Lucid Shares Flat in Pre-Market as Large-Scale Recall Draws Attention

Lucid Group Inc. shares were largely flat early Friday as investors digested a large-scale vehicle recall. Here's what investors need to know.

Lucid Group stock is currently at depressed levels. What's next for LCID shares?

NHTSA Announces Recall of Over 27,000 Lucid Air Vehicles Due to Fire Risk

The focus early Friday was on a notice from the National Highway Traffic Safety Administration disclosing a recall of 27,185 Lucid Air sedans in the U.S., the company's largest recall to date.

The regulatory safety recall stems from a potential overheating issue in the exterior lighting circuit due to insufficient overcurrent protection, posing a potential fire risk and a risk of exterior lighting failure.

NHTSA advised owners to park the sedans outdoors and away from buildings until a full update is completed. Lucid has deployed a corrective over-the-air software update to enhance eFuse circuit protection, with NHTSA noting that more than 20,700 vehicles have already received this digital fix.

Auto Tariff Threats and Supply Chain Headwinds Weigh on EV Sentiment

Earlier this week, policy discussions proposing 50% tariffs on foreign finished vehicle imports and auto parts dampened sentiment across the sector. These protectionist proposals prompted Wall Street to immediately reassess supply chain cost structures and exposure to international components.

Although Lucid produces EVs domestically at its Casa Grande, Arizona, facility, investors remain concerned that tariffs on imported battery raw materials, specialized electronic components, and international parts could push up per-vehicle production costs.

As the company works toward launching the Gravity SUV and achieving positive gross margins, this potential supply chain friction could further squeeze margins.

LCID Stock Pauses Gains on Friday

LCID Price Action: Lucid Group shares rose 0.98% to $5.14 in pre-market trading on Friday.