Why Lucid Stock Is Soaring Today

Lucid (NASDAQ: LCID) stock is making big gains in Friday's trading. The electric vehicle (EV) company's share price was up 6.5% at 1:30 p.m. ET and had been up as much as 11.5% earlier in the day's session.

Lucid stock is climbing today following the company's announcement on X that the production of its Gravity SUVs had begun. Despite today's valuation pop, the stock is still down roughly 47% year to date.

Lucid stock gets a lift from Gravity production

Production on Lucid's Gravity SUVs has started at the company's manufacturing plant in Arizona. The Gravity is the company's first electric SUV. It offers more than 440 miles of travel range from a single charge and seats up to seven passengers. The push into the luxury EV market represents an important growth opportunity for the company, and investors will be watching to see how much demand there is for the new vehicle.

What's next for Lucid?

Lucid stock posted an operating loss of $770.5 million on revenue of roughly $200 million in the third quarter. The company produced 1,805 vehicles and delivered 2,781 vehicles in the period and closed out the quarter with cash and equivalents totaling roughly $1.89 billion. The company went on to raise an additional $1.75 billion in funding.

Even with the business using cash fast, Lucid should have enough funding to continue operating into 2026 without the need to raise additional capital. On the other hand, demand for the company's vehicles has come in weaker than anticipated over the last couple of years -- and that raises questions about the company's plans to scale up its business.

Lucid's path to profitability hinges on increasing vehicle demand and production to the point where the company can benefit from economies of scale and see production costs per unit decline. The launch of the Gravity SUV represents an important step in the company's strategy, and deliveries for the vehicle will be under the microscope over the next year.

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 $889,004!*

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*.

See the 10 stocks »

*Stock Advisor returns as of December 2, 2024

Keith Noonan 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.