Lucid's stock dropped 40% due to a bankruptcy rumor originating from an EV blog, but a denial was issued just a few hours later.

      Lucid's stock plummeted by 40% at one point during the day following a report about potential bankruptcy, which the company has denied. AlixPartners chose not to comment on the situation. Lucid stated that these rumors are "completely false."

      On Tuesday, Lucid Motors' shares dipped over 40% at one stage and experienced multiple trading halts due to volatility, triggered by a report from an EV-centric outlet that claimed the company was contemplating going private or seeking Chapter 11 bankruptcy protection. After recovering some of its losses, the stock closed down 16% at $4.62 per share.

      According to the report, Lucid had engaged AlixPartners for a review of these options to present findings to the board prior to its next meeting. It also mentioned that AlixPartners suggested the board explore further restructuring in the US and Europe while concentrating on the Gravity SUV. AlixPartners did not provide any comments.

      Lucid refuted the report, asserting it is "completely false." The company emphasized it has "sufficient liquidity to sustain its operations well into next year" and stated that it has not set up a special board committee to consider the scenarios mentioned. Lucid added, "AlixPartners is assisting us with that and nothing else and has not proposed bankruptcy to management or the Board." Last month, under new CEO Silvio Napoli, the company reduced its workforce by 18% as part of a cost-cutting initiative and missed Wall Street's projections for Q2 delivery results earlier this month.

      Lucid is significantly backed by Saudi Arabia's Public Investment Fund, which holds nearly 57% of the company and has consistently provided funding to keep operations running. The company paused production guidance in May while Napoli assessed business strategies, citing the need to decrease "elevated inventory." The EV manufacturer has encountered slower-than-anticipated market acceptance, the loss of the $7,500 federal tax credit, and regulatory changes during the Trump administration. At least a dozen EV models are set to be discontinued or paused by 2026 as the US market contracts, and Lucid faces similar challenges, albeit with considerably less scale than its competitors.