Lucid Stock Falls After Record Deliveries. 3 Reasons Why.

Coming into Tuesday trading, Lucid stock was down about 20% so far this year and off about 30% over the past 12 months. (Getty Images)

Key Points

• Lucid reported record third-quarter deliveries of 4,078 vehicles, a 47% year-over-year increase, following Tesla’s near 500,000 deliveries.
• Ford and General Motors also saw strong third-quarter EV sales, with Ford up 30% and GM up 110% year over year.
• The $7,500 federal EV purchase tax credit expired at the end of September, potentially affecting fourth-quarter sales.

Everyone had an easy time selling electric vehicles in the third quarter. Now investor attention turns to the fourth quarter. Selling EVs will become more challenging without the $7,500 federal purchase tax credit.

On Monday evening, Lucid reported third-quarter deliveries of 4,078 vehicles, a quarterly record and a 47% year-over-year increase. The company’s numbers follow Tesla’s record third quarter. It delivered almost 500,000 vehicles globally.

Ford Motor and General Motors also posted strong EV sales. Ford sold almost 31,000 EVs to Americans in the third quarter, up 30% year over year, accounting for almost 6% of total car sales. GM sold almost 67,000, up 110% year over year, accounting for more than 9% of total car sales.

American buyers were rushing to get ahead of the elimination of the tax credit. It expired at the end of September as required under President Donald Trump’s tax and spending bill, which became law on July 4.

Lucid’s stock didn’t get a bump from the sales record, though. Shares lost 8.4%, closing at $22.01, while the S&P 500 and Dow Jones Industrial Average fell 0.4% and 0.2%, respectively.

There are several reasons for that. For starters, Wall Street was looking for closer to 5,000 deliveries, according to FactSet. Another reason is the loss of the tax credit. No one knows exactly how U.S. EV sales will turn out in the fourth quarter, but they will be lower than third-quarter sales.

Lucid makes many cars that were too expensive to qualify for the $7,500 tax credit, but any EV could qualify for the credit if it was leased. It was a loophole in the system for buyers of more expensive cars.

A reverse stock split the company completed in early September may also be an issue. Investors don’t like them. Traditional splits can be taken as a signal that management expects gains in the future, while reverse splits can be seen as signaling the opposite.

Write to Al Root at allen.root@dowjones.com