Key facts
- Lucid Motors denied rumors that it was considering bankruptcy or going private.
- The company stated it has sufficient liquidity to fund operations well into 2027.
- Lucid is working with advisory firm AlixPartners to improve operations.
- The company plans to launch its mass-market midsize SUV, the Cosmos, by the end of 2026.
- The Cosmos is expected to be priced below $50,000.
Lucid Motors has forcefully denied rumors that it is considering bankruptcy or a transaction to take the company private. The luxury electric vehicle maker filed paperwork with the SEC on Tuesday, refuting articles from EVs.com that cited anonymous sources. Lucid also issued a cease-and-desist letter to the publication.
Silvio Napoli, Lucid's CEO, stated in a LinkedIn post that the reports are false and that the board has not explored such scenarios. Nick Twork, Lucid's communications chief, also pushed back on X, asserting the company has sufficient liquidity to operate well into next year and has not formed a special board committee to explore the reported scenarios.
The rumors sent Lucid's stock on a volatile ride, with shares dropping from an opening of $5.53 on Tuesday to a midday low of around $2.40. By Wednesday, the stock had recovered more than 18%.
Lucid confirmed it is working with AlixPartners, a firm known for corporate turnarounds, to help improve its operations and execution, not to prepare for bankruptcy. Napoli, who took over as CEO on June 1, has prioritized turning the company around.
The company is currently navigating the challenging phase for startup automakers, often referred to as the 'valley of death,' where significant cash is burned while aiming for mass-market profitability. Lucid reported a loss of over $1 billion last quarter. At the end of the quarter, Lucid had $3.2 billion in total liquidity, which it stated would increase to about $4.7 billion on a pro forma basis with subsequent financing, enough to fund operations well into 2027.
Lucid has undergone two major layoff events this year, cutting 12% of its workforce in February and 18% in June. Napoli has also overseen significant C-suite changes, including the elimination of the Chief Operating Officer position and the departure of the Chief Financial Officer.
The company has faced challenges in building sales momentum for its current lineup, with deliveries falling below analyst estimates. Lucid is offering substantial incentives on its 2026 Gravity SUVs, including 0% financing for up to six years.
The company's most significant test is its upcoming mass-market vehicle, the midsize SUV expected to be called the Cosmos. This vehicle is slated for production by the end of 2026 and is intended to be built on a new platform supporting vehicles priced below $50,000. This move would place Lucid in direct competition within the highly competitive American auto market, facing rivals like Rivian's R2, Tesla's Model Y, and established electric and gasoline-powered SUVs from major manufacturers.