In July 2021, Lucid Group (NASDAQ: LCID) captured the attention of investors as it made its public debut following a merger with a special purpose acquisition company (SPAC). On the first day of trading, Lucid's stock opened at $25.24, and in a remarkable surge, it soared to a peak of $55.52 just four months later, more than doubling its initial value.

The substantial interest in Lucid was largely fueled by its leadership; Peter Rawlinson, the former chief engineer at Tesla, was at the helm, and the company appeared to be making significant strides in ramping up production of its premier luxury electric vehicle, the Lucid Air sedan.

At its pinnacle, Lucid's market capitalization reached an impressive $91.4 billion, a staggering figure that represented 150 times the $608 million in revenue it projected for 2022. During this time, the company promised ambitious delivery targets of 20,000 vehicles for 2022, escalating to 49,000 in 2023, and a whopping 90,000 in 2024. However, reality fell far short of these aspirations, as Lucid delivered only 4,369 vehicles in 2022, followed by 6,001 in 2023, and an estimated 10,241 in 2024.

Lucid attributed its disappointing sales figures to a myriad of challenges including supply chain issues, fierce competition in the electric vehicle sector, and an overall tough macroeconomic environment. The company also made headlines when it announced a delay in the launch of its second vehicle, the Gravity SUV, pushing it from 2023 to 2024. Adding to the unease surrounding the brand, Rawlinsons resignation in February cast further uncertainty on the company's prospects. As a result, Lucid's stock has plummeted, now trading at approximately $2.

Despite the steep decline in stock price, Lucids shares may not be considered a bargain just yet. Currently, the company boasts a market capitalization of $7.2 billion, which equates to 4.8 times the estimated $1.5 billion in sales for 2025. Although this valuation might seem reasonable given projected revenue growth rates of 86% in 2025 and an additional 87% in 2026, several macroeconomic factors including tariffs, ongoing supply chain disruptions, and high interest rates pose significant risks that could hinder these optimistic forecasts. Should these challenges prevent Lucid from achieving its targets, there is a possibility that the stock could stagnate or even decline further over the next two years.

On a more positive note, Lucid is unlikely to face bankruptcy in the near future. The company ended the year 2024 with a robust liquidity position of $6.14 billion, a financial cushion that it anticipates will support its expansion through the latter half of 2026. Moreover, Lucid enjoys substantial backing from the Saudi Arabian government, which holds over 60% of its shares through its Public Investment Fund (PIF).

However, its worth noting that another electric vehicle manufacturer, Polestar (NASDAQ: PSNY), may outpace Lucid in growth and potentially surpass its market capitalization within the next two years. Polestar, which originated as Volvo's racing team and high-performance brand, was established as a standalone electric vehicle maker in 2017 following a spin-off by Volvos parent company, Geely. Polestar gained public attention by merging with a SPAC in June 2022, and it is currently producing more vehicles while trading at a comparatively lower valuation than Lucid.