High-end electric vehicle (EV) maker Lucid Group's (LCID 2.06%) stock didn't notch any new highs in May. In fact, it ended up falling in the month, skidding to more than an 11% loss despite publishing a quarterly earnings report that cheered not a few investors. Yet Mr. Market was dismayed by other developments.

Red is not a good color for this company

At least Lucid kicked off the month on a high note. Less than a week into May it unveiled its first quarter figures, revealing that revenue accelerated to over $235 million for a year-over-year increase of 36%. In terms of operations, the company produced 2,212 vehicles during the period and delivered 3,109. The latter figure was a sturdy 58% higher than the comparable quarter of 2024.

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Alas, analysts tracking Lucid stock were expecting better; collectively, they were modeling a top line of slightly over $246 million.

As for the bottom line, the earnings release served as a stark reminder that Lucid remains deep in the red. Net loss according to GAAP standards for the quarter was more than $366 million, which was at least well narrower than the almost $685 million deficit of first quarter 2024. The dynamic was similar on a non-GAAP, per share basis, with the company posting a $0.20 per share net loss against the year-ago period's $0.27.

On another positive note, that $0.20 bettered the $0.23-per-share net loss analyst consensus -- one key reason for the positive investor reaction to the earnings report.

The market was notably less happy about the potential for Lucid, and other EV makers, to get slammed by an abrupt change from on high. As the month went on there was increased discussion and debate about President Trump's "One, Big, Beautiful Bill" as it wound its way through Congress. A concerning section of the bill had to do with the proposed elimination of the government's EV tax credit of up to $7,500 for buying such a vehicle.

It almost goes without saying that the tax credit has been a boon for the EV industry. Until recently, manufacturers were counting on it to last until its current expiration date of Dec. 31, 2031. Under Trump's bill, however, that would be changed to the far sooner Dec. 31, 2025.

Spooked about the subsidy situation

Lucid is significantly vulnerable to any slump in business arising from a potential EV tax credit expiration, because the company's habitual nine-figure losses are unsustainable, despite the $5.76 billion in liquidity the company boasted about holding at quarter-end.

This is a business I'm personally pulling for, as its models are attractive and apparently high-quality enough to justify their prices; I also feel management is doing what it can to boost business and get those revenue streams flowing. There's an awful lot of red ink in the financial statements, however, and that makes me concerned for its future.