2025 was a rough year for electric vehicle sales in the U.S.
Despite a record-setting pace through the first three quarters of the year, thanks to the expiration of the $7,500 tax credit, EV sales dropped so far off a cliff in the fourth quarter that many of the top internal combustion engine vehicle makers were forced to admit that they had overestimated where EV demand would be in 2025.
U.S. EV market share fell to 5.7% in the fourth quarter as sales volume fell to 234,171 fully electric vehicles sold, according to Car Edge. That was down from 8.7% a year earlier, and the all-time high of 10.5% in Q3 when the credits expired.
Tesla was the biggest beneficiary of this shift, as its 58.9% market share was the highest it has been since 2023.
Tesla, along with Cadillac, Volvo, Jeep and Lucid, were the only handful of car makers to report increased market share in the fourth quarter, according to CE data.
Still, Lucid is battling a lot of big players for that market share, and while its 1.8% market share was the best it ever recorded, it needs to find a way to significantly increase that number if it is to survive.
Lucid lays off nearly one-fifth of its workforce
On Monday, Lucid issued a Securities and Exchange Commission filing announcing that it is cutting 18% of its U.S. workforce as part of its plan to save about $158 million in annualized costs.
The EV startup says it will incur cash charges of about $32 million related to severance, employee benefits, and employee transition costs, but it also expects to be done with the layoffs by the third quarter of this year.
Lucid is eliminating the second production shift at its AMP-1 factory in Casa Grande, Arizona, which currently employs about 2,800 workers, leading to hundreds of job losses there, according to the Phoenix Business Journal. All told, Lucid will be laying off more than 1,400 employees in the coming weeks.
But it’s not just blue-collar employees who are out of a job.
Lucid announced that Marc Winterhoff, its chief operating officer, departed the company effective immediately after the company eliminated the position. The chief operating officer of any company oversees the organization’s daily business operations.
Lucid did not specify why it eliminated that position, but Winterhoff had been interim CEO before the company named Silvio Napoli as the new CEO effective June 1.
“These are difficult decisions taken to align production with demand, reduce inventory, and adapt to declining market conditions,” a Lucid spokesperson said in a statement to CNBC. “They are part of a broader effort to simplify the company, sharpen execution, and position Lucid to become more competitive over time.”
The workforce reduction affects full-time employees, contractors and hourly production workers in manufacturing, according to the SEC filing.
All of these changes are part of the company’s goal of “aligning production plans with anticipated demand.” In other words right sizing production to meet demand that hasn’t been as robust as previously hoped.
Lucid has gone through many changes recently
This isn’t the first major shakeup Lucid has endured in recent years as the company comes to grip with the realities of the EV market in the U.S.
Former CEO Peter Rawlinson left the company unexpectedly in early 2025. Later that fall, chief engineer Eric Bach departed the company and has since filed a lawsuit against them for wrongful termination.
Then in February, Lucid laid off 12% of its employees. The company suspended its 2026 production guidance amid supplier disruptions and delivery issues, Autoblog reported. And while it produced 5,500 vehicles in the first quarter, it only delivered a little more than 3,000 of them.
All of those changes have caught the attention of analysts at RBC Capital, who have lowered the company’s price target at least three times since January. The last time, RBC shaved 20% off its expected price target to $8 per share from $10 per share. Before that, RBC had a price target of $20 per share.
Lucid shares closed Monday’s session, the day it announced the layoffs, down 3.7% to $5.16 per share.
RBC says it was concerned about Lucid’s liquidity as the carmaker needs near-term financing, despite its continued backing from the Saudi Public Investment Fund.