Shares of Lucid Motors dropped more than 8% by midday Monday, extending losses from Friday and paring gains from a 36% rally on Thursday that followed the company’s announcement of a partnership with Uber and autonomous driving startup Nuro.
Lucid’s shares initially surged nearly 60% to $3.69 following the announcement.
However, the absence of detailed disclosures regarding the financial impact of the Uber deal — beyond the $300 million investment — and the company’s 1-for-10 reverse stock split triggered a subsequent sell-off, with shares retreating by 25% in the days that followed.
As of the time of writing, the stock remains up approximately 22% from levels prior to last Thursday’s announcements.
Under the agreement, Uber committed to invest $300 million in Lucid and purchase 20,000 units of the company’s Gravity SUV, though pricing details were not disclosed.
CNBC‘s Mad Money host Jim Cramer cast doubt on the significance of the deal during Monday’s broadcast, suggesting the investment lacked the scale or strategic depth needed to materially shift Lucid’s outlook.
“I mean I, you know could, when I drove a Lucid, it’s absolutely a terrific car. And that’s the extent of what you should do with it. Drive it,” Cramer said.
Comparing the Uber partnership to Volkswagen Group’s multi-billion-dollar investment in Rivian, Cramer described the German automaker’s strategy as a stronger show of commitment.
Volkswagen in June last year said it would invest up to $5 billion in Rivian as part of a new joint venture focused on electric vehicle architecture and software. The automaker later increased the total commitment by 16% to $5.8 billion.
“I think that you need a commitment, like the VW [Volkswagen] commitment to Rivian is extraordinary,” Cramer said.
“And it still hasn’t, still Rivian is back to where it was [inaudible]. That’s an open ended check from one of the biggest, the biggest car company. “So I don’t think that Uber, it’s a dalliance, it’s a dalliance. It’s fun but it’s prurient.”
Cramer also raised concerns about the underlying financial health of EV startups.
“I don’t want these. I think that these are all. . .you don’t want to be in them. They don’t have balance sheets to be able to handle what it takes to be a car…Although Lucid comes close to being a DeLorean.”
The remarks follow Cramer’s earlier criticism of Lucid in May, when a viewer on CNBC’s Mad Money asked whether Lucid was a long-term investment or part of an EV bubble.
“You’re 21, you’re 21… Let’s put our money with something that is going to make a little more sense than Lucid,” Cramer said.
“I think that if you wanted to be in that area, if you wanted to be in that kind of progressive area, you might go with Rivian. I think Rivian is better than Lucid,” he added.
Year to date, Lucid shares are down 7.50%, while Rivian stock has gained 3.30%.
Lucid, which went public via a merger with Churchill Capital Corp IV in 2021, has seen its shares plunge about 95% from its post-SPAC peak.
The stock hit an all-time low of $1.93 last November, shortly after the company announced a $1.67 billion capital raise through a public offering.
Rivian, which also listed in 2021 amid a broader EV boom, once traded near $180 per share. The stock has since declined around 90% from its high.
