Lucid Group (LCID -3.95%) stock has been volatile so far in 2025, with shares gyrating between $2 and $3.50. And while shares look expensive according to some metrics, sales growth is expected to explode higher in both 2025 and 2026. In fact, there are three compelling reasons to consider buying more Lucid shares before the company's next earnings call, which is expected to occur sometime around Aug. 4.

1. Lucid's sales growth is about to surge

In general, investing in electric car stocks can be tricky. But the upside potential is clearly gigantic. Just take a look at Tesla's historic rise. Since 2010, Tesla shares have risen in value by more than 26,000%. Yet over that time period, more than a dozen EV start-ups have gone bankrupt.

What determines whether an EV start-up becomes the next Tesla rather than go bankrupt? As Tesla has proven, one of the keys is to release new vehicles, especially affordable ones like the Model Y and Model 3. That's exactly what Lucid is hoping to replicate in the coming years.

Earlier this year, Lucid released its Gravity SUV platform. While still priced at $70,000 and above, this luxury vehicle is expected to boost sales significantly. Analysts projects 73% sales growth in 2025, with another 96% growth in 2026.

The biggest sales growth for Lucid, however, might occur in 2027 and 2028 after the release of its new "mass-market" vehicles. These new models will have price tags under $50,000, unlocking millions of new potential buyers.

2. Profitability could improve dramatically

The launch of new models should help Lucid not only boost sales dramatically, but also achieve better margins due to scale. Tesla has posted positive gross profit margins for over a decade. Competitor Rivian Automotive, meanwhile, achieved positive gross profit margins last quarter. Lucid, however, is still losing tens of thousands of dollars on every car it sells.

How did Tesla and Rivian achieve positive gross margins? It wasn't through ruthless cost-cutting. The key was much simpler: scale. As sales increased due to the introduction of new models, the company was able to achieve operating leverage, spreading out its fixed costs across higher volumes of sales. As Lucid scales its sales base, expect profitability to improve in response.

Image source: Getty Images.

3. Lucid's small size could generate huge upside

Lucid's Gravity sales numbers may surprise analysts this quarter. If that happens, we could also see gross profit margins improve faster than expected.

Finally, investors might be willing to look forward and appreciate to the massive sales potential of Lucid's mass-market vehicle launches. With a current market capitalization of under $10 billion, it's clear that Lucid stock has plenty of upside at current levels, especially compared to Tesla's $1 trillion valuation.

What could go wrong? As with any early-stage EV start-up, Lucid isn't flush with cash. As it grows, expect management to tap equity and debt markets further to raise capital for growth. These efforts will keep the company afloat until net profitability is achieved, but current shareholders will be diluted in the process. Plus, there's no guarantee that consumers will like Lucid's new models as much as they loved Tesla's Model X, Model 3, and Model Y vehicles.

All in, Lucid is an attractive buy for aggressive growth investors looking to swing for the fences in order to find the next Tesla. But expect plenty of volatility, with 100% downside possible should the company fail.