Lucid Group (LCID) Plunges 9.7% on Reverse Split and Production Woes – Is the EV Maker Reaching a Breaking Point?

Summary
• Lucid Group executed a 1-for-10 reverse stock split after hours on Friday
• Intraday price drops 9.67% to $17.885, hitting 52-week low of $17.36
• Second-quarter operating loss widens to $803M amid production delays and weak demand

Lucid Group’s stock has plunged nearly 10% in volatile intraday trading, driven by a post-market reverse stock split and deteriorating fundamentals. The electric vehicle maker’s shares now trade near their 52-week low, reflecting investor skepticism over its path to profitability. With production guidance slashed and operating losses persisting, the stock’s sharp decline underscores broader concerns about the EV sector’s viability in a slowing market.

Reverse Split and Production Guidance Cut Spur Investor Exodus
Lucid’s 1-for-10 reverse stock split, announced on August 21, failed to galvanize investor confidence as the company simultaneously cut its 2025 production guidance to 18,000–20,000 vehicles. The move, intended to elevate the stock price above penny status, coincided with a second-quarter operating loss of $803 million—a 30% increase from the prior year. The split reduced shares outstanding from 3.07 billion to 307 million but did not address core challenges: production bottlenecks, unprofitable operations, and a lack of demand for its premium-priced vehicles. The stock’s 9.7% intraday drop reflects a broader sell-off in EVs, with investors pricing in prolonged losses and uncertain market conditions.

EV Sector Under Pressure as Tesla Drags Down Auto Manufacturers
The broader EV sector mirrored Lucid’s decline, with Tesla (TSLA) falling 1.32% intraday. Lucid’s struggles highlight systemic headwinds for EVs, including waning consumer demand, regulatory uncertainty, and production inefficiencies. While Tesla maintains sector leadership with $1.06 trillion in market cap, Lucid’s 52-week low of $17.36 underscores its precarious position. The company’s inability to scale production profitably contrasts sharply with Tesla’s dominance, further isolating Lucid as a high-risk bet in a competitive landscape.

Bearish Technicals and ETFs Signal Short-Term Caution
• 200-day average: 2.4808 (below current price) • RSI: 34.33 (oversold) • MACD: -0.1076 (bearish divergence) • Bollinger Bands: 1.93–2.41 (current price near lower band)

Lucid’s technicals paint a grim picture for short-term traders. The stock is trading below its 200-day moving average and has entered oversold territory on the RSI, suggesting potential for a rebound but not a reversal. Key support levels at $17.36 (52-week low) and $16.50 (psychological round number) are critical to monitor. Given the absence of liquid options, leveraged ETFs like XLF (Financial Select Sector SPDR) or XLE (Energy Select Sector SPDR) could offer indirect exposure to sector sentiment shifts. Aggressive short-term traders may consider a bearish bias into the $16.50–$17.00 range, with a stop-loss above $18.50 to guard against a rebound.

Backtest Lucid Group Stock Performance

Lucid’s Freefall Continues – Watch for $17.36 Support and Sector Sentiment Shifts
Lucid Group’s 9.7% intraday drop underscores its ongoing struggle to balance production costs with market demand. With operating losses widening and production guidance slashed, the stock remains a high-risk proposition. Investors should closely monitor the $17.36 level—a breakdown here could trigger further selling. Meanwhile, Tesla’s -1.32% decline highlights broader sector fragility. For now, a cautious approach is warranted, with a focus on key technical levels and sector leadership shifts. If Lucid fails to stabilize production and profitability, the $16.50 support could become a critical inflection point.