Three and a half years after Tesla Chief Executive Officer Elon Musk warned that two US EV makers would go bankrupt unless they dramatically reduced costs.
A few months later, in a separate interview, Musk laughed at two other EV startups: Fisker and Nikola.
Fisker, founded by the automotive designer Henrik Fisker, filed for Chapter 11 bankruptcy two years later, in June 2024.
Nikola, the fully electric and hydrogen truck maker, followed earlier this year after running out of cash.
“The only American car companies that have not gone bankrupt are Tesla and Ford,” Musk said during a June 2022 interview with the Tesla Owners Silicon Valley fan club. “And unless something changes significantly with Rivian and Lucid, they will both go bankrupt.”
“I hope they are able to do something; but unless they cut their costs dramatically they’re in deep trouble,” Musk added at the time.
Since these remarks, Lucid shares plunged by about 94% while Rivian‘s stock price fell by 49%.
Lucid’s New All Time Low
Lucid Motors‘ shares fell to a new all-time low on Tuesday, resulting in a market cap of below $3.75 billion.
The stock dropped more than 2% in Tuesday’s morning session, falling below the previous record low of $11.46 reached on November 21.
The decline came as Tesla shares approached a new all-time high.
Since Musk’s comments, Lucid has faced several executive departures including CEO and Chief Technology Officer Peter Rawlinson, multiple production target cuts, and delays to the rollout of its second model, the Gravity SUV.
In February, when announcing Rawlinson’s departure to a new role, the Board said it had started a search for a permanent CEO.
However, there have been no updates since then from the Saudi-backed brand.
At the time of Musk’s warning, Lucid shares were trading at approximately the $180 level on an adjusted basis, accounting for the 1-for-10 reverse stock split executed in late August.
Rivian shares were trading at nearly $30 when Musk made his remarks. The stock reached an all-time low of $8.26 earlier this year and is trading at $18.12 as of press time.
Wall Street Cuts Targets
Four firms have reduced their price targets on Lucid since the company reported third-quarter financial results.
Benchmark trimmed its target to $30 from $70, Stifel cut to $17 from $21 while maintaining its Hold rating, and Cantor lowered its target to $21 on November 6.
Stifel said it expects “additional capital to be required over the next few years.”
Morgan Stanley cut its target to $10 from $30 earlier this month and downgraded the stock from Equalweight to Underweight.
The new target is equivalent to $1.00 prior to the reverse stock split. Analyst Andrew Percoco said the firm does not expect Lucid to reach gross profitability until 2028.
The analyst also flagged dilution risk, estimating Lucid will need to raise approximately $2 billion in equity by the second half of 2026 relative to its $4.6 billion market cap.
Losses Persist
Lucid posted a net loss of $978.8 million in the third quarter, a slight reduction from $992.5 million a year earlier.
The company has twice reduced its 2025 production guidance this year and is now focused on ramping Gravity output, which Chief Financial Officer Taoufiq Boussaid said last week will represent “the majority of our production and our sales” in the fourth quarter.
Interim Chief Executive Officer Marc Winterhoff said last week the company is funded through at least 2027 and will return to capital markets “when it’s opportune,” he said in an interview with Bloomberg.
Lucid disclosed in early November that its majority shareholder, Saudi Arabia’s Public Investment Fund, agreed to increase a delayed draw term loan credit facility from $750 million to approximately $2 billion.
PIF, the country’s sovereign wealth fund, holds a stake of roughly 60% in Lucid.
