Why Did Lucid's Stock Drop More Than 10% On Tuesday?

Lucid Group shares dropped more than 10% on Tuesday as the electric carmaker completed a 1-for-10 reverse stock split that contributed to investor concerns already stoked by a reduced production forecast and bigger quarterly losses.

The split, which was approved by shareholders in August, resulted in the company having approximately 307 million shares outstanding, down from more than 3 billion. The number of authorized shares was reduced to 1.5 billion.

Lucid now expects to produce 18,000 to 20,000 vehicles in 2022, down from its previous goal of 20,000. 

Interim Chief Executive Marc Winterhoff told CNBC that the company was still targeting the upper end of that range, but said supply chain constraints have impacted the ramp-up of the Gravity SUV. 

Deliveries in the second quarter (Q2) increased 38% from the same period a year earlier to 3,309 vehicles, but still fell short of Wall Street's forecasts.

The company's net loss widened to $855 million, or roughly $0.28 a share, from a loss of $790 million, or $0.34 per share, a year earlier. Adjusted loss was about $0.24 per share. 

Operating costs climbed 7.5% to $1.06 billion, while Lucid ended the quarter with $4.86 billion in cash and liquidity.

To support growth, Lucid has been leaning on partnerships. Uber is investing $300 million as part of a deal with Lucid and self-driving startup Nuro to roll out more than 20,000 autonomous Gravity SUVs over six years. 

On the company's Q2 earnings call, Winterhoff called the tie-up“a strategic alignment” that validates Lucid's platform beyond direct car sales.

The company is also trying to soften the blow from policy changes. With the federal $7,500 EV tax credit set to expire at the end of September, Lucid said it will introduce its own “Lucid Advantage Credit” to keep offering the same incentive on leased Gravity SUVs through December.

Saudi Arabia's Public Investment Fund continues to back the company as its largest shareholder, holding a 57.6% stake.

On Stocktwits, retail sentiment for Lucid was 'neutral' amid 'extremely high' message volume.

Lucid's stock has declined 41.5% so far in 2025.

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