Lucid Group Inc. (NASDAQ: LCID) rejected bankruptcy rumours on Tuesday after a blog report triggered a dramatic selloff that briefly erased more than half of the electric vehicle maker’s market value before investors reassessed the claims amid broader optimism surrounding the company’s long-term prospects.
The company called the report “completely false” and said it has enough cash to fund operations well into next year. Lucid also denied creating a special board committee to examine either a private buyout or a Chapter 11 bankruptcy filing.
The report claimed restructuring adviser AlixPartners had prepared several scenarios for Lucid’s board. Those options reportedly included taking the company private or seeking bankruptcy protection, although the blog said no final decision had been reached.
However, Lucid said AlixPartners is helping improve operational execution rather than recommending bankruptcy. The adviser did not immediately respond to Reuters’ request for comment.
The denial followed one of the stock’s most volatile trading sessions since the company went public. Lucid shares have lost roughly 99 per cent of their value since their market debut as investors questioned the company’s ability to reach profitability.
Meanwhile, the sharp decline contrasted with renewed buying interest that returned later in the week. By Friday, Lucid shares climbed about 15 per cent during intraday trading as investors focused on improving industry conditions and several company-specific developments.
California’s new electric vehicle incentive program helped fuel that optimism. The legislation provides incentives for certain higher-priced electric vehicles while excluding automakers that are not headquartered in California, creating a potential advantage for Lucid and Rivian Automotive Inc. (NASDAQ: RIVN) over Tesla Inc. (NASDAQ: TSLA).
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Lucid plans to reduce its U.S. workforce
Additionally, investors continued watching Lucid’s expanding role in autonomous vehicle development. The company supplies Gravity sport utility vehicles for the robotaxi partnership involving Uber Technologies Inc. (NYSE: UBER) and autonomous driving company Nuro.
Uber previously committed more than USD$300 million toward the initiative. Initial deployments are expected between 2026 and 2027 in cities including San Francisco and Houston.
Lucid has also introduced several operational changes under chief executive officer Silvio Napoli, who assumed the role in June. The leadership transition marked another effort to improve execution after years of production challenges.
Furthermore, the company recently appointed Alexander De Bock as chief financial officer while naming new executives to oversee technology, customer operations, transformation and digital functions. It also eliminated the chief operating officer position as part of a broader restructuring.
Last month, Lucid announced plans to reduce its U.S. workforce by about 18 per cent. Management said the layoffs would lower costs and simplify the company’s organizational structure.
In May, Lucid suspended its 2026 production forecast of 25,000 to 27,000 vehicles after supplier issues disrupted deliveries of its Gravity SUV. The company said it will issue updated guidance once its strategic review concludes.
Additionally, Lucid reported stronger production and delivery numbers during the second quarter. The automaker built 4,774 vehicles and delivered approximately 3,953 units, representing roughly 20 per cent year-over-year delivery growth.
The company also strengthened its financial position earlier this year through an approximately USD$800 million loan from an affiliate of Saudi Arabia’s Public Investment Fund. The sovereign wealth fund has invested billions of dollars in Lucid since its early development.
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Analysts views are mixed
Investors remain concerned about persistent losses, heavy cash burn and repeated fundraising. Those issues have weighed on the company’s valuation despite new vehicle launches and technology partnerships.
Lucid has also expanded compatibility with Tesla’s Supercharger network, giving customers access to a much larger charging infrastructure. Industry observers believe broader charging access could make the company’s vehicles more attractive to prospective buyers.
Analysts continue to hold mixed views on the stock. Consensus ratings generally remain at Hold, while average price targets sit near the USD$7 to USD$8 range as investors await Lucid’s next earnings report, scheduled for Aug. 4.
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