Lucid Motors denies report it’s considering bankruptcy
Lucid Motors is denying a report that it’s weighing filing for Chapter 11 bankruptcy protection. Nick Twork, the company’s chief communications officer, told TechCrunch in
Lucid Motors is denying a report that it’s weighing filing for Chapter 11 bankruptcy protection. Nick Twork, the company’s chief communications officer, told TechCrunch in a statement that the “rumors are completely false.” “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,” he said. “Our focus is on improving execution, strengthening operations, and positioning Lucid to realize the full potential of its technology, products, and innovation.” Lucid’s denial comes after its stock price sunk more than 50% on Tuesday, its biggest intra-day drop ever, according to Bloomberg News.
The stock has recovered from the free fall, and was trading at $4.72 a share as of 2:46 p.m. ET, about 14% lower than its opening price. The company recently named a new CEO and has laid off more than 2,000 employees this year as part of a sweeping restructuring ahead of the expected launch of its smaller, more affordable electric SUV later this year. Earlier Tuesday, an electric vehicle blog published a report citing two unnamed sources who said the company was considering either filing for Chapter 11 bankruptcy protection or going private on the recommendation of consulting firm AlixPartners. Twork said AlixPartners is assisting Lucid on strengthening its operations and “nothing else and has not recommended bankruptcy to management or the Board.” AlixPartners has been a go-to consulting firm for struggling electric vehicle companies in recent years.
Lordstown Motors tapped the firm in 2021 after its CEO and CFO resigned, in an attempt to restructure its nascent business. The startup ultimately partnered up with Taiwanese electronics giant Foxconn, though that relationship soured and Lordstown Motors went out of business. Faraday Future also brought in AlixPartners to try and implement recommendations made by its board of directors in the wake of an internal probe in 2022. Lucid Motors recently revealed that it delivered 3,953 vehicles in the second quarter of this year, only slightly more than it shipped in the same period last year. It has historically struggled to find buyers for its luxury EVs, despite their impressive technological specs. Along with the latest round of layoffs announced earlier this month, Lucid also said it would eliminate a second production shift at its Arizona factory as it aligns “production plans with anticipated demand.” Lucid Motors is also trying to get a luxury robotaxi service off the ground by the end of this year with partners Uber and Nuro.
The BriefWire