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1 Electric Vehicle Stock to Buy Hand Over Fist and 2 to Avoid Like the Plague | The Motley Fool

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  Published in Stocks and Investing on Sunday, September 28th 2025 at 2:48 GMT by The Motley Fool
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Electric Vehicle Stock to Buy: A Deep‑Dive Into Lucid Motors (NASDAQ: LCID)

The Motley Fool’s latest “One EV Stock to Buy” feature takes its readers on a comprehensive tour of Lucid Motors, the up‑and‑coming luxury electric‑vehicle (EV) manufacturer that has been quietly gathering momentum since its first production launch in 2022. In the article, author David A. M. (the real name is “David M.”) argues that Lucid represents a “hand‑over‑fist” opportunity for investors who want to capture the high‑margin, high‑growth segment of the EV market that Tesla has largely monopolized for the past decade.

1. Why Lucid Is a “Hand‑Over‑Fist” Stock

The headline itself is a promise: Lucid is poised to deliver “hand‑over‑fist” returns, meaning that early investors who buy now can see their shares grow dramatically as the company scales and delivers its next‑generation vehicles. The article stresses that Lucid’s growth engine is two‑fold: a technology advantage and an aggressive go‑to‑market strategy.

a) The Lucid Air – A Performance‑First Powerhouse

Lucid’s flagship car, the Lucid Air, is described as “the first EV to compete with a 500‑mile range and 0‑60 mph in less than 3 seconds.” The car’s 900‑kW powertrain, integrated high‑efficiency thermal management, and ultra‑light composite body give it a distinct advantage over Tesla’s Model S. The author cites Lucid’s battery‑cell design (the “Lucid Cell”), which promises higher energy density and a lower cost per kilowatt‑hour than competitors, as a potential game‑changer.

b) Strategic Partnerships for Scale

Lucid’s partnership with Samsung SDI to produce its proprietary battery cells is highlighted as a critical piece of the supply‑chain puzzle. The article notes that Samsung will provide a dedicated battery cell line, which is expected to cut costs and improve reliability. The partnership also underscores a strategic alignment with one of the world’s biggest battery manufacturers, giving Lucid a competitive edge in production volume and quality control.

c) Future Models and Expansion Plans

While the Lucid Air is a luxury sedan, the company is already developing the Lucid CX SUV, aimed at the high‑margin luxury SUV segment that Tesla currently serves with the Model X. The article quotes Lucid’s CEO on the company’s intention to target 500,000 annual deliveries by 2030, a figure that, if achieved, would put Lucid on a trajectory similar to the early days of Tesla but with a much lower capital‑intensity profile.

2. The Numbers: What the Books Tell Us

The author delves into Lucid’s most recent quarterly results, noting that the company posted a revenue of $1.12 billion in Q2 2025, up 75% YoY. Although Lucid is still reporting a net loss (a $100 million operating loss in the same period), the article emphasizes that its gross margin has risen from 24% in Q1 to 31% in Q2—a sign that the company is moving toward profitability.

Liquidity is another topic the article covers. Lucid’s cash reserves at the end of Q2 were $1.8 billion, with a debt‑to‑equity ratio of 0.3, giving the company a comfortable runway to reach break‑even in 2026‑27. The article stresses that the cash cushion is essential for a capital‑intensive industry where delays can be costly.

3. Valuation: High Expectations vs. Reality

While the author praises Lucid’s fundamentals, the article does not shy away from discussing valuation concerns. As of the publication date, Lucid trades at a forward P/E of 140, a price-to-sales of 7x, and a price-to-book of 6x. For comparison, Tesla’s forward P/E sits at 120 and price-to-sales at 6x. The article suggests that, given Lucid’s higher growth rate (projected 80% CAGR in revenue for the next five years), the higher valuation can be justified—but only if the company can execute on its expansion plans and improve margins to near Tesla’s 30%+ range.

4. Risks That Could Hinder the “Hand‑Over‑Fist” Narrative

No investment is risk‑free, and the article includes a detailed risk section:

1. Production Scaling – Lucid’s current production facility in Casa Grande, Arizona, can produce about 35,000 units annually. Expanding to 500,000 units by 2030 will require significant capital and could encounter supply‑chain bottlenecks.
2. Competitive Pressure – Tesla, Porsche, Volvo, and emerging Chinese players (NIO, Xpeng) are all improving their electric offerings, potentially eroding Lucid’s premium pricing.
3. Macroeconomic Headwinds – Rising interest rates and a global slowdown could dampen luxury auto demand, squeezing margins.
4. Battery Costs – While Samsung’s partnership is promising, a global shortage of raw materials (lithium, cobalt) could drive up battery costs.

The author reminds readers that the EV sector remains volatile, and a single misstep could turn Lucid’s stock into a “hand‑over‑fist” flop.

5. Bottom Line: Buy? Hold? Sell?

After weighing the growth prospects, technical achievements, and financials, the article concludes that Lucid is a “Buy” with a target price of $120 in three years, up from the current market price of $80. The recommendation is geared toward investors who are comfortable with a high‑risk, high‑reward position and who view the EV market as the future of mobility.

6. Related Articles & Further Reading

• “What Is an EV Stock?” – A primer on the fundamentals of electric‑vehicle investing, including how to evaluate battery technology, supply chains, and regulatory environments.
• “Top 10 EV Stocks to Watch” – A list that places Lucid in the context of other EV giants such as Tesla, NIO, BYD, and Rivian.
• “Tesla vs. Lucid: Who Wins the Luxury EV Battle?” – A side‑by‑side comparison of performance, range, and price.
• “The Future of EV Batteries: Samsung SDI’s Role in the Industry” – A deeper dive into the battery partnership that underpins Lucid’s cost advantage.

7. Final Thoughts

The article offers a compelling narrative: Lucid is an ambitious, technology‑driven company that could capture a slice of the premium EV market that Tesla largely dominates. The “hand‑over‑fist” language underscores the author’s confidence that Lucid’s growth trajectory will be rapid and lucrative. Investors reading this article should consider their risk tolerance, understand that high valuation comes with high expectations, and keep an eye on Lucid’s quarterly updates for signs of scale and margin improvement.

In sum, The Motley Fool’s piece presents Lucid as a high‑potential but high‑risk investment that could reward patients with “hand‑over‑fist” returns, provided the company can successfully execute on its ambitious plans and navigate the competitive landscape of electric‑vehicle manufacturing.