Beware of EV Stocks and Lucid Motors

When the electric vehicle stock bubble burst in 2022, only Tesla (TSLA) recovered somewhat. Rivian (RIVN) and Lucid (LCID) did not. The industry faces a worsening environment ahead.The U.S. government is phasing out tax credits that lowered the price of EVs. Without the assistance, consumers are less compelled to buy an EV. Instead, they are choosing a hybrid or a gas-powered vehicle.Tesla’s stock is mostly unreactive to the company’s quarterly sales declines. With its “Meme” trade status, traders are betting that its AI developments, self-driving software, and cyber cab prospects will more than offset slowing sales.While shares are in a $300 - $350 trading range, TSLA stock trades at a P/E of 185 times. Its market capitalization is $1.03 trillion.After markets closed on Thursday, Lucid said it would implement a 1-for-10 reverse stock split. This cuts its share count down from 15 billion to 1.5 billion, as of Aug. 29, 2025. Shares will trade split-adjusted on Sept. 2.Shareholders will see their share count fall by 1/10. This removes the risk of a delisting. Stock exchanges usually issue a delisting warning if the stock falls below $1.00 to $2.00 a share for 30 straight days. Unfortunately, Lucid’s poor prospects suggest that the stock will keep falling. Assuming it trades at $20 on Sep. 2 after the reverse split, the share price may continue losing value.Short-sellers hold a 29.84% short float against LCID stock.