Tesla or Lucid: Cantor Selects the Better EV Stock to Buy

Electric vehicle (EV) stocks have been revving up investor interest for years – and for good reason. On paper, they check a lot of the right boxes: cleaner energy, cutting-edge tech, and the potential to reshape one of the world’s largest industries. What’s not to like, right?

Well… it depends on who you ask.

For pessimists, the EV space is crowded, competition is fierce, and profit margins are often razor-thin. Building a car company from scratch is brutally expensive, and even some of the more established players are still burning through cash. And then there’s the market itself – charging infrastructure, battery shortages, and regulatory whiplash.

That’s why investors are paying close attention to the companies best positioned to navigate these headwinds – and that brings us to Tesla (NASDAQ:TSLA) and Lucid (NASDAQ:LCID).

Cantor analyst Andres Sheppard is taking a closer look under the hood of these two U.S.-based EV makers. Tesla is the obvious heavyweight, having cemented its place as the world’s most valuable automaker. Lucid, while much smaller in scale, still ranks among the top ten EV players in the country.

Sheppard doesn’t shy away from picking a favorite – and his view may offer key insight into which EV stock could lead the next leg of the race. Let’s take a closer look.

Tesla

We’ll start with Tesla, Elon Musk’s flagship company. As noted, Tesla is the world’s most valuable automotive company – its market cap of $1.1 trillion is more than four times that of second-place Toyota. Tesla is also notable for being the first of the 21st century’s EV startups to reach profitability in the US; the company has been realizing profits since 2020.

While Tesla has based its success on cars, the company has a wider vision. The company has built an extensive array of electric vehicle charging stations, including fast chargers, and has a growing business segment devoted to electric power generation and storage. In addition, Tesla is at the forefront of new automotive technologies, particularly autonomous driving. The company has a new Robotaxi under development, with plans to launch the service in June of this year in Austin, Texas. The company’s autonomous tech, which makes heavy use of AI, is also behind its FSD, or full self-driving, package. This is an advanced driver assistance package, and Tesla is testing the system, with plans for a full launch this year, in the Chinese and European markets.

Tesla is also adapting its work on autonomy and AI to a humanoid robot program, dubbed Optimus, designed to perform general labor in a world that conforms to the shape of the human body. The Optimus robot draws heavily on Tesla’s work with autonomous AI technology, and the company plans to commence regular production of the robot next year, with deliveries to begin in 2027. As a promotional move, Musk has already said that he plans to send an Optimus robot on a SpaceX Starship flight to Mars, with a departure in 2026.

The company’s growing diversification, and the importance of it, are clear from Tesla’s recent 1Q25 report. In the first quarter of this year, Tesla saw a 20% drop in automotive revenue. The total top line came to $19.34 billion, down 9.2% year-over-year and missing the forecast by more than $2 billion. Automotive revenue made up $14 billion of that total. Tesla’s energy production portfolio provided a bright spot, growing 67% y/y to reach $2.73 billion. At the bottom line, Tesla’s EPS of 27 cents was 15 cents per share lower than had been anticipated.

And yet, Wall Street’s reaction? Surprisingly upbeat. Since the April 22 report, Tesla shares have surged about 47%. Investors seem encouraged by easing tariff tensions — and Musk’s announcement that he’ll reduce his time with DOGE to focus more on his business interests.

Meanwhile, Cantor’s Sheppard sees reason for optimism, pointing to a lineup of near-term catalysts that could reignite momentum for the stock.

“With shares currently trading at ~$350, we remain bullish ahead of several material near-term potential catalysts,” Sheppard wrote. “We are encouraged by management’s reaffirmation of: launch of Robotaxi in Texas in June (next month), and the introduction of a lower-priced vehicle in 1H25 (we expect initial price of ~$30,000 inclusive of tax credit), which could be timely given the likely negative impact to vehicle prices due to tariff implementation and the likely removal of the tax credit.”

Sheppard also pointed to Musk’s commitment on the Q1 earnings call to scale back his time at DOGE and refocus more heavily on Tesla.

Beyond that, other catalysts Sheppard sees in play include the ongoing rollout of Full Self-Driving (FSD) in China (which began in Q1), the expected European rollout in 1H25 (pending regulatory greenlights), the ramp-up of Optimus Bot production (expected in 2026), and initial customer deliveries of the robot by 2027. Tesla’s long-delayed Semi Truck is also on the radar, with production expected to begin in 2026.

Given this lineup, Sheppard rates TSLA shares an Overweight (i.e., Buy). (To watch Sheppard’s track record, click here)

Still, Wall Street remains divided. Out of 37 analysts tracked, Tesla earns a Hold (i.e., Neutral) consensus rating – with 16 Buys, 10 Holds, and 11 Sells. The current share price sits at $351.60, while the average target of $277.78 suggests a potential downside of ~21% over the next 12 months. (See TSLA stock forecast)

Lucid Group

Lucid Group, the next stock we’ll look at, is a California-based EV company that’s been in business since 2007 and focuses on the design and manufacture of high-end luxury EVs. Lucid’s flagship vehicle is the Air, a fully electric luxury sedan designed to incorporate both advanced EV technology and stylish comfort. The vehicle is available with a wide range of interior and exterior options, and customers can order a vehicle that is customized straight from the factory floor.

Among the features that Lucid builds into its Air vehicle line are fully electronic ‘glass’ dashboards, paired with a high-visibility glass canopy cabin, a battery system with a 400-mile design range, and cabin seating that provides plenty of passenger legroom without sacrificing luggage storage. Lucid has prioritized comfortable driving – and not just physical comfort, as the company also offers a driver assistance package.

In addition to the Air, Lucid has also designed the Gravity, its second vehicle. The Gravity is a touring vehicle, which can be heavily customized during the order process. Lucid offers a range of interior and exterior options, with seating for up to 7 people, multiple wheel sizes to choose from, several seating and cargo configurations, and a fast-charging option. Orders and production for the Gravity began late last year.

Earlier this month, Lucid released its results for 1Q25 and showed a record for quarterly deliveries – a total of 3,109 vehicles. This was up 58% year-over-year and marked a company record for quarterly deliveries. The company produced 2,212 vehicles during the quarter and is predicting total production of 20,000 vehicles this year.

Lucid’s quarterly revenue came to $235 million, up 36% year-over-year but missing the forecast by $11.11 million. At the bottom line, Lucid ran a net loss of 20 cents per share in non-GAAP measures. This figure was an improvement from the 27-cent net loss in 1Q24 and was 3 cents per share better than had been expected.

Sheppard, in his coverage of Lucid, is impressed by the company’s combination of technology and quality in its vehicles but still can’t bring himself to recommend buying this stock.

“We continue to believe that Lucid benefits from a strong partnership with the PIF and differentiated technology. We also continue to believe that Lucid vehicles are able to provide higher battery efficiency, longer battery range, better performance, and faster charging (relative to other EVs)… We continue to believe the Gravity will help boost customer demand, particularly given the vehicle performance and more competitive price. Separately, we also continue to believe the launch of the mid-size platform will be a meaningful catalyst for the company and should help the company to scale and improve customer demand. However, we remain Neutral due to persistent high negative gross margin, additional capital needs, a new management team that remains unproven, worsening macro conditions, and tariff uncertainty,” the analyst opined.

Quantifying his stance, Sheppard rates LCID shares as Neutral (i.e., Hold).

Overall, Lucid’s stock gets a Hold consensus rating from the Street. This is based on 11 reviews that break down into 1 Buy, 7 Holds, and 3 Sells. The shares are priced at $2.98, and the $2.38 average target price suggests a downside this year of 20%. (See LCID stock forecast)

And now, with the facts laid out, it’s clear that Cantor has singled out Tesla as the superior EV stock to buy in today’s market.

To find good ideas for EV stocks trading at attractive valuations, visit TipRanks’ Best Stocks to Buy, a tool that unites all of TipRanks’ equity insights.

Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.