Investors in Lucid Group (LCID -5.25%) are feeling nervous. The electric vehicle (EV) stock fell further today, dropping to a low of 6.6% in early-morning trading. Lucid shares were still trading 5% lower as of noon ET Wednesday.
Lucid reported record quarterly deliveries earlier this month and is about to open bookings for its Gravity SUV for customers in Canada. Yet investors fear the EV maker could face growth challenges under the Trump administration.
Soon after taking the oath of office on Monday, Donald Trump revoked 78 executive orders signed by his predecessor, Joe Biden. That included a non-legally binding executive order from 2021 signed by Biden, which targeted 50% of new cars sold in the U.S. to be electric by 2030.
Trump also froze the release of remaining funds from the $5 billion funding the previous government committed to boosting the EV charging industry in the U.S. Furthermore, Trump said his administration would consider removing the $7,500 federal tax credits available on purchases of some EVs.
While none of this bodes well for the EV industry, Trump's anti-EV stand could make growth an even bigger challenge for companies like Lucid that are still trying to push production and sales and turn profitable.
Lucid will release its fourth-quarter numbers on Feb. 25. Last quarter, the company reported a massive net loss of nearly $950 million on revenue of $200 million. Lucid, however, cut costs and boosted its liquidity to more than $5 billion as of the end of Q3, thanks to a fresh infusion of funds from its largest shareholder -- Saudi Arabia's sovereign public fund, the Public Investment Fund (PIF) -- and through share sales.
Lucid is now pinning hopes on its Gravity SUV, which should soon start contributing to its top line. Yet while Biden's climate change agenda incentivized EV makers to produce more cars and buyers to switch from gas-powered vehicles to EVs, Trump could have a reverse effect on the EV industry. That makes Lucid stock a riskier bet than what it appeared until two days ago, when Trump was yet to return to the Oval Office.
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