What happened

Established automakers are finding out it's hard to ramp up electric vehicle (EV) production, and that's benefiting EV startups like Lucid Group (LCID 2.69%) Friday. Lucid shares were trading up by 8.2% as of 12:30 p.m. ET. 

So what

When Ford Motor Company (F 0.99%) reported its second-quarter results Thursday night, it raised its projections for its full-year earnings and free cash flow. But that was due to the performance of its legacy internal combustion engine and commercial vehicle divisions. Ford's update on its EV division wasn't as positive. 

Ford pushed back its expected timeline for ramping up EV production, and that is helping stocks like Lucid Friday. Lucid has also struggled to increase its production, but investors are viewing the prospect of lower EV volumes coming from Ford as a potential benefit for Lucid. At this point, Lucid shares are up by more than 20% over the past month. 

Now what

Lucid manufactures luxury EV sedans that sell at prices starting above $87,000. Its high-end offerings don't qualify for the federal tax incentives instituted as part of the Inflation Reduction Act, and the market for such pricey cars is clearly limited. The company only produced about 7,200 vehicles last year, and expects to increase its output to over 10,000 EVs in 2023. Supply chain disruptions and manufacturing struggles are to blame. But waning demand for those niche vehicles may also be a contributing factor. 

By contrast, Ford was planning to have its EV manufacturing plants operating at an annual run rate of 600,000 vehicles by year's end. That company has much greater manufacturing capacity, but it's finding it more difficult than it initially expected to produce its new lineup of EVs. Ford now doesn't expect to hit that run rate until sometime next year. 

Lucid plans to begin sales of its second vehicle model by then, so any delays from Ford will open up more opportunities for Lucid's Gravity SUV to gain traction in the marketplace. That has investors bidding up its shares Friday. But Lucid still has much to prove, and it will have to get past its own production and demand issues before it can prove itself a successful business and stock investment.