Lucid sinks following weaker-than-expected Q3 vehicle deliveries and lowered analyst outlook

Lucid delivered 4,078 vehicles in its third quarter, the seventh straight quarterly delivery record for the luxury EV maker. But despite that year-over-year growth, the figure came in below Wall Street’s estimates by about 18% in a quarter where EV makers (including luxury competitors like Rivian) sold thousands of vehicles leading up to the expiration of the US federal EV tax credit.

Lucid shares fell more than 8% in Tuesday trading. Also likely making investors skittish was a freshly lowered Lucid rating by CFRA from “sell” to “strong sell.”

CFRA analyst Garrett Nelson wrote that the rating drop “reflects concerns regarding LCID’s cash burn rate, weak demand, pricing pressures, EV competition, and the fact it is nowhere near close to achieving the mass production rates needed to meaningfully drive down unit costs.” CFRA’s price target for Lucid is $10, 55% below the stock’s current price.

Nelson argues customer demand is a major issue for Lucid, which hasn’t updated its full-year production guidance of 18,000 to 20,000 vehicles since its earnings report in August. To achieve the low end of that range, Lucid will need to build more than 8,000 vehicles in its fourth quarter, which would reflect Q4 production growth of 137% year over year.