Why Lucid Stock Still Looks Too Risky for Long-Term Investors​

Since Tesla (NASDAQ: TSLA) broke open the electric vehicle (EV) market, a crop of other specialized EV manufacturers have emerged attempting to do the exact same thing and challenge the hold legacy automakers have on the auto market.

One that entered the market with lots of promise is Lucid (NASDAQ: LCID). However, investors have since soured on the EV startup.

The company's Air and Gravity model lines look every bit like the Tesla Model S and Model Y competitors they're meant to be, and their performance figures are impressive. Yet despite two models that have gotten positive reviews and awards and an advertisement campaign featuring Timothée Chalamet, the company's financials leave a lot to be desired.

Lucid dream, or nightmare?

Let's start with the good. After all, Lucid still does have potential despite its current financials. Revenue for third-quarter 2025 was up, growing from $200 million in Q3 2024 to $337 million, an increase of 68.5%.

That sounds great -- but scratch a little harder, and the showroom-ready paint starts to flake off.

Image source: Getty Images.

Since the end of 2024, the company has burned through a considerable amount of the $5 billion in cash and cash equivalents it began the year with. As of Sept. 30, 2025, the company's cash had depleted to $2.99 billion. Couple that with Lucid's liabilities sitting at $5.1 billion, and the company's position is looking a little rough.

Despite the increase in revenue, the cost of that revenue increased considerably from $412 million to $670.2 million, or 62%, which is almost as much as revenue increased. That was good for a net loss of $978.4 million for the quarter. Now, that is a slight improvement over the $992.5 million net loss it experienced in Q3 2024, but it's still more than twice (almost three times) the company's revenue for the quarter.

Let's compare it to its two nearest competitors. Tesla and Rivian (NASDAQ: RIVN) are more or less in the same position as Lucid.

At present, Lucid has a net income margin of -214%, which is -- there's no other way to put it -- very bad. Rivian is also negative, but its net margin is -61%, which is a considerable improvement. Tesla is the only profitable one of the three companies, with a net income margin of 5.3%.

Lucid is doing well in terms of revenue growth. Year over year, its revenue is growing by 45.8% which beats Rivian at 28.2% and Tesla's decline of 1.56%. But when you consider that both Rivian and Tesla, with $7 billion and $41 billion in cash, respectively, are in a considerably more stable position than Lucid, that revenue doesn't amount to very much. After all, it's not what you make that matters; it's what you keep. And Lucid is burning through cash alarmingly fast for a company running deep losses.

Overall, despite its cars being nice to look at, cheaper to buy, and better than their Tesla counterparts from an owner's point of view based on the reviews, Lucid as a company needs to improve its financial position, or it will remain a tough sell to prospective investors. No amount of celebrity endorsements or glowing reviews from the automotive press will fix that.

James Hires 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.