Despite a week of mostly growth, things have been looking grim for Lucid Motors (NASDAQ:LCID) lately. The trendy electric vehicle (EV) startup is battling a difficult economic landscape that only seems to be getting more complicated. While navigating it is difficult for many automakers, LCID stock just hit a low for the year, dipping as low as $2.38 per share. This signals that things are worse for it than some of its peers.

But even after hitting this negative milestone, Lucid is working hard to rebound. Shares are in the green today, currently up about 1% and slowly continuing to climb. For a company that has struggled so much lately, this type of resilience is noteworthy.

What’s Happening With LCID Stock

There’s no denying that the past six months have seen LCID stock fall significantly. It trades below the penny stock line, which has likely discouraged many investors. But its important to note that the recent declines that pushed Lucid to a 52-week low are not due to company-specific factors. Rather, they can be mostly attributed to problems facing the broader EV market. Let’s take a look at the factors that are weighing on most EV stocks.

Firstly, the popularity of EVs has been called into question lately amid surging hybrid vehicle sales. These fellow new-energy vehicles are also fuel efficient and typically come with fairly low sticker prices. This makes their popularity a threat to automakers who only build highly priced EVs, of which Lucid is a prime example. This trend has cast some doubt over companies like Lucid, whose growth depends on consumers wanting to purchase high-end luxury EVs.

Secondly, multiple EV players have announced layoffs lately. Tesla (NASDAQ:TSLA) just opted to reduce its global workforce by more than 10%, which will impact roughly 14,000 workers. Fellow EV startup Rivian (NASDAQ:RIVN) has implemented multiple rounds of layoffs just in 2024, including further reductions it announced last week.

Neither of these companies is Lucid. However, Tesla is the leader in the EV sector, and Rivian is one of Lucid’s closest peers. Therefore, it makes sense that bad news from both would push LCID stock down.

Some Good News

Even with the many problems facing EV stocks right now, there’s reason to believe Lucid may be destined for a turnaround. Citi recently resumed coverage of the company, setting a bullish price target of $2.90 for LCID stock. As ElectricVehicles.com reports, “the firm emphasises Lucid’s ‘strong’ electric vehicle (EV) technology although it raises concern on the execution risk for the upcoming model planned for late 2024 Gravity.”

Moreover, speculation continues to rise that a Lucid short squeeze could be coming. InvestorPlace contributor Faisal Humayun notes that while the company’s cash burning may be a concern for some, Lucid still has “ample financial flexibility” and can, therefore, make further growth-driving investments. For all the problems it has faced this year, Lucid is determined to prove that it shouldn’t be counted out.

On the date of publication, Samuel O’Brient did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.