Building a company from the ground up in a capital-intensive industry is difficult to do. It is even more difficult when that industry has a small number of large and entrenched leaders. But this is exactly what Tesla (TSLA -0.30%) managed to achieve, effectively creating the electric vehicle (EV) market that exists today.
Lucid (LCID 2.87%) is trying to recreate that magic. It has a long way to go before it is anywhere near Tesla or other EV peers, like Rivian (RIVN 1.27%). Here's why.
Before Tesla, the notion of mass-producing electric vehicles was a dream. Electric vehicles were the play toys of auto enthusiasts and a fanciful talking point for environmental buffs. Tesla changed the dynamic by, literally, building the first mass-produced EVs. They started out as high-end cars that only the rich could afford, but the costs have dropped significantly over time as Tesla has ramped up production and broadened its vehicle lineup.
To put some numbers on what has transpired, in 2024 Tesla produced nearly 1.8 million EVs. This didn't happen overnight. A decade earlier, in 2014, Tesla was proud to highlight that it achieved "record" production in the fourth quarter of the year with 11,627 vehicles. That allowed the company to hit its full-year target for the year of 35,000 vehicles. There's a big difference between those two years.
Interestingly, Rivian, a high-end EV truck maker, is closer to where Tesla was 10 years ago. It produced roughly 49,500 of its EV trucks in 2024. That's actually an important number because Rivian's production numbers didn't change materially between 2023 and 2024. In fact, the number fell from around 57,000. What happened? Rivian shifted from ramping up production to cutting costs.
This brings the story back to Lucid. In 2024, Lucid proudly proclaimed that it produced roughly 9,000 of its EVs. The goal for 2025 is to double production to 20,000. But right now it is producing about a fifth of the cars that Rivian makes and just 0.5% of the cars Tesla makes in a year. Relatively speaking, Lucid is really just at the beginning of the process of building a car company.
Rivian, by comparison, has achieved significant enough scale on the production front that it can now start to work on turning a profit. That's a big deal because until now it has simply been dumping money into ramping up production as quickly as possible. Tesla, meanwhile, is far beyond the point of cutting costs and is now a sustainably profitable company. It is actually competing directly with the legacy automakers. In fact, the legacy automakers have had to shift gears and are themselves trying to catch up to Tesla on the EV front.
Where does that leave Lucid? It is clearly well behind the EV pack, since both Tesla and Rivian are far more developed businesses. But that's not the only competition, since auto giants like Ford Motor Company and General Motors are also ramping up their EV production, too. And all of the other competitors have more developed sales systems on top of more developed production capabilities.
Tesla is, at least for now, the king of the EV space, with profits to support its long-term growth plans. Rivian is doing its best to play catch-up, but that's being supported by a quickly dwindling cash hoard of around $7.7 billion. Lucid is even further back in the EV race and its balance sheet only has around $4 billion in cash on it.
Could Lucid manage the feat of becoming the next Tesla? Maybe, but it is a high-risk bet for investors to make. The company has achieved a lot, but it has to achieve a lot more before it is anywhere close to the competition.
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