Lucid Group Inc. (NASDAQ: LCID) saw its stock price plummet 5.27% in pre-market trading on Wednesday, as investors continue to grapple with the electric vehicle maker's production ramp-up challenges and financial burn rate. The decline comes as the company faces scrutiny over its ability to scale production and achieve profitability in the highly competitive EV market.

Despite Lucid's progress in vehicle production, with output reaching just over 9,000 EVs in 2024, the company still lags far behind industry leaders. Lucid aims to more than double its production to around 20,000 vehicles in 2025, but this target pales in comparison to Tesla's 1.8 million vehicles produced in 2024. The stark contrast highlights the uphill battle Lucid faces in gaining market share and achieving economies of scale.

Adding to investor concerns are Lucid's financial challenges. In 2024, the company spent $1.7 billion on car production while generating only $800 million in sales. With additional expenses in research and development ($1.2 billion) and selling, general, and administrative costs ($900 million), Lucid's total expenses reached $3.8 billion against $800 million in revenue. The company's aggressive cash burn and reliance on share issuance to maintain its cash reserves raise questions about its long-term financial sustainability and potential for further shareholder dilution. As Lucid struggles to navigate these hurdles, investors appear to be reassessing their positions, contributing to the stock's pre-market decline.