Electric vehicle stocks across the board nosedived last year, and Lucid Group (NASDAQ:LCID) was no exception. During 2022, LCID stock went from around $38.50 to around $6.83 per share. That’s a more than 82% decline in price.

Recently, shares in the early-stage luxury EV maker have found support, at around $6 or $7 per share. To some, this may suggest that Lucid’s sell-off, which intensified during November and December, was merely the result of tax-loss harvesting.

Many speculative growth stocks, including Tesla (NASDAQ:TSLA), sold off during this timeframe.

Yet even as it may be likely that another sharp decline awaits this stock in the short term, I wouldn’t assume that it has bottomed out. Rather, as the “story” behind this once-hyped EV play keeps crumbling, a steady slide lower appears likely.

Few Remain Confident in the LCID Stock Bull Case

The global push to reduce carbon emissions, along with changing consumer preferences, point to EVs eventually gaining critical mass. However, in hindsight, it’s clear investors overestimated two things when the EV proliferation trend first gained momentum in 2020.

First, they were wrong about how quickly EV adoption would occur. Second, the extent to which upstarts, rather than automotive market incumbents, would benefit from this trend. These overestimations were key in pushing LCID stock to unsustainable prices in 2021 and in early 2022.

During this time, investors bought into the company’s aggressive growth projections, which called for Lucid Group to hit 251,000 annual deliveries by 2026.

Investors also went overboard with the “Tesla killer” narrative that surrounded this stock. Citing strengths like its proprietary technology, and its CEO, Peter Rawlinson (a Tesla alum), many believed Lucid could usurp the “EV King” crown.

With the selloff in Lucid and other EV stocks since 2022, investors once overly bullish on this sector have admitted they’ve gone too far, have cashed out and moved on. That said, there remain a few in the market who are confident in the bull case for this stock. The question, however, is how much longer this confidence will last.

Why The Sell-Off Isn’t Over

In the past year, Lucid Group has experienced numerous hiccups/setbacks. These include a walking back of production targets, a decline in reservations for the EV maker’s flagship Air luxury electric sedan, and the burning through of billions in cash.

Still, a hardcore base of supporters continues to hold LCID stock, patiently waiting for its recovery. Despite all the negative developments, plus the souring of sentiment for the sector, you too may be tempted to buy in. After all, even a partial recovery would in theory result in a triple-digit percentage move higher.

While in theory it’s possible Lucid makes a comeback, right now it appears more probable that there’s further disappointment ahead. For instance, even if the company is making progress resolving supply chain bottlenecks, enabling it to meet 2023 production targets, demand could still fall short.

If there’s a recession this year, it could slow down EV adoption. Rising competition from incumbent luxury automakers may also limit how much Lucid’s sales take off this year. Not only that, there are additional factors that could convince those still holding LCID to finally bail. In turn, putting more pressure on shares.

The Bottom Line

What else could sink this stock over the next year? In my last Lucid Group stock article, I discussed how recent equity offerings, plus the company’s plans to potentially enter the Chinese market, are both red flags for investors.

LCID’s latest capital raises have diluted the positions of existing investors and could limit future upside potential. The plans to move into China, even as the company’s U.S. operations remain a work in progress, could worsen its cash burn issue, necessitating more dilution, through the sale of new shares.

Lucid Group likely isn’t done demonstrating to the investing public that it’s no “Tesla killer,” but merely an “EV also-ran,” with questionable chances of success.

As the hope and hype behind it keep fizzling out, LCID stock will remain en route to lower prices. The best move is to stay out of the way.

LCID stock earns an F rating in Portfolio Grader.

On the date of publication, neither Louis Navellier nor the InvestorPlace Research Staff member primarily responsible for this article held (either directly or indirectly) any positions in the securities mentioned in this article.