The next few years should be pivotal for Lucid Group (LCID 3.49%). The company recently onboarded a new CEO, started production on its new Gravity SUV platform, and announced several new vehicles, the first of which is expected to start production in late 2026.
But what about the next 10 years? Keeping an eye on the long term is critical for investors. And the decade ahead might hold more surprises than you’d expect.
Lucid needs to get its new vehicles to market fast
Last week, Lucid opened a new research and development hub in Arizona. The company had previously purchased the facilities from Nikola Corporation, a defunct EV start-up. “These new facilities provide Lucid with immediate and substantial capacity for advanced manufacturing activities, as well as developing product innovations and testing components and systems,” a company representative noted.
There was a small nugget of surprise in the announcement, however, that had nothing to do with the facilities themselves. “Inside of this building are the first prototypes of a midsize SUV that will be priced under $50,000,” one reporter revealed. Lucid’s new CEO, Marc Winterhoff, confirmed that the location would be responsible for building the first iterations of these new models, saying that there will be “a pilot line where we build the first vehicles for our midsized platform.”
These revelations were interesting because they are the first real updates we’ve gotten about these new models in many months. Lucid began teasing three new mass market vehicles last summer, but updates have been hard to come by. Earlier this year, Lucid’s former CEO stressed that these new models will finally allow the company to “compete directly with Tesla.” He predicted the company would eventually sell more than 1 million vehicles per year by the early 2030s. But apart from optimistic comments like these, details have been scarce.
Recent surveys show that a big majority of Americans are aiming to spend less than $50,000 on their next car purchase. To gain scale and reach profitability, getting these new affordable models to market will be critical for Lucid. We still don’t have enough details to be confident in management’s production timeline of late 2026. But expect these new models to be the centerpiece of Lucid’s growth over the next two to five years. Looking beyond this time frame, however, Lucid’s growth may not include selling vehicles at all.
Image source: Getty Images.
Lucid’s future might not involve selling cars
Making cars today involves significantly more technology than the past, especially when it comes to software. Complex software architectures are required not only for basic vehicle operation, but also emissions controls, safety features, and self-driving capabilities. Currently, many carmakers outsource much of this software stack to a list of third-party vendors. That adds significant cost and complexity. When Volkswagen agreed to invest $5.8 billion into a joint venture with EV maker Rivian, the focus wasn’t making cars, but in using Rivian’s unique software stack to streamline Volkswagen’s production timelines.
As a tech-focused EV maker, Lucid has also developed its own software stack, one that Lucid’s management team believes could revolutionize the industry. The company has already begun licensing its technology to other automakers, helping them reduce manufacturing costs and improve vehicle efficiency. Lucid’s CEO recently stated that most of Lucid’s long-term business should come from tech licensing, not car manufacturing. “I’d love it to be 20-80. Twenty percent doing cars, 80% licensing,” he revealed. “Because the vision I have for Lucid is: Just as there’s an Intel inside your laptop, there’s a Lucid inside a Honda or a Toyota.”
Making cars today simply provides Lucid with an ability to showcase this technology. And given that software typically has higher profit margins and recurring revenues than car manufacturing, this segment of the business is very promising. A decade from now — at least if Lucid’s management team gets its way — expect Lucid to be more of a software business than a manufacturer.
Ryan Vanzo has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Intel. The Motley Fool recommends Volkswagen Ag and recommends the following options: short August 2025 $24 calls on Intel. The Motley Fool has a disclosure policy.
