Lucid Posts Record Deliveries, But Can Gravity SUV Scale Fast Enough Without Expiring EV Tax Credit?

Lucid Motors Achieves Record Deliveries, But Challenges Loom for Scaling Gravity SUV Amidst Expiring Incentives and Demand Uncertainty

Lucid Motors just recorded its best quarter ever, delivering 4,078 vehicles in Q3 2025, marking a 46% year-over-year increase and its seventh consecutive delivery record. This surge, part of an industry-wide EV boom driven by buyers rushing to claim the expiring $7,500 federal EV tax credit, suggests that Lucid’s long-delayed production ramp for its Gravity SUV is finally gaining traction. However, the luxury EV startup faces significant challenges around scaling production, sustaining demand without federal incentives, and achieving profitability, raising questions about whether this progress is fast enough.

Record Quarter Fueled by Expiring EV Tax Credit

Lucid’s impressive Q3 performance was not isolated, reflecting a broader trend in the EV market.

• Lucid’s Growth: Delivered 4,078 vehicles in Q3 2025, up 23% from Q2, bringing its year-to-date total to 10,496 vehicles.
• Industry-Wide Boom: EV makers including Tesla, Ford, GM, and Rivian all reported strong quarters, with industry-wide EV sales hitting an all-time high of over 410,000 units in Q3.
• Incentive Driven: This surge was largely attributed to buyers accelerating purchases to qualify for the $7,500 federal EV tax credit before its expiration on September 30.
• Lucid’s Strategy: While Lucid’s vehicles didn’t qualify for the full credit on cash sales, the company ingeniously structured leases to pass the savings along, a strategy that proved effective during the incentive period.

Gravity SUV Taking Shape: Lucid’s Hope for Broader Appeal

The long-awaited Gravity SUV is seen as Lucid’s crucial next step to expand its market reach.

• Production Ramp-Up: The uptick in deliveries likely reflects the gradual production ramp-up of the Gravity SUV, Lucid’s second model after the Air sedan. Production started late last year at its Arizona facility, with CEO Peter Rawlinson noting “significant progress” in Q3 due to a second production shift.
• Expanded Market: Executives view the Gravity as key to reaching a broader audience, with the three-row luxury SUV targeting a market six times larger than that of the Air sedan, capitalizing on America’s strong demand for large luxury SUVs.
• Marketing & Partnerships: Lucid is heavily investing in marketing, including a campaign starring Timothée Chalamet. A recent deal to supply 20,000 Gravity SUVs to Uber for an autonomous taxi partnership could also help bolster demand.

Persistent Production Challenges and Market Headwinds

Despite recent gains, Lucid continues to grapple with significant operational and market challenges.

• Production Delays: The Gravity rollout was slowed earlier in the year by supply chain issues, notably a shortage of Chinese permanent magnets affecting the industry.
• Revised Forecasts: Lucid’s 2025 production forecast now stands between 18,000 and 20,000 vehicles, slightly below earlier targets, with analysts expecting a final figure closer to 17,800.
• Scale and Profitability: These numbers underscore Lucid’s biggest hurdle: achieving economies of scale. High production costs and limited capacity make profitability elusive, despite technological praise for both the Air and Gravity.
• Demand Generation: Lucid has resorted to discounts and lease deals to attract customers, especially as high interest rates make luxury EVs harder to sell.

The Post-Incentive Landscape: A Looming Slowdown?

The expiration of the federal tax credit poses a significant threat to Lucid’s current momentum.

• Expected Slowdown: The accelerated purchases in Q3 suggest that the fourth quarter could see a weaker performance across the entire EV industry, including Lucid, as the incentive is no longer available.
• Uphill Battle: Without the tax credit, Lucid faces an even tougher challenge to maintain demand and achieve its sales targets.

Lucid’s Future: Scaling, Pricing, and New Models

Lucid’s long-term viability hinges on its ability to rapidly scale Gravity production and introduce more affordable models.

• Sustainable Volume: The key challenge is to reach a sustainable production volume and competitive price point for the Gravity.
• Mid-Size EV: The company’s next major move is a mid-size EV expected to start around $50,000. If it arrives on schedule, this model could significantly broaden Lucid’s customer base.

While Lucid’s record quarter offers genuine signs of progress after years of delays and skepticism, the true test will come as the market adjusts to a post-federal-incentive environment. The Gravity SUV has given Lucid a much-needed lift, but sustained success will require more than just a single strong quarter.

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