the company might have to issue more stock, which could lower the value of existing shares. Broader industry headwinds were also mentioned, such as the expiration of federal EV tax credits, which were expected to contribute to slowing electric vehicle adoption.

The shares closed the day at $12.76, down 5% from previous close.

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What Is The Market Telling Us

Lucid’s shares are extremely volatile and have had 55 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.

The previous big move we wrote about was 5 days ago when the stock gained 5.5% on the news that the company announced its first major automotive partnership in Europe with HYROX, the World Series of Fitness Racing. The deal marked a significant milestone for HYROX, as Lucid became its first major automotive partner in Europe for the 2025/26 season. This move placed the Lucid brand in front of a fast-growing community, with HYROX operating in more than 30 countries and expecting 1.3 million participants in its next season. The partnership was viewed as a positive step for Lucid's European expansion and brand visibility. Investor attention was also drawn to the company's participation in the UBS Global Industrials and Transportation Conference on the same day.

Lucid is down 58% since the beginning of the year, and at $12.74 per share, it is trading 63.4% below its 52-week high of $34.80 from February 2025. Investors who bought $1,000 worth of Lucid’s shares 5 years ago would now be looking at an investment worth $129.21.

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