Lucid Group Inc., the electric vehicle manufacturer backed by Saudi Arabia’s Public Investment Fund, recently carried out a one-for-ten reverse stock split in a bid to shore up its share price and improve market perception. The split, which reduced the number of outstanding shares from roughly 3.07 billion to about 307 million while also cutting the company’s authorized shares from 15 billion to 1.5 billion, officially took effect on August 29. Trading on a split-adjusted basis began on September 2, with fractional shares settled in cash rather than additional stock.
The market reaction was swift and negative. Lucid’s stock tumbled more than 10 percent on its first day of split-adjusted trading, closing near $17.66 and hitting a new all-time low. The sell-off was fueled by investor skepticism, as reverse splits are often interpreted as a signal of underlying weakness. Instead of restoring confidence, the move appeared to confirm fears that Lucid is struggling to balance ambitious production goals with mounting financial losses.
Lucid’s recent earnings report did little to calm nerves. The company posted second-quarter revenue of $259 million, missing expectations, while reporting a staggering $855 million net loss. Management also trimmed its production guidance for 2025, projecting between 18,000 and 20,000 vehicles, down from earlier targets. At the same time, the broader electric vehicle market has shown signs of slowing in the U.S., with penetration hovering around 7 to 8 percent of new car sales—well behind China and Europe. Combined with intensifying competition, these pressures have left Lucid struggling to scale effectively.
Company executives argued that the reverse split was designed to lift the per-share price and make the stock more attractive to institutional investors, many of whom avoid securities trading below $5. They also pointed to long-term initiatives, including new models expected in 2026 and a robotaxi project developed with Uber and Nuro. Still, analysts remain cautious. Of the 16 covering the stock, only one currently rates it a “Buy,” with an average price target of around $23.
Looking ahead, Lucid faces a critical test when it reports third-quarter earnings in November. Analysts are forecasting a steep quarterly loss of about $2.41 per share on $385 million in revenue. Unless Lucid can demonstrate real progress in production and sales, the reverse stock split may be remembered less as a strategic turning point and more as a temporary lifeline that failed to restore investor confidence.
