Lucid Group Inc (LCID) shares plummeted 6.73% in Thursday's trading session, as the electric vehicle (EV) maker faced a perfect storm of industry-wide pressures and company-specific challenges. The significant drop came amid a broader pullback in EV stocks and growing concerns over potential changes to government incentives for electric vehicle purchases.

The steep decline in Lucid's stock price was partly driven by comments from Tesla CEO Elon Musk, who criticized President Donald Trump's proposed budget bill. Investors are particularly worried about the potential elimination of the $7,500 EV tax credit, which could be terminated as early as December 31, 2025, instead of its current expiration date in 2031. This change could significantly impact demand for electric vehicles, especially for premium manufacturers like Lucid.

Adding to investor concerns are Lucid's ongoing financial challenges. Despite reporting a 36% year-over-year increase in revenue to $235 million in its recent first-quarter results, the company continues to post substantial losses. With a net loss of over $366 million for the quarter, Lucid's path to profitability remains uncertain. While the company boasts $5.76 billion in liquidity, the combination of persistent losses and potential industry headwinds has intensified market skepticism about Lucid's long-term prospects in the competitive EV landscape.