$150,000 CARS, NO PROFIT: Lucid’s Existential Crisis Explained (Stock Down 55%)
You know, a lot of people have been saying to me, Sam, why has Lucid stock price fallen so much? And you know what? They got a good point. Lucid stock price has fallen by 55% since February of this year. 55%. I mean, investors have been completely burned. That’s That’s more than half. More than half. Have a look at these numbers. They’re pretty wild, right? On on the 18th of February, Luc’s stock price was sitting at $34.80. Today it’s sitting at $15. Hello my friends, welcome to the channel. I’m Sam Evans. You’re watching the Electric Viking. And I’ve invested in a fair few EV stocks over the last few years for for certain reasons that people watching the channel for a while now know about. I don’t have any at the moment, this point in time. But um Lucid, I’ve warned people on a number of occasions not to listen to the muppets at Seeking Alpha telling you to buy Lucid stock. And they have numerous times. People were saying you should sell your house. There is quite honestly an article on Seeking Alpha by a so-called investment expert saying you should sell your house to buy Lucid Stock. Imagine if you’d done that. I mean I mean Lucid stock price right hit a high of $552 on the 19th of November 2021. $552 and now it’s sitting at $15. If you’d sold your house and bought at that period of time, then you’d have almost nothing left to show for it. Oh, this is just, you know, do not subscribe to these guys because this is the kind of crazy information that would put you in a position where you’re basically going to be declaring bankruptcy. So, why what’s going with Lucid? Why is their share price continuing to fall? Well, there’s some pretty good reasons why. The first, let’s start with the obvious. They will run out of cash in the middle of 2027. Now, you’re probably thinking to yourself, “Well, aren’t they owned by the Saudis? I mean, won’t these rich Saudis just keep on bankrolling them forever because uh that’s what they do? And my response would be, well, maybe. But for how long? For how long would you be bankrolling a company losing this much money? YouTube’s new algorithm means that you’re often not getting all of our videos in your feed. There’s 7,500. I’m pretty sure you’re probably not seeing a lot of them. In the description, there is a link to our newsletter. Click on that and you can get an update every day of all the latest news in the electric car industry. Lucid Group announced the pricing of a new $875 million offering of senior notes. Basically try to raise funds to not run out of money in a private sale to institutional investors. Now, for the love of everything that’s good in the world, if you’re an institutional investor that is, you know, if you’re a nice guy, steer clear. Then these funds will help Lucid pay down debt as it prepares for its next growth phase, whatever that is. After delivering just 4,000 vehicles in the third quarter of this year, making them a smaller company than even Ferrari, Lucid marked its seventh straight quarter with record deliveries. Through September, the EV maker delivered nearly 10,000 cars, topping the roughly 10,200 it handed over in 2024. In other words, it sold 300 more cars this year than it did last year. Incredible growth. But Electric says that’s great. You can’t make this stuff up. I’m curious, Electric, what are they paying you to say this stuff? Lucid ended the third quarter with 1.6 billion in cash and cash equivalents, which it said is enough to fund it through the first half of 2027. Now, yeah, technically that’s probably not accurate because they report a debt of just over two billion. Lucid also announced an agreement with Saudi Arabia’s public investment fund, Lucid’s largest shareholder, to increase the delayed drawer loan credit facility from 750 million to around 2 billion. Now, the market, you’d think, wow, great. Well, the Saudis are going to bankroll Lucid forever, so why don’t we invest? But the market wasn’t pleased. Lucid’s stock price actually fell on this news. Including the undrawned credit line, Lucid’s total liquidity is around 5.5 billion, up from the factual or the actual 4.2 billion it reported in Q3. Lucid said it was looking outside of PIF for funding as it ramped up production of the Gravity SUV and prepared to launch its midsize platform in late 2026. So Lucid saying, “This is not enough. We need more money.” Sound like Fisker to you? Yeah, it does to me. The EV maker launched an $875 million convertible senior note offering due in 2031. Good luck getting that money back. In a private offering to persons reasonably believed to be qualified in institutional investors. Persons reasonably believed to be qualified institutional investors. In other words, drug lords, maybe. I don’t know. Lucid gave the investors the option to purchase an additional 100 million in debt within 13 days using dirty money. No, they didn’t really, but they did. They didn’t say dirty money. Anyway, Lucid will use about 752 million of the proceeds to repurchase some of its outstanding 1.25% convertible senior notes due in 2026. It will use the remaining proceeds for general corporate purposes. Lots of accounting going on here. In relation to the offering, AR Third Investment Company, a subsidiary of the PIF, is expected to purchase 637 million of Lucid’s common stock. The transaction is expected to occur around the notes maturity date. Oh, anyway. Um, in news that um is also relevant, Lucid confirmed it’s on track to launch its midsize platform in late 2026, which will wear at least three top hats. The first will be a midsize electric crossover starting at around 50,000. Now I’m kind of curious to know why electric have said it’s got to wear three top hats. What exactly does that mean? Um can can you confirm this for us electric? I don’t know. Anyway, Lucer stock is down after the note offering down by 6%. And yeah, the share price technically is down 48% since the start of January, but since February it’s down by 55%. Um, yeah, it’s not, you know, even despite all this lucid, all this money from the Saudis, investors aren’t particularly confident. So, why might they not be confident? Well, here’s some key reasons why. In Q3 2025, Lucid’s free cash flow was about 955 million. This cash flow didn’t come from anything they did. It came from investors really. annualized. That puts the burn rate for Lucid at around US4 billion per year, right? 955 million times four, it’s nearly four billion. So liquidity, cash and credit lines is reported at approximately 5.5 billion, but that’s basically just credit. Now using the burn rate and liquidity with US 5.5 billion available to it and this is all debt by the way and a US4 billion annual cash burn rate Lucid’s runway is roughly 1.4 4 years. 1.54 years to burn through this crazy amount of money that they have access to credit. So the Saudis have bankrupt them now. But what happens in a year and a half when Lucid comes back to the Saudis and says we just burned through 5.5 billion. Can you give us another five and a half guys? I mean there is a limit even to the Saudi money. This suggests they may have operations covered through mid20 26 though. However, that assumes no major change in burn rate or additional financing. If burn increases or revenue fails to improve, which is likely, the runway could shrink to 12 to 15 months or less. So, this estimated burn rate is based on one quarter. Guys, to remind you, actual burn may accelerate. Lucid likes to spend. Lucid’s unit economics remain deeply negative. gross margin is minus 99%. It’s making nothing on every car it sells. The gross margin is shocking. Future capital raises or large draws from credit lines will affect dilution and viability. And the more they keep on asking for money, the worse it looks. If revenue improves significantly, cash burn could moderate and extend runway. But how long can the runway be extended by at these current burn rates? Not that long. So, Lucid appears to have cash runway until mid 2026. They’re saying mid 2027, but I’ve got no idea where they’re getting those numbers from. I guess they’ve got a creative creative accountants working for them. But this is only if it maintains current liquidity and doesn’t significantly accelerate its spending. Without a major improvement in profitability or a fresh major capital injection, the risk of cash exhaustion is very real. In other words, the risk of bankruptcy is real, even with the Saudis bankrolling them. No one has unlimited funds. Now, you could look at another way, guys. You could, let’s put a positive spin on this story. While Lucid’s operational cash burn is incredibly high for a company that produces so few cars, the backing of the Saudi Public Investment Fund, PIF, and other recent financing moves have provided the company with a significant financial cushion or runway that is expected to last until at least early to mid 2027. So, which which story do you prefer? that last positive story or my spin on this guys. Lucid the gravity I’ve I’ve heard it might be coming to Australia. I’d love to have one. I’d love to drive one, but um I don’t think it’ll have a parent company in 10 years time. So I think all these problems we’re seeing with Fisker EVs that no longer there’s no longer any parent company around. People struggling to get parts and to fix them. They’re having to work out all these really creative solutions. That’s probably the same thing that is going to happen to owners of Lucid vehicles. Let’s be real. That’s the most likely scenario here. Thanks for watching.
$150,000 CARS, NO PROFIT: Lucid’s Existential Crisis Explained (Stock Down 55%)
Lucid is selling $150,000 luxury EVs yet still struggling to turn a profit, pushing the company into a deep financial crisis. With sales slowing and cash burn accelerating, investor confidence has collapsed—sending the stock down 55% as Lucid fights for survival.
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