As of this writing, Lucid Group (NASDAQ:LCID) trades for $3.33 per share. In other words, LCID stock, which came to be via a special purpose acquisition company merger, trades for around a third of the debut price of its SPAC predecessor.

Comparing current prices to LCID’s all-time closing high ($58.05 per share), the gap is even more pronounced. Current price levels represent around a 94.3% drop from this high-water mark.

Clearly, investors have clearly bailed on the struggling electric vehicle maker’s shares in a big way. However, don’t assume that the stock is oversold, or that it is a bargain by any stretch.

The stock continues to price in future growth for where there is little evidence that it will ever arrive. As has been the case, expect two issues to keep on placing further pressure on shares.

LCID Stock: The Proof is in the Poor Performance

Last week, I broke down Lucid Group’s latest quarterly earnings release. In a nutshell, the company continued to disappoint investors. Along with the reporting of a year-over-year decrease in sales, coupled with a YoY increase in operating losses, Lucid also provided guidance that suggests little in the way of growth during 2024.

This should come as no surprise. The EV maker has largely resolved past production hiccups. Lucid is also set to launch a new vehicle model (the Gravity SUV) later this year. However, it is very debatable whether Lucid’s increasing of its model offerings will translate into any sort of growth surge, and in turn, a resurgence for LCID stock.

Besides the current weak level of demand for EVs, Lucid keeps struggling in its efforts to convince luxury EV buyers to choose its vehicles over both Tesla’s (NASDAQ:TSLA) higher-priced models, as well as luxury EV offerings from incumbent automakers.

Even as auto reviewers tout how Lucid’s Air luxury sedan beats out Tesla’s Model S Plaid in many areas, customers still aren’t convinced. The proof is in the poor sales performance. At the same time this key issue persists, so does another.

Dilution May Drive a Deeper Dive

As discussed in my last LCID stock article, dilution isn’t always bad. Sometimes the value created from capital raised through dilutive means can outweigh the initial impact. Yet barring a sudden shift in popularity for Lucid’s EVs, I don’t see such a profitable scenario panning out.

Considering the likely objectives of the company’s majority shareholder (PIF, which is the Kingdom of Saudi Arabia’s sovereign wealth fund), it’s very much possible that the following scenario plays out. PIF’s continued investing into Lucid has largely to do with the gulf oil kingdom’s push to diversify its economy.

This explains why Lucid has opened a production facility in Saudi Arabia, one that could one day can produce up to 155,000 vehicles per year. If Lucid keeps failing to gain traction in the U.S. EV market, PIF could pressure the company to abandon its stateside focus, and instead pivot towards being a specialty EV maker, focused on the Middle East and close markets like Europe.

Investors would once again de-rate the company’s likely future value. Coupled with an increasing share count, chances are this would drive a deeper dive for shares.

Bottom Line: Still a Lemon Among EV Stocks

Much like we call vehicles with severe manufacturing flaws lemons, I think it’s apt to call shares in EV companies with major problems lemons as well.

Despite my reservations about the many would-be “Tesla killers” still out there, I wouldn’t throw them all into the lemon category, but I would include Lucid Group in that category.

That’s not to say nothing about the company’s vehicles, which again appear to be competitive from a performance/features standpoint. However, with a strong chance of continued poor execution, plus the risk of a further dilution spiral, LCID stock remains a “no go” situation.

LCID stock earns an F rating in Portfolio Grader.

On the date of publication, neither Louis Navellier nor the InvestorPlace Research Staff member primarily responsible for this article held (either directly or indirectly) any positions in the securities mentioned in this article.