Lucid Group Inc. LCID is betting big on its upcoming Gravity SUV to capture a broader slice of the electric vehicle (EV) market, but it’s a cautious play for investors.
Needham’s Chris Pierce reaffirmed a Hold rating on LCID stock, highlighting promising delivery gains while flagging concerns over long-term profitability and further dilution risks.
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Lucid’s Rising Deliveries, Falling Margins
Lucid’s latest earnings report spotlighted a third consecutive quarter of record deliveries, a rare positive amid the fierce EV competition. The company is using pricing adjustments to fuel this demand, but Pierce noted that discounts have chipped away at the average selling price for five straight quarters.
Despite these pricing moves, Lucid still hasn’t cracked the code to profitability—a challenge, as EV giants with delivery volumes five times higher still struggle to achieve positive gross margins, the analyst said.
Read Also: Lucid Rises Nearly 5% In Pre-Market After Strong Q3 Results, Opening Orders For Gravity SUV
Gravity SUV: A Game Changer Or A Gamble?
Lucid’s Gravity SUV, set for production later this year, represents a significant push to broaden its brand reach. Positioned as Lucid’s gateway into the lucrative SUV category, Gravity is expected to expand the company’s addressable market. Pierce described it as a “second chance at a first impression” for the brand, although he tempered expectations with a cautious rollout projection, with substantial deliveries not expected until the latter half of 2026.
While Lucid boasts cutting-edge tech that differentiates it from competitors, Pierce noted that the company has yet to achieve strong consumer resonance—a sentiment dampened by slowing EV adoption rates across the industry.
The Dilution Dilemma
Backed by the deep-pocketed Saudi Public Investment Fund (PIF), Lucid has managed to secure substantial funding for its ambitious roadmap.
However, Pierce foresees additional capital raises—potentially up to $4 billion—necessary to bridge the gap to profitability and push Gravity into the market. For shareholders, this could spell further dilution, with Lucid already leaning on a recent $1.75 billion raise to power through the SUV launch and into 2026, the analyst noted.
LCID Chart: The Bulls Hold Out Hope
Lucid’s stock has recently been trading below key moving averages, with the eight, 20-day, and 50-day simple moving averages (SMA) all signaling a bearish trend. The MACD indicator is reinforcing the bearish momentum at a negative 0.29, signaling short-term pessimism.
With the Relative Strength Index (RSI) in oversold territory at 27.17, caution is warranted as investors assess Lucid’s extended path to profitability.
Lucid may be cruising forward with promising delivery numbers and an enticing new SUV, but as Needham’s Pierce advises, the road to profitability remains long and uncertain.
For now, it’s a waiting game as investors weigh the allure of Lucid’s Gravity against the gravitational pull of profitability challenges and potential dilution.
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