This past week has been nothing short of chaotic for stocks within the electric vehicle (EV) sector and broader financial markets. As of early Friday morning, the Nasdaq Composite index had surged by an impressive 5.4% for the week. This surge is largely attributed to an extraordinary rally on Wednesday that sent shockwaves through the market.

Among the standout performers in the EV arena is Lucid Group (NASDAQ: LCID), whose shares have seen a remarkable increase of 10.5% during this timeframe, as reported by S&P Global Market Intelligence. Much of this growth appears to be linked to ongoing challenges faced by Tesla, the leading player in the EV market. However, potential investors should remain cautious, as there are indicators suggesting that Lucid may encounter hurdles in the near future.

In a significant move, Lucid has recently begun sales of its new Gravity SUV, aiming to capture a growing segment of the market. Reports indicate that demand for the Gravity has surged, potentially fueled by consumer dissatisfaction with Tesla CEO Elon Musk, particularly in relation to his recent political engagements. Marc Winterhoff, Lucid's interim CEO, expressed optimism, stating, 'We see a clear uptick of interest in Lucid from Tesla buyers, because they're looking for another option,' in an interview with Yahoo! Finance.

In addition to expanding its product offerings, Lucid is also planning to boost its production capabilities. The company has announced intentions to acquire additional manufacturing facilities from the now-bankrupt electric heavy truck manufacturer Nikola, a move that awaits approval from bankruptcy court.

As Lucid positions itself for growth, it is focusing on penetrating the Saudi Arabian market. The Saudi government is a significant stakeholder in Lucid, with its sovereign wealth fund, the Public Investment Fund (PIF), being the largest shareholder. The company has been shipping vehicles for final assembly and sale in Saudi Arabia, with over 600 units delivered in the first quarter alone.

However, Lucid is facing increased competition as Tesla has also turned its attention to the Saudi market. This week, Tesla held a launch event in Riyadh, introducing its first showroom and service center to the region. The entry of Tesla into the Saudi market could potentially undermine Lucid's ambitious growth plans in this lucrative area.

The outlook for Lucid remains uncertain. The company is still operating at a loss and is heavily reliant on the success of its Gravity SUV to boost sales. Investors should be mindful of this precarious situation, as it may lead to continued volatility in the stock price, potentially offsetting the significant gains made this week.

Before making any investment decisions regarding Lucid Group, potential investors should weigh their options carefully. Notably, the Motley Fool Stock Advisor analyst team has recently compiled a list of what they consider the ten best stocks to invest in at presentand surprisingly, Lucid Group did not make the cut. These chosen stocks are believed to have substantial potential for growth in the coming years.

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