Lucid Motors has dismissed claims about potentially filing for Chapter 11 bankruptcy protection.
Nick Twork, the Chief Communications Officer of Lucid, stated to TechCrunch that these “rumors are entirely unfounded.”
He added, “The company has ample liquidity to sustain its operations well into next year, as indicated in our recent quarterly reports. Additionally, no special committee has been formed by the Board to examine the situations suggested today. Our primary goal is to enhance our execution, strengthen our operations, and set Lucid up to leverage the full potential of its technology and innovations.”
This denial follows a dramatic decline in Lucid’s stock price, which dropped over 50% on Tuesday, marking the most significant intraday fall in its history. However, the stock has somewhat rebounded, trading at $4.72 a share at 2:46 p.m. ET, approximately 14% lower than the opening price.
The company has recently appointed a new CEO and has conducted layoffs exceeding 2,000 employees this year as part of a comprehensive restructuring plan in anticipation of launching a smaller, more affordable electric SUV later this year.
Earlier on Tuesday, an electric vehicle blog reported—citing two unnamed sources—that Lucid was contemplating filing for bankruptcy or transitioning to a private entity based on advice from the consulting firm AlixPartners. Twork countered that AlixPartners is merely aiding Lucid in enhancing its operations and “has not suggested bankruptcy to either management or the Board.”
AlixPartners has been known for providing assistance to struggling electric vehicle firms in recent years.
For instance, Lordstown Motors engaged the firm in 2021 following the resignations of its CEO and CFO as part of efforts to restructure the fledgling company. Eventually, the startup partnered with Taiwanese electronics leader Foxconn, but that collaboration deteriorated, leading to Lordstown Motors’ closure.
Similarly, Faraday Future also sought AlixPartners’ help to execute recommendations from its Board of Directors after an internal investigation in 2022.
Lucid Motors has disclosed that it delivered 3,953 vehicles in the second quarter of this year, which is only a slight increase compared to the same time last year. Historically, the company has faced challenges in attracting buyers for its luxury electric vehicles despite their advanced technological features. Along with the latest layoffs announced, Lucid also reported plans to eliminate a second production shift at its Arizona facility to align “production plans with expected demand.”
Furthermore, Lucid Motors is working to launch a luxury robotaxi service by the end of the year in collaboration with Uber and Nuro. Uber has agreed to purchase at least 35,000 Lucid vehicles equipped with Nuro technology for this initiative over the coming years, including 10,000 Gravity SUVs and 25,000 vehicles based on an upcoming midsize electric platform.
