Can Lucid Group Stock Help Make You a Millionaire?

Every investor wants to find the next Tesla (NASDAQ: TSLA). Shares have risen more than 20,000% since 2010. A single $5,000 investment would have turned you into a millionaire if you had invested early.

On many metrics, Lucid Group (NASDAQ: LCID) appears to be a worthy successor. There are two reasons in particular that Lucid could mimic Tesla's rise, minting many new millionaires along the way. But there's one catch that every potential investor should also be aware of in order to maximize your potential gains.

Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Learn More »

2 reasons this company might be the next Tesla

We must first understand what made Tesla so successful in the first place. Luckily, the company released a "Master Plan" nearly 20 years ago outlining its exact strategy. Written by Elon Musk, it included three simple steps:

1. Build a sports car
2. Use that money to build an affordable car
3. Use that money to build an even more affordable car

In hindsight, Tesla executed this plan flawlessly. It released its powerful yet limited-sales-potential sports car, the Roadster. It reinvested its funds and growing reputation into two luxury models that were a bit more affordable: The Model X and the Model S. Then it used those funds, leveraging its even greater reputation, into two vehicles affordable to the masses: The Model Y and the Model 3.

It's still early, but Lucid is well on its way to replicating this strategy. Currently, it has two high-priced models: The Lucid Air and the Lucid Gravity. These models roughly translate to Tesla's Model X and Model S variants. But just like Tesla, Lucid is planning even more affordable models. Instead of just two models, however, it's planning three -- all expected to debut under $50,000. Production is expected to begin in 2026, but anyone familiar with electric vehicle (EV) production timelines should expect a more conservative launch date, perhaps sometime in early 2027.

There's more to like about Lucid than just its ability to replicate Tesla's growth strategy for vehicle launches. Lucid has also done a great job catching up to Tesla in terms of research and development, at least if you believe management's take on the situation. According to Lucid's former CEO, the company is now "many years ahead" of other EV manufacturers -- Tesla included -- when it comes to next-gen technology investment.

While I'm not totally buying management's take given Tesla's gigantic capital and data advantage, Lucid has clearly put its money where its mouth is, investing more in research and development over the past 12 months than its entire sales base over that period. On a percentage of sales basis, Lucid is reinvesting far more than Tesla at this point, despite its significantly smaller size.

But before you jump in, there's one pitfall every Lucid investor should be aware of, too.

TSLA Revenue (TTM) data by YCharts.

Warning: Don't make this mistake with Lucid stock

Take a look at Tesla's share price over the past two decades, and you'll notice a clear historical pattern: extreme volatility. High growth stocks are often more volatile in general, since the market is constantly rerating how much it's willing to pay for future expected growth. But early stage EV stocks can be even more volatile than the norm.

Many EV manufacturers have gone under this century, and short-term fear can catch on quickly. Plus, the introduction of new models typically takes years and many billions of dollars to be realized. This adds significant execution risk, plus plenty of long stretches in which few major catalysts are realized.

If you're going to take a shot on Lucid Group stock, the key to success will be patience. Anything can happen over the short term. Investors today should be focused on the company's long-term vision of getting its affordable EV models to market. At the minimum, that will take a couple of years. Be wary of jumping in with an investment horizon shorter than that.

Should you invest $1,000 in Lucid Group right now?

Before you buy stock in Lucid Group, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Lucid Group wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $495,226!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $679,900!*

Now, it’s worth noting Stock Advisor’s total average return is 796% — a market-crushing outperformance compared to 155% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.

See the 10 stocks »

*Stock Advisor returns as of April 10, 2025

Ryan Vanzo 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.