Lucid Motors Rejects Bankruptcy Rumors After Stock Suffers Record Plunge

Lucid Motors has firmly rejected reports that it is weighing a Chapter 11 bankruptcy filing, calling the claims "completely false" after its stock price suffered its steepest single-day decline on record.

Nick Twork, the electric vehicle manufacturer's chief communications officer, told TechCrunch in a statement that the company has sufficient liquidity to fund operations well into next year, as documented in its most recent quarterly filings. He also stated that no special board committee has been formed to explore bankruptcy or any of the scenarios reported.

"Our focus is on improving execution, strengthening operations, and positioning Lucid to realize the full potential of its technology, products, and innovation," Twork said.

Stock Plunge Follows Bankruptcy Report

The denial came after Lucid's shares plummeted more than 50% on Tuesday — the largest intraday drop in the company's history, according to Bloomberg News. The stock partially recovered from the freefall and was trading at $4.72 per share as of 2:46 p.m. Eastern Time, roughly 14% below its opening price.

The sell-off was triggered by an electric vehicle blog report citing two unnamed sources who claimed Lucid was considering either a Chapter 11 filing or going private. The report alleged that consulting firm AlixPartners had recommended these options to the company.

Twork pushed back specifically on the AlixPartners claim, stating that the firm is assisting Lucid with strengthening its operations and "nothing else." He emphasized that AlixPartners has not recommended bankruptcy to either management or the board.

Restructuring Efforts and Leadership Changes

Lucid has been undergoing significant changes this year. The company recently appointed a new chief executive officer and has cut more than 2,000 jobs as part of a broad restructuring initiative. These moves come ahead of the anticipated launch of a smaller, more affordable electric SUV scheduled for later this year.

Earlier this month, Lucid announced another round of layoffs and said it would eliminate a second production shift at its Arizona factory. The company described the decision as an effort to align production plans with anticipated demand.

The automaker disclosed that it delivered 3,953 vehicles in the second quarter of this year — only marginally higher than the same period last year. Lucid has historically faced difficulties attracting buyers for its luxury electric vehicles, despite the cars receiving praise for their technological specifications.

AlixPartners' Track Record in the EV Sector

AlixPartners has become a familiar name in the electric vehicle industry, frequently brought in by companies facing financial difficulties. Lordstown Motors engaged the firm in 2021 following the resignations of its CEO and CFO, in an effort to restructure the young business. That startup eventually entered a partnership with Taiwanese electronics manufacturer Foxconn, but the relationship deteriorated and Lordstown ultimately ceased operations.

Faraday Future, another EV startup, also enlisted AlixPartners in 2022 to implement recommendations from its board of directors following an internal investigation.

Robotaxi Ambitions with Uber and Nuro

Despite the turbulence, Lucid is pressing forward with ambitious plans in the autonomous mobility space. The company is working to launch a luxury robotaxi service by the end of this year in partnership with Uber and Nuro.

Uber has committed to purchasing at least 35,000 Nuro-equipped Lucid vehicles for the initiative over the coming years. Of those, 10,000 will be Gravity SUVs, while the remaining 25,000 will be built on Lucid's upcoming midsize electric vehicle platform.

The robotaxi venture represents a significant bet on future revenue streams, even as the company navigates production challenges and workforce reductions. Whether Lucid can successfully balance its restructuring efforts with these growth initiatives remains an open question for investors and industry observers alike.

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Source: TechCrunch