Autonomous Fleets And EV Platforms Will Redefine Global Mobility

Key Takeaways

• Strategic partnerships, technological leadership, and domestic supply agreements strengthen Lucid's market position, operational resilience, and future margin potential.
  
• Expanding into high-volume, lower-cost EVs and leveraging premium branding is set to drive broader market reach, revenue growth, and long-term profitability.
  
• Persistent losses, external funding dependence, competitive and supply chain pressures, and unfavorable policy shifts cloud Lucid's path to profitability, heightening long-term financial risk.

Catalysts

A technology company, designs, engineers, manufactures, and sells electric vehicles (EV), EV powertrains, and battery systems.

• The newly announced Uber and Nuro partnership, including a planned $300 million Uber investment and a commitment to deploy at least 20,000 Lucid Gravity vehicles as robotaxis over six years, is expected to open a large and fast-growing autonomous fleet market to Lucid, driving significant revenue expansion and potential margin improvement via technology licensing and high-volume fleet sales.
  
• Lucid's accelerated vertical integration and securement of domestic supply agreements (e.g., with Graphite One and Panasonic) are reducing geopolitical supply chain risks, enabling more resilient production, cost control, and operational efficiencies that should support future gross margin improvement.
  
• The upcoming launch of Lucid's midsized EV platform in late 2026 targets a much broader customer base with lower-cost, high-volume vehicles, directly expanding Lucid's addressable market and providing operating leverage for stronger top-line revenue growth and improved net margins as scale increases.
  
• Advancements in powertrain and battery technology, such as the in-house Atlas Drive Unit and extended-range battery packs, position Lucid as a technology leader, enhancing product differentiation and pricing power, which can drive higher gross margins and earnings through premium offerings.
  
• Continued investment in global brand awareness-including high-profile partnerships and brand ambassadors-combined with rising consumer adoption of sustainable transportation, is projected to accelerate demand growth for Lucid's premium EVs, supporting both higher revenues and enhanced margin potential over the long term.

Lucid Group Future Earnings and Revenue Growth

Assumptions

• Analysts are assuming Lucid Group's revenue will grow by 82.4% annually over the next 3 years.
• Analysts are not forecasting that Lucid Group will become profitable in next 3 years. To represent the Analyst Price Target as a Future PE Valuation we will estimate Lucid Group's profit margin will increase from -329.1% to the average US Auto industry of 5.4% in 3 years.
• If Lucid Group's profit margin were to converge on the industry average, you could expect earnings to reach $306.4 million (and earnings per share of $0.08) by about August 2028, up from $-3.1 billion today.
• In order for the above numbers to justify the analysts price target, the company would need to trade at a PE ratio of 43.6x on those 2028 earnings, up from -2.4x today. This future PE is greater than the current PE for the US Auto industry at 17.9x.
• Analysts expect the number of shares outstanding to grow by 7.0% per year for the next 3 years.
• To value all of this in today's terms, we will use a discount rate of 12.32%, as per the Simply Wall St company report.

Lucid Group Future Earnings Per Share Growth

Risks

• Despite progress in ramping vehicle deliveries and partnerships, Lucid continues to report significantly negative gross margins (e.g., -105% in Q2 2025), compounded by tariff impacts and inventory impairments, which raises concerns about the company's ability to achieve sustained profitability-potentially weighing on net margins and future earnings.
  
• The company's heavy reliance on substantial external capital, combined with plans for a large convertible bond refinancing and a reverse stock split to maintain institutional investor access, exposes shareholders to continued dilution risk and interest expense burden, which could suppress EPS growth and valuation.
  
• Execution risks remain high around ramping new products, as seen with earlier supply chain challenges involving critical components like China-sourced magnets and ongoing vertical integration efforts; unresolved or recurring manufacturing bottlenecks could constrain revenue and delay margin expansion.
  
• Intensifying competition in the luxury and mid-market EV segments from both start-ups and legacy automakers, alongside possible industry-wide price compression, threatens Lucid's ability to command premium ASPs, directly impacting top-line revenue and gross profits as battery tech further commoditizes.
  
• Policy headwinds such as the elimination of the $7,500 EV lease credit beginning Q4 2025, shifting regulatory environments, and ongoing geopolitical volatility (especially around tariffs and battery supply chains) may reduce consumer demand, increase input costs, and create earnings uncertainty in the medium-to-long term.

Valuation

• The analysts have a consensus price target of $2.503 for Lucid Group based on their expectations of its future earnings growth, profit margins and other risk factors. However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of $7.0, and the most bearish reporting a price target of just $1.0.
• In order for you to agree with the analyst's consensus, you'd need to believe that by 2028, revenues will be $5.6 billion, earnings will come to $306.4 million, and it would be trading on a PE ratio of 43.6x, assuming you use a discount rate of 12.3%.
• Given the current share price of $2.34, the analyst price target of $2.5 is 6.5% higher. The relatively low difference between the current share price and the analyst consensus price target indicates that they believe on average, the company is fairly priced.
• We always encourage you to reach your own conclusions though. So sense check these analyst numbers against your own assumptions and expectations based on your understanding of the business and what you believe is probable.