Is Lucid Eating Tesla's Lunch?

The automotive industry is highly loyal, and one of the biggest challenges is "conquesting" consumers, which is simply one brand taking a customer from another. Since Tesla (TSLA 22.25%) vehicles hit the roads, the company has thoroughly dominated the U.S. market in sales volumes, but a recent backlash against the once unflappable brand may have sent consumers fleeing to a competitor you might not expect: Lucid (LCID 9.91%). Lucid's interim CEO made some very intriguing comments recently, and investors should take note of them. Big words from a small company In just about every measure possible, Tesla dwarfs its smaller rival Lucid, but that hasn't stopped a recent uptick in consumers swapping brands, according to Lucid's interim CEO Marc Winterhoff. "Tesla buyers always were the source of our sales because they were already used to using electrical drivetrains, and they look for an opportunity to have something else, something better," Winterhoff said, according to Yahoo Finance. "And now, with recent changes, obviously, since the beginning of the year, we see a clear uptick of interest in Lucid from Tesla buyers because they're looking for another option." Of course, Winterhoff is alluding to the brand awareness faux pas Tesla has faced this year. Tesla CEO Elon Musk, with his vocal support of President Trump and new role as the White House's DOGE commission, has seemingly driven away some of Tesla's customer base, leading to a rare sales decline for the company. That, in combination with, or perhaps the reason for, slower than expected sales of the new Model Y, has hammered Tesla's stock, which is down 43% year to date as of this writing. The good news, or bad news, depending on which side you find yourself backing, is that Lucid's recently launched Gravity SUV could ramp up the pressure on its rival. That's because demand for SUVs in America is still high, and the Gravity price tag checks in lower than its Air sedan at roughly $79,900. In fact, then-CEO Peter Rawlinson explained that the Gravity would enter a market that's six times larger than that of the Air sedan. First-quarter delivery data seems to back up the notion that Lucid is gaining momentum, perhaps at Tesla's expense. Winner, winner Lucid announced its best-ever quarter for deliveries, recently checking in at 3,109 vehicles. That mark was good for a 58% gain from the prior year and slightly ahead of its previous record of 3,099, set during the fourth quarter of 2024. It's only going to get better throughout 2025 as production and deliveries of the new Gravity SUV ramp up. Lucid noted that it will resume consumer deliveries of the Gravity by the end of April. It had been producing vehicles for employees, friends, family, and showrooms for test drives. On the flip side, Tesla reported a 13% decline in deliveries during the first quarter as compared to the prior year. Many analysts blamed the previously mentioned political role of Elon Musk, as well as an aging lineup and shortages of the freshened Model Y. However, some are taking it a bit further with Stephanie Valdez-Streaty, director of industry insights for Cox Automotive. "Without a significant change in strategy to develop new products with widespread appeal, Tesla's high-water mark as an automaker may be in the past," she said, according to Automotive News. Is Lucid eating Tesla's lunch? Where there's smoke, there's fire, and it's clear that Tesla has hit a speed bump due to previously mentioned developments. Lucid has long claimed to have the most advanced EVs in the industry, and with the uptick in interest coming from Tesla owners jumping to Lucid, there may be truth to those claims. Ultimately, one quarter doesn't make a trend, and while Tesla has hit a decent-sized speed bump recently, it should recover just fine long-term. Right now it sure looks like Lucid finally has a little momentum, and some of it is certainly coming at Tesla's expense.