Why Lucid Stock Plunged Over 25% This Week

It's been an eventful week for investors in Lucid Group (NASDAQ: LCID). The electric vehicle (EV) stock was already tanking ahead of earnings after getting a massive analyst downgrade when it dealt a big blow to investor confidence by announcing its CEO's sudden departure. That overshadowed Lucid's big production guidance for 2025, and the stock plunged this week -- it was trading 27% lower through Friday noon, according to data provided by S&P Global Market Intelligence. Here's all you need to know.

Lucid has a new CEO

Lucid's fourth-quarter revenue surged 49% year over year to $234.4 million, and the company narrowed its net loss to $0.22 per share from $0.29 a share during the quarter. 2024 is a "transformational year" for Lucid, according to interim CEO Marc Winterhoff -- "interim" because alongside its numbers, Lucid also announced the departure of its CEO, Peter Rawlinson, and said it is looking for a new CEO while Winterhoff spearheads the company.

Start Your Mornings Smarter! Wake up with Breakfast news in your inbox every market day. Sign Up For Free »

As is often the case, the abrupt leadership change seems to have spooked investors.

Be cautious about Lucid stock

Lucid stock took a big hit earlier this week, even before it announced its numbers or a new CEO, after Redburn Atlantic analyst Tobias Beith slashed the stock's price target to only $1.13 a share from $3.50 per share. Beith believes Lucid will have to significantly boost volumes for its to-be-launched midsize platform to retain its cost advantage and vehicle efficiency, which will mean significant cash outflows for the company. Beith is also not too optimistic about Gravity SUV gross margins. Lucid recently started delivering the Gravity SUV and is betting heavily on it for growth.

Lucid expects to more than double its production to 20,000 EVs in 2025, but investors aren't convinced given Lucid's poor execution history and the uncertainty that comes with a new leader at the helm.

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 Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $736,343!*

Stock Advisor provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month. The Stock Advisor service has more than quadrupled the return of S&P 500 since 2002*. 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 February 28, 2025

Neha Chamaria has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.