Lucid plunges 57% as EV maker hires restructuring adviser AlixPartners

Lucid Group Inc.'s decision to hire restructuring adviser AlixPartners sent its shares down as much as 57%, the biggest intraday drop on record for the struggling electric-vehicle maker.

"The rumors are completely false," Nick Twork, Lucid's head of communications, said in response to reports that the company was considering bankruptcy. "AlixPartners is assisting us in improving execution and strengthening operations, and nothing else."

The stock, which fell to as low as $2.37 before recovering, closed at $4.62 — down 16% on the day — giving the Newark, California-based company a market value of about $1.8 billion. Trading was halted multiple times during the session because of volatility. Lucid delivered about 3,950 vehicles in the second quarter, up from roughly 3,100 in Q1, while production fell to 4,774 units from 5,500. The company lost more than $1 billion on about $282 million in sales in the first quarter.

The appointment of AlixPartners comes about a month after Lucid cut 18% of its U.S. workforce and weeks after new Chief Executive Officer Silvio Napoli took over. The company said it has sufficient liquidity to fund operations well into next year and will report second-quarter results on Aug. 4. The stock has lost more than 75% of its value over the past 12 months.

AlixPartners has been tasked with examining all aspects of Lucid's operations, including cost-cutting measures and ensuring the successful rollout of a new mid-size vehicle, according to people familiar with the matter. The consultancy has not recommended bankruptcy to management or the board, the company said.

Napoli, who arrived last month nearly 18 months after former CEO Peter Rawlinson stepped down, has pushed through a series of executive changes. The new leadership team faces the challenge of reversing a cash burn that has eroded investor confidence in the maker of the Air sedan and Gravity SUV.

Lucid's struggles mirror broader headwinds in the EV sector, where high interest rates and cooling demand have squeezed cash-burning startups. Rivals including Rivian Automotive Inc. have also faced margin pressure, though Rivian has benefited from a partnership with Volkswagen AG. Lucid's largest shareholder is Saudi Arabia's Public Investment Fund, which has provided crucial financing but has signaled a desire for the company to achieve greater operational independence.

This article is for informational purposes only and does not constitute investment advice.