Lucid slips after earlier rally driven by Air sedan hype and EV enthusiasm cools

• Lucid shares fell as much as 9% Wednesday, reversing gains earlier in the day.
• The shares early Wednesday had extended Tuesday's rally amid continued investor hype around its Air sedan and EVs.

Lucid stock slipped as much as 9% Wednesday, reversing earlier gains driven by hype around its Air sedan and EV stocks as a whole.

Lucid jumped 24% Tuesday to lead the broader rally in EV stocks including Rivian and Tesla. It continued to rally Wednesday and then reversed during the session. At 2:03 pm ET, the shares were lower by 5.6%, trading at $52.42. Rival EV-maker Rivian also reversed its days-long rally, dropping as much as 18% in its first down day since going public last week.

Despite the slump, Lucid has more than doubled in price since it went public via SPAC merger in July. Its rally yesterday through Wednesday morning was spurred, in part, by positive reviews and guidance on its signature Air sedan. The luxury EV won the highly coveted Car of the Year award Monday from MotorTrend, beating out sedans from Porsche, Honda and Hyundai and becoming only the third electric car to nab the title.

Also this week, the company reported its first quarterly results since going public and said it saw growing demand for its EV while maintaining its 2022 production goal.

Among retail investors, Lucid was the second most-traded stock Wednesday, according to Fidelity data. Newly public Rivian was the top, and Tesla was the third. Canoo, Gores Guggenheim, a SPAC set to merge with EV startup Polestar, and Ford were also among the top traded retail stocks, the data show.

As of yesterday, retail traders had purchased $378 million worth of shares of Lucid, Rivian, and Ford, in the past week — surpassing demand for Tesla — according to Bloomberg, which cited data from Vanda Research.

Peter Rawlinson, a former chief engineer of Tesla's Model S, now runs Lucid and is obsessed with wanting to get ahead of his rival, Insider previously reported. Despite the share slump Wednesday, Lucid's market value of $84 billion has surpassed that of legacy automaker Ford, but it still has a ways to go to reach Tesla's approximate $1 trillion value.