Several electric car stocks got huge boosts in recent weeks over enthusiasm for the promise of robotaxis. Tesla launched its robotaxi pilot program in Austin, Texas, last month. Lucid Group (NASDAQ: LCID), meanwhile, recently partnered with Uber Technologies to deliver 20,000 self-driving vehicles alongside a $300 million cash infusion.
But not every analyst is bullish. CNBC’s Jim Cramer, for example, recently questioned the value of Lucid’s deal with Uber. This month, seven other major Wall Street analysts reaffirmed their price targets for Lucid stock. Everyone predicts that shares will fall in value over the next 12 months.
Why is Wall Street still so bearish? There’s one obvious culprit.
Cathie Wood, CEO of Ark Invest, thinks robotaxis will be a $10 trillion industry long term. That has investors excited.
Over the next 12 to 24 months, however, most EV makers will be feeling the pain. That’s because federal tax credits for EVs are set to expire this September, effectively making a new EV purchase $7,500 more expensive. While the exact impact remains unknown, this shift should sizably lower demand growth. Federal automotive regulatory credits, meanwhile, are also set to lose their value given fines for noncompliance are being eliminated. Lucid has earned more than $200 million through these programs. And while it won’t lose access to the entirety of this profit source, given that many state and international programs will remain, the financial impact will be sudden and meaningful.
Every EV maker will be affected by these regulatory shifts, including Rivian, Tesla, and Lucid. EV sales in the second quarter of 2025 are already down 6.3% year over year. We could see these declines persist, or even accelerate, given reduced incentives.
Lucid’s robotaxi opportunity remains lucrative long term. But analysts are rightfully worried about the next year or two when it comes to reduced sales and profit growth.
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