Lucid Group (LCID 2.60%) became a hot stock after it went public by merging with a special purpose acquisition company (SPAC) in July 2021. The producer of luxury electric vehicles (EVs) started trading at $25.24 on its first day, and its shares more than doubled to a record high of $55.52 just four months later.

Lucid impressed investors because it was led by Tesla's former chief engineer Peter Rawlinson, and it was already ramping up its production of its first Air sedans.

At its peak, Lucid's market cap hit $91.4 billion -- or 150 times the $608 million in revenue it would generate in 2022. At the time, Lucid claimed it could deliver 20,000 vehicles in 2022, 49,000 vehicles in 2023, and 90,000 vehicles in 2024. Unfortunately, Lucid only delivered 4,369 vehicles in 2022, 6,001 vehicles in 2023, and 10,241 vehicles in 2024.

Image source: Getty Images.

Lucid blamed that sluggish growth on its supply chain issues, intense competition, and a challenging macro environment. It also postponed the launch of its second vehicle, the Gravity SUV, from 2023 to 2024. Rawlinson's resignation this February cast even more dark clouds over its future. That's why Lucid's stock now trades at about $2.

But even at these depressed levels, Lucid's stock isn't a bargain. It still has a market cap of $7.2 billion, which is 4.8 times 2025 sales estimate of $1.5 billion. That might seem reasonable compared to its projected revenue growth rates of 86% in 2025 and another 87% in 2026 -- but tariffs, supply chain disruptions, elevated interest rates, and other macro headwinds could cause it to miss those rosy estimates by a mile. If that happens, Lucid's stock could stagnate or slide lower over the next two years.

On the bright side, Lucid won't go bankrupt anytime soon. It ended 2024 with $6.14 billion in total liquidity, which it expects to support its expansion through the second half of 2026, and it's still firmly backed by the Saudi Arabian government, which owns more than 60% of its shares through its Public Investment Fund (PIF). However, I believe another unloved EV maker, Polestar (PSNY 3.29%), might grow faster than Lucid and eclipse its market cap within the next two years.

Polestar is producing more vehicles and trading at a lower valuation

Polestar was Volvo's racing team and brand for high-performance cars. However, Volvo's parent company, Geely, spun off Polestar as a stand-alone EV maker in 2017, and it went public by merging with a SPAC in June 2022.

Polestar currently sells three luxury EVs: the compact Polestar 2, the Polestar 3 midsize SUV, and the Polestar 4 compact coupe SUV. But like Lucid, Polestar overpromised and underdelivered. It originally predicted it would sell 65,000 vehicles in 2022, 124,000 vehicles in 2023, and 225,000 vehicles in 2024.

However, Polestar only sold 50,510 vehicles in 2022, 52,798 vehicles in 2023, and 44,851 vehicles in 2024. It blamed that slowdown on its supply chain challenges and software issues that forced it to postpone the Polestar 3's launch from 2023 to 2024. It also delayed the filing of its latest annual report (due to a restatement of its filings in 2023).

Polestar is struggling, but brighter days might be ahead. It's capitalizing on the consumer backlash against Elon Musk and Tesla with its "Trade in Your Tesla" deals for up to $20,000 toward the lease of a new Polestar 3. It plans to launch its next vehicle, the Polestar 5 grand tourer, later this year as it expands its plants in the U.S. and South Korea.

Polestar isn't profitable yet, but it still had $501 million in cash with an $800 million credit facility at the end of its latest quarter. Analysts expect its revenue to more than double in 2025 and rise 55% in 2026. Polestar faces many of the same headwinds as Lucid, but its current market cap of $2.2 billion values the company at just 0.5 times this year's sales. Valuing Polestar at the same forward price-to-sales ratio as Lucid would increase its market cap nearly tenfold, to nearly $20.9 billion. 

Polestar probably won't generate a 10-bagger gain in just two years, but it could command a significantly higher valuation if vehicle deliveries accelerate again. Investors who realize that Polestar is pumping out a lot more vehicles than Lucid but trading at much cheaper valuation could flock back to its stock -- and it could surprise the market by outperforming its luxury EV rival.