Lucid Group's Cash Burn Intensifies, Short Squeeze Looms

Lucid Group (LCID) has struggled in the stock market due to poor margins, high cash burn, and shareholder dilution. The company's stock has dropped over 90% since going public in mid-2021 and has underperformed the S&P 500. With high short interest and a risk of running out of cash, a short squeeze is a real possibility. As a result, the best long-term play is to sell Lucid.

Lucid Group (NASDAQ: LCID) experienced a mixed bag of news in the second quarter of 2025. The EV maker reported a strong jump in second-quarter deliveries, with 3,309 vehicles delivered, just shy of analysts' consensus of 3,611 units. This marks an improvement from the 2,394 vehicles delivered in Q2 2024 [1].

However, the stock did not react positively to this news, with shares edging up about 1% in premarket trading despite the company's delivery momentum. The stock remains down more than 32% year to date, and short interest stands at roughly 12.6% of the float, underscoring lingering bearish bets [1].

The company's Q2 earnings are expected to be released on August 5, with analysts projecting an earnings per share (EPS) of -$0.24, representing a 17.24% increase compared to the same quarter last year. Revenue is expected to reach $292.12 million, up 45.64% year-over-year [3].

Investors are also watching for the impact of future funding rounds, which are expected to be announced in early to mid-2026. Past funding rounds have caused drops in share price between 15 and 30%, and there is concern that the upcoming funding round could lead to further dilution and a potential pullback in share price [2].

Lucid Group's struggles in the stock market are not surprising, given its poor margins, high cash burn, and shareholder dilution. The company's stock has dropped over 90% since going public in mid-2021 and has underperformed the S&P 500. With high short interest and a risk of running out of cash, a short squeeze is a real possibility. As a result, the best long-term play for investors may be to sell Lucid [3].

References:
[1] https://ca.finance.yahoo.com/news/why-lucid-group-stock-jumping-154931218.html
[2] https://www.reddit.com/r/LCID/comments/1lrjjxa/impact_of_future_funding_grounds_on_share_price/
[3] https://finance.yahoo.com/news/lucid-group-lcid-falls-more-221504293.html