At the heart of almost every electric vehicle (EV) battery lies synthetic graphite, a crucial component that powers charging cycles, boosts battery life, and fuels performance. Control over this critical material is becoming a strategic imperative for EV makers as a result. Plus, with China dominating graphite exports, the U.S. push for domestic materials is a strategic move.

That’s where Lucid’s new deal with Graphite One (GPHOF) comes in, as the company just inked an agreement to source U.S.-made graphite, reinforcing its supply chain. This is not just about raw materials – it is about staking ground in a high-stakes energy war, buying control, resilience, and a future edge.

For investors betting on domestic resilience and next-gen EVs, does this deal make LCID stock a buy even if the stock is hovering near its YTD low?

About Lucid Motors Stock

Headquartered in California, Lucid Group (LCID) is a Silicon Valley-born innovator redefining electric mobility. With the record-setting Lucid Air and the bold new Gravity SUV, the company blends cutting-edge tech, sleek design, and efficiency. Assembled in its advanced Arizona facility, Lucid is pushing the EV frontier for performance, sustainability, and global impact.

Lucid’s journey from market darling to underdog has been a rough ride. The stock has declined 87% over the past three years, weighed down by cash burn and intense competition. 2025 has been turbulent, with shares sliding nearly 30% on a YTD basis.

But with a $6.6 billion market cap, the EV maker now sits in the territory of high-risk, high-reward, where a strategic turnaround could flip the script and unlock multi-bagger potential.

Lucid’s shares may be bleeding red in 2025, but its valuation tells a layered story. Priced at 8.27 times its sales, it is pricier than its peers yet cheaper than its historical average. For investors, the valuation straddles a fine line between overhype and underappreciation.

A Closer Look at Lucid’s Q1 Results

Lucid’s Q1 earnings report, released May 6, painted a nuanced picture of progress amid pressure. Revenue climbed 36% year over year to $235 million but still missed Wall Street’s mark. While its gross margin improved, it remained deep in the red at negative 97.2%, highlighting just how expensive it is to build its premium EVs – costing nearly double what it sells for.

Adding pressure, R&D and SG&A expenses alone were roughly 2 times the total revenue. Even so, its adjusted net loss narrowed to $619.8 million, or $0.20 per share, better than Wall Street’s forecasts.

Deliveries told a more upbeat story. Deliveries reached 3,109, up 58% annually, while production hit 2,212 units. On the financial front, Lucid ended the quarter with $1.85 billion in cash and total liquidity of $5.76 billion - fuel it claims will carry operations into the second half of 2026. Despite long-term debt of $2 billion, the company is leaning on scale and efficiency as it eyes a path to profitability.

During the Q1 2025 earnings call, CFO Taoufiq Boussaid noted that current liquidity excludes potential loans from the Saudi Industrial Development Fund or grants from the Ministry of Industry. While some green energy players may falter in the coming years, Lucid’s deep ties to Saudi Arabia’s sovereign wealth fund offer rare financial insulation. The “Saudi backstop” continues to serve as a lifeline for Lucid’s long-term ambitions.

Analysts tracking Lucid are optimistic, estimating fiscal 2025 losses to shrink by 27.2% to $0.91 per share.

Powering EVs with Domestic Resources

For Lucid, the multi-year deal with Graphite One is not just about securing graphite, it is about anchoring its future in a U.S.-controlled critical minerals chain. With production set to scale in Ohio and graphite mined from Alaska’s Graphite Creek, Lucid gains a rare edge. The timing syncs with Lucid’s own production ramp-up plans - 20,000 EVs planned for this year, scaling to 365,000 by 2030.

The company is also working with Syrah Resources (SYAAF), which will supply natural graphite active anode material processed in Louisiana. Paired with Graphite One’s Alaska-to-Ohio pipeline, Lucid now has multiple lanes feeding its battery ambitions with both natural and synthetic graphite.

While the company still faces uphill battles with profitability and production costs, a stable, American graphite pipeline helps reduce exposure to foreign markets and reinforces its made-in-America brand. For investors, this deal may hint at long-term resilience.

What Do Analysts Expect for Lucid Stock?

Analysts are playing it safe with LCID, giving a consensus rating of “Hold.” Out of 13 analysts covering the stock, two suggest a “Strong Buy,” nine recommend a “Hold,” one advises a “Moderate Sell,” and the remaining one analyst gives a “Strong Sell” rating.

Still, there’s room to accelerate. The mean price target of $2.67 suggests the stock could surge by 23.6% from the current price levels. The Street-high target of $5 represents potential upside of 131.5%.