Lucid Group Inc (LCID) shares plummeted 5.38% in intraday trading, as investors grappled with concerns over the potential elimination of a crucial electric vehicle (EV) tax credit, overshadowing the company's mixed first-quarter results.

While Lucid's Q1 performance showed some improvements, with revenue increasing 36% year-over-year to $235 million and vehicle deliveries up 58%, the company still faces significant challenges. Despite narrowing its losses, Lucid remains deeply in the red with a net loss of over $366 million for the quarter. This ongoing financial strain, coupled with the looming threat to the EV industry's tax incentives, has intensified investor worries about the company's path to profitability.

The market's reaction appears to be primarily driven by discussions surrounding President Trump's proposed bill, which could potentially eliminate the government's EV tax credit of up to $7,500 per vehicle by the end of 2025, significantly earlier than the current expiration date of December 31, 2031. This development is particularly concerning for Lucid, given its reliance on high-end EV sales and its current financial position. With $5.76 billion in liquidity reported at the end of Q1, the company's ability to sustain its operations while navigating potential industry headwinds remains a key focus for investors.