RBC lowers Lucid price target to $10 after disappointing 2026 guidance

RBC Capital cuts Lucid's price target to $10, highlighting below-expected 2026 guidance and production revision, with market impacts.

Summary of the Update

RBC Capital lowered the price target for Lucid Motors to $10, maintaining the sector recommendation as Sector Perform. The outlook suggests a drop of about 2.7% based on Wednesday's close of $10.28.

The stock reacted partially, recovering some losses after two days of sharp decline. In the last trading session, Lucid had hit recent lows, falling to $9.12 before receding to $8.90 shortly after earnings.

Since its peak of $648.60 in early 2021, Lucid shares have lost a large portion of their value, falling approximately 98.4% to date.

Fourth Quarter Production and Results

Analyst Tom Narayan stated that despite the unfavorable gross margin, unit fundamentals appear to be improving, supporting the short-term downside view, but with a narrative of efficiency improvement.

Lucid reported $523 million in fourth-quarter revenue, more than doubling year-over-year. However, gross margins remained negative at 81%.

2025 Production and 2026 Outlook

The RBC was dissatisfied with the 2026 production guide and the production revision presented in Tuesday's report. In 2025, Lucid revised its total production downwards to 17,840 units, explaining that 538 vehicles had not passed final internal validation procedures.

This revision brings the annual production slightly below the 18,000-unit level that was in the November guidance, even though Lucid itself stated that the result is in line with a production target of approximately 18,000 vehicles.

For 2026, the company forecasts between 25,000 to 27,000 vehicles, which would represent an increase of 40% to 51% over the revised 2025 guidance. Even with growth, the range falls short of the market consensus of about 34,000 units from Visible Alpha.

New Models and Production Start

Lucid expects to start production of its third model—the first under the new mid-size platform—in late 2026. Interim CEO Marc Winterhoff told analysts there would be no significant numbers to report on the model's contribution to this year's guidance.

Production is expected to begin at Lucid's factory in Saudi Arabia, with the timeline described as slightly ahead of schedule. It is not yet clear if the car will also be produced at AMP-1 in Arizona.

The new mid-size platform should allow Lucid to enter a more accessible segment, with the initial price point situated close to the average price of new cars in the US, moving away from the strictly luxury spectrum where current models compete for space.

Autonomy and TAM Growth

Regarding autonomy, the analyst expressed concern that software revenue might remain limited in the short term, even as the robotaxi program moves forward. Winterhoff stated that the autonomy strategy targets highly competitive solutions for customer vehicles and for robotaxis, with rapid execution and contained additional capital.

The executive also cited an emerging global robotaxi market as a TAM opportunity of up to $700 billion by 2035. The roadmap cites end-to-end autonomy arriving with Gravity later this year, Level 3 (L3) in 2028, and L4 in 2029, starting with the mid-size vehicles.

The market is expected to track these advances with the Investors Day scheduled for March 12, when Lucid promises to clarify paths to profitability and technological evolution.

Invitation for Comments

What do you think of Lucid's new direction and the path to profitability? Leave your comment below with your predictions about the impact of the autonomy roadmap and the mid-size product strategy.