Can Lucid Group (NASDAQ:LCID) successfully compete with much bigger and more famous electric vehicle manufacturers? Recent results don’t look good for Lucid, and since the company isn’t ambitious in its EV production goal, financial traders should be cautious with LCID stock.

As you may be aware, Lucid’s vehicles are so expensive that they don’t qualify for the $7,500 tax incentives that other EV makers are taking advantage of. Consequently, the company announced its own $7,500 “EV credit” on the purchase of select Lucid Models. However, this isn’t backed by government funding.

This is just one sign among many that Lucid Group is scrambling to compete in a challenging EV market. The company isn’t completely hopeless, but until conditions improve, Lucid’s shareholders should expect a bumpy ride.

What’s Happening With LCID Stock?

Sadly, LCID stock is a textbook example of the pop-and-drop cycle that many hyper-growth stocks have exhibited since 2020. The Lucid Group share price is down considerably since late 2021 and is struggling to regain the crucial $10 level.

The $7,500 “EV credit” might have boosted the confidence of some investors, but this isn’t the right time to consider a long position. At its current trajectory, Lucid’s capital position could dwindle down to nothing.

That might sound like an exaggeration but consider this: as of Dec. 31, 2021, Lucid Group had cash and cash equivalents totaling $6.26 billion. A year later, that figure shrank to just $1.74 billion.

It’s also problematic that Lucid still isn’t profitable, and one data point, in particular, might be a deal-breaker for some investors. Lucid Group’s loss from operations deepened from $485.68 million in the year-earlier quarter to $749.74 million in Q4 2022.

Lucid’s EV Production Target Is Underwhelming

On top of all that, investors should think about Lucid Group’s production target. Analysts expected Lucid to aim for 21,000 vehicles this year, but Lucid ended up only guiding for an EV production range of 10,000 to 14,000 vehicles.

Clearly, Lucid Group’s management knows that the company’s not in a strong enough position to target 21,000 EVs. Surely, they’re taking Lucid’s deteriorating capital position into account.

Besides, Lucid only produced 7,180 vehicles produced last year. Worse yet, the company reportedly only delivered around 4,400 EVs in 2022 or roughly 60% of what Lucid Group produced.

Sure, the company might try to spin its 10,000-to-14,000 vehicle-production target range as ambitious. Yet, informed investors can ask themselves whether Lucid Group is really aiming high, or only falling short.

You Don’t Have to Make a Move Now with LCID Stock

Don’t get the wrong message here. LCID stock gets a “D” rating, not an “F,” and there is hope for a brighter future for Lucid Group.

A sensible strategy would be for investors to watch for upcoming announcements from Lucid. There’s no need to jump into a hasty trade now, and prospective shareholders can simply choose to look for improvements in Lucid Group’s capital position and EV delivery figures.

On the date of publication, neither Louis Navellier nor the InvestorPlace Research Staff member primarily responsible for this article held (either directly or indirectly) any positions in the securities mentioned in this article.