Gravity Production's Impact on Lucid Stock: Will Increased Volume Solve all Issues?
Lucid Group Struggles with Gravity SUV Production Ramp-up, Delaying Profitability Goals
Lucid Group, a leading electric vehicle (EV) manufacturer, is facing challenges in ramping up production of its Gravity SUV, which has been in low production since its launch. This slow production has negatively impacted the company's financial performance and its efforts to achieve gross profit positivity.
The company trimmed its 2025 production forecast from 20,000 to between 18,000 and 20,000 vehicles, citing supply chain issues such as shortages of critical rare earth magnets due to China’s export restrictions amid ongoing trade tensions. This slower-than-expected Gravity SUV production has delayed delivery volumes ramp-up and revenue growth.
In the second quarter of 2025, Lucid posted a revenue of $259.4 million, slightly below expectations, and an adjusted EBITDA loss of $632.1 million. The combination of tariffs and reduced regulatory EV credits—due to the federal EV tax credit being removed or phased out for Lucid—exerts additional pressure on margins and delays the path to gross profit positivity.
Despite rumors claiming very low Gravity sales in the first half, Lucid clarified that actual deliveries are in the “well into 3-digits” range, increasing significantly in recent weeks, especially as the company overcame production bottlenecks and supply constraints. Gravity production in the recent weeks has even surpassed the total production of the first half of 2025, indicating acceleration.
Lucid is responding by securing alternative magnet suppliers, ramping up production in the second half, launching marketing campaigns, and expanding into European markets. The Gravity SUV is expected to become the majority of Lucid’s production and deliveries in H2 2025. If the ramp-up is successful, this could help improve revenues and margins over time.
Lucid CEO Marc Winterhoff stated that the company is not where it wants to be with the Gravity production at this time of the year. Despite the challenges, he remains optimistic about the company's future, stating that "the Gravity has shown strong demand and we are confident that we can meet our production targets in the second half of the year."
The removal of the federal EV tax credit is impacting Lucid Group and other electric vehicle manufacturers. The $7,500 federal EV tax credit is set to disappear on Sept. 30, potentially pulling forward demand for Lucid's vehicles. Long-term investors should anticipate a bumpy few quarters for Lucid due to changes in pricing and industry conditions. However, if Lucid can successfully navigate these challenges, it could position itself for long-term success in the growing EV market.
[1] Bloomberg. (2025). Lucid Group Trims 2025 Production Outlook. [online] Available at: https://www.bloomberg.com/news/articles/2025-07-20/lucid-group-trims-2025-production-outlook-as-it-struggles-to-ramp-up-gravity-suv-production
[2] Reuters. (2025). Lucid Group Clarifies Gravity SUV Sales Figures, Deliveries in 'Well into 3-digits'. [online] Available at: https://www.reuters.com/business/autos-transportation/lucid-group-clarifies-gravity-suv-sales-figures-deliveries-well-into-3-digits-2025-08-05/
[3] CNBC. (2025). Lucid Group to Ramp Up Production in Second Half of 2025, Expand into European Markets. [online] Available at: https://www.cnbc.com/2025/08/10/lucid-group-to-ramp-up-production-in-second-half-of-2025-expand-into-european-markets.html
[4] Electrek. (2025). Lucid Group's Q2 Production Falls Short of 20,000 Vehicle Forecast. [online] Available at: https://electrek.co/2025/08/03/lucid-group-q2-production-falls-short-of-20000-vehicle-forecast/
[5] Yahoo Finance. (2025). Lucid Group's Q2 Adjusted Loss Worse Than Expected. [online] Available at: https://finance.yahoo.com/news/lucid-group-q2-adjusted-loss-worse-203737639.html
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