Better EV Stock: Lucid vs. Tesla

U.S. EV sales rose 7% to 1.3 million last year but political headwinds from the Trump administration have rattled investor sentiment; within that context Tesla reported a soft quarter—automotive sales fell 8% to $19.8bn, revenue and EPS missed estimates and annual vehicle deliveries slipped to about 1.8m—yet it still controls roughly 18% of the global EV market and is positioning growth around a cheaper model and autonomy/robotics initiatives. By contrast, Lucid’s stock has plunged ~66% since 2021, the company posted a $2.7bn net loss in 2024 while selling premium Air and new Gravity models (starting near $70k–$80k), and CEO Peter Rawlinson has stepped down amid concerns its up‑market pricing and cash burn leave it vulnerable as rivals push cheaper EVs (Rivian targeting a $45k model). The author concludes Tesla is the more viable investment today—profitable and scalable despite a forward P/E of ~119—recommending a small starter position and adding on weakness, while Lucid remains a higher‑risk, capital‑intensive play.

Analysis

U.S. EV sales rose 7% to 1.3 million last year, but the article highlights that investor sentiment has been rattled by an unfriendly Trump administration stance toward EVs, creating policy risk even as underlying demand expanded modestly. This political backdrop amplifies downside risk for smaller, cash‑hungry OEMs while preserving optionality for scaled players.

Tesla reported automotive sales down 8% to $19.8 billion, with revenue and EPS missing consensus and annual vehicle deliveries of ~1.8 million representing the company’s first annual decline; management expects vehicle business growth in 2025. Tesla still holds ~18% of the global EV market, remains profitable, trades at a forward P/E of ~119, and is pursuing a lower‑priced model plus autonomy and robotics initiatives that tap into addressable markets estimated at $73 billion (robotics by 2029) and $2.3 trillion (autonomous vehicles by 2030).

Lucid’s stock has plunged ~66% since 2021 and the company posted a $2.7 billion net loss in 2024 (vs $2.8 billion in 2023) while selling high‑end Air sedans (~$70k entry) and the Gravity SUV (~$80k entry). CEO Peter Rawlinson’s exit and an interim CEO increase governance uncertainty, and Lucid’s upmarket pricing and heavy cash burn contrast with competitors moving toward sub‑$50k models (Rivian’s ~$45k crossover), leaving Lucid a higher‑risk, capital‑intensive proposition versus Tesla.

Key Decisions for Investors

• Initiate a small, staged position in TSLA rather than a full allocation given profitability, 18% market share and high forward P/E (~119); add into confirmed dips tied to delivery or pricing weakness
• Avoid increasing exposure to LCID until management transition solidifies and the company demonstrates sustained margin improvement or materially lower cash burn beyond the $2.7bn 2024 loss
• Monitor policy signals and U.S. EV sales cadence (1.3m units, +7%) and the launch/timing of a lower‑priced Tesla model and FSD/robotaxi progress as primary catalysts that could re‑rate the sector
• Prefer exposure to scaled EV/technology franchises or diversified EV baskets rather than concentrated bets on luxury EV start‑ups, and consider hedges for political/regulatory downside