Lucid Motors denies bankruptcy report
▼ Summary
– Lucid Motors denies rumors it is considering Chapter 11 bankruptcy, calling them “completely false” and stating it has sufficient liquidity into next year.
– The denial follows a stock price drop of over 50% on Tuesday, its biggest intra-day drop ever, though shares later recovered to about 14% below opening price.
– The company has a new CEO and cut over 2,000 jobs this year in a restructuring ahead of launching a smaller, more affordable electric SUV.
– A report claimed Lucid is exploring bankruptcy or going private on AlixPartners’ advice, but Lucid says the firm is only helping strengthen operations.
– Lucid delivered 3,953 vehicles in Q2 2024, barely more than last year, and is working with Uber and Nuro on a luxury robotaxi service by year-end.
Lucid Motors has forcefully pushed back against a report suggesting the company is exploring a Chapter 11 bankruptcy filing. In a statement to TechCrunch, Chief Communications Officer Nick Twork called the claims “completely false” and stressed that the electric vehicle maker has ample cash to sustain operations well into next year.
“The rumors are completely false,” Twork said. “The company has sufficient liquidity to carry its operations well into next year, as recently published in its last quarterly filings, and it has not formed any special Board committee to explore the scenarios reported today. Our focus is on improving execution, strengthening operations, and positioning Lucid to realize the full potential of its technology, products, and innovation.”
The denial came just hours after Lucid’s stock suffered a historic plunge, dropping more than 50% on Tuesday in its largest intra-day decline ever, according to Bloomberg News. Shares have since recovered some ground, trading at $4.72 as of 2:46 p.m. ET, roughly 14% below their opening price.
This year has been tumultuous for the Newark, California-based automaker. It has already laid off over 2,000 employees as part of a sweeping restructuring, and recently named a new CEO. The moves are designed to streamline operations ahead of the expected launch of a smaller, more affordable electric SUV later this year.
The bankruptcy speculation originated from an electric vehicle blog, which cited two unnamed sources who claimed Lucid was either considering Chapter 11 protection or a move to go private, based on recommendations from consulting firm AlixPartners. Twork clarified that AlixPartners is only assisting Lucid with operational improvements and “nothing else,” adding that the firm “has not recommended bankruptcy to management or the Board.”
AlixPartners has a track record of working with struggling EV startups. Lordstown Motors brought in the firm in 2021 after its CEO and CFO resigned, ultimately leading to a partnership with Foxconn that later collapsed, pushing Lordstown into bankruptcy. Faraday Future also retained AlixPartners in 2022 following an internal probe.
Lucid’s financial challenges are well-documented. The company recently reported delivering 3,953 vehicles in the second quarter, only a marginal increase from the same period last year. Despite its advanced technology, the luxury EV maker has consistently struggled to attract buyers. Earlier this month, it announced another round of layoffs and said it would eliminate a second production shift at its Arizona factory to better align output with demand.
On a more ambitious note, Lucid is working with Uber and Nuro to launch a luxury robotaxi service by the end of this year. Uber has committed to purchasing at least 35,000 Nuro-equipped Lucid vehicles over the next few years, including 10,000 Gravity SUVs and 25,000 based on the company’s upcoming midsize EV platform.
(Source: TechCrunch)
