Tesla (TSLA 9.74%) has been the role model for a host of electric vehicle (EV) start-ups. The reason is pretty clear, given that it has successfully traveled the path from a start-up with no product all the way to a full-fledged automaker competing, very competently, with the larger legacy brands. But is it worth buying Tesla or a company attempting to follow in its footsteps, like Lucid Group (LCID 1.84%)?

What has Tesla achieved?

From a big-picture perspective, Tesla has gone from a money-losing start-up to a sustainably profitable business. That's not a small task when you consider that it is building vehicles in a capital-intensive industry that is fiercely competitive. It was not a quick or easy path, and Tesla's business spans more than just making cars. However, today, it is one of the most important and closely watched automakers in the world.

Image source: Tesla.

One of the key numbers to consider when comparing Tesla to other electric car companies is its production and sales results. In the first quarter of 2025, it produced 362,615 EVs and sold 336,681. Those numbers are a fraction of what the legacy automakers produce and sell, noting that Ford sold 501,291 vehicles in the first quarter of 2025. However, it only sold 73,263 EVs (combining pure EVs and hybrid vehicles).

All in, Tesla is an industry heavyweight in a segment of the auto sector that is likely to see material growth for years to come. Noting that Ford and most of the other major legacy automakers are building EVs, too, pushed into it by Tesla's success, how much room is there for other pure-play EV makers?

Where is Lucid at in its development?

This is where a look at Lucid's production comes in. In the first quarter of 2025, Lucid produced 2,212 vehicles in its U.S. facility, with around 600 additional vehicles "in transit to Saudi Arabia for final assembly." It sold 3,109 vehicles in the quarter. Lucid is nowhere near Tesla when it comes to the development of its business. In fact, it hopes to produce only 20,000 vehicles in 2025, which is just a drop in the bucket compared to what Tesla made in the first quarter alone.

The distance that Lucid has to go before it is anywhere near Tesla is further highlighted by Lucid's financial results. In 2024, the company generated revenue of a little over $800 million from selling EVs. Building those EVs cost $1.7 billion. Then there are other costs to consider, like the nearly $1.2 billion in R&D spending and the SG&A expense of $900 million. Lucid is losing money hand over fist, and it is only appropriate for aggressive investors.

The thing is, a start-up losing money is pretty normal. The reason to buy Lucid is because you believe it could eventually grow into a company more akin to what Tesla is today. That's possible, but it won't be easy, and it won't happen quickly. So, only aggressive investors willing to make a long-term commitment should be considering Lucid over Tesla today.

Is Tesla a better buy?

However, there's a small problem with saying that Tesla has a better business than Lucid right now. That doesn't actually speak to whether or not Tesla's stock is worth buying. A steep sell-off has materially reduced Tesla's valuation, but it still has a price-to-earnings ratio of 116x versus mid-single digits for competitors like Ford. Tesla isn't just a carmaker, so some premium might be justified. However, the price-to-earnings (P/E) ratio is massively out of line with legacy automakers, and it is even kind of high for a technology stock, with the average tech sector P/E at something closer to 33x.

All in, conservative investors probably won't find Tesla or Lucid very attractive. If you find Tesla's business more attractive because it is further along in its development as a company and more diversified, you have to buy it while understanding that the stock is being afforded a high valuation.