Shares of luxury electric car maker Lucid Group (NASDAQ: LCID) surged 6% through noon ET Tuesday -- an even better performance than last week, when Lucid reported that second-quarter deliveries rose 70% year over year.
And what's driving Lucid stock higher today?
Oh, just an announcement that Lucid now has the most efficient electric vehicle (EV) on the planet.
Introducing the 2025 Lucid Air Pure
Admittedly, it's Lucid itself that made this assertion. In a press release this morning, Lucid claimed that "the new 2025 Lucid Air Pure is the most efficient and thus most sustainable vehicle made, with 420 miles of EPA-estimated range," a standard heat pump (to prevent temperature extremes from affecting range), and a price unchanged from last year at $69,900.
Range numbers are notoriously fuzzy, and not everyone agrees with Lucid's assertion. Over in China, BYD says it has an EV that can drive 1,305 miles without a recharging. (Its secret: It's a hybrid.) And a Car and Driver article earlier this year argued that the Air Pure's real-world range is closer to just 310 miles.
Still, Lucid argues that by translating each kilowatt hour of energy in its battery into five miles of range, the Lucid Pure sets a "landmark" for fuel efficiency that's better than any other EV on Earth. And that seems good enough for investors today.
Is Lucid stock a buy?
All the technical improvements in the world, however, won't make Lucid stock a success if the company can't produce and sell the cars at a profit. And for now, this remains Lucid's biggest problem.
Lucid racked up $2.7 billion in losses over the past year, and analysts polled by S&P Global Market Intelligence warn the company won't earn its first profit before 2030. The company's burning cash even faster than it's reporting losses -- $3.1 billion. With only $1.6 billion more cash than debt on its balance sheet, at the rate it's going, Lucid could be in a net debt position as little as six months from now.
That doesn't sound like a buy to me.
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Rich Smith has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends BYD Company. The Motley Fool has a disclosure policy.
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