In response to circulating market speculation regarding potential bankruptcy restructuring, U.S. electric vehicle manufacturer Lucid Group Inc (NASDAQ: LCID) issued an official statement on July 14th, firmly denying the rumors. The company emphasized it currently holds sufficient liquidity to fund its operations into next year and has not established any special committee to evaluate bankruptcy or privatization options.
Previously, an electric vehicle industry blog, citing anonymous sources, reported that Lucid Group Inc was considering filing for Chapter 11 bankruptcy protection or going private, following advice from the global consulting firm AlixPartners. This news caused significant market volatility, leading to a plunge of over 50% in Lucid Group Inc's share price during Tuesday's trading session, marking its largest intraday decline since going public. Although the stock price recovered some ground later, it still closed down approximately 14% at $4.72 per share.
Addressing this, Lucid Group Inc's Chief Communications Officer, Nick Twork, stated in a media release that the bankruptcy rumors were entirely false. Twork clarified that AlixPartners is currently only assisting Lucid Group Inc in optimizing its business operations and has not proposed any bankruptcy recommendations to the company's management or board of directors. He reiterated that the company's current core focus remains on improving execution, strengthening business operations, and fully realizing the innovative potential of its technology and products.
As a once highly anticipated luxury electric vehicle startup, Lucid Group Inc has faced a challenging development path in recent years. Latest data shows the company delivered only 3,953 new vehicles in the second quarter of this year, recording only a slight increase year-over-year, with its products experiencing sustained weak market demand. To address operational pressures and align with projected market demand, Lucid Group Inc announced a new round of layoffs earlier this month affecting 2,000 employees and canceled the second production shift at its Arizona factory.
Currently, Lucid Group Inc is undergoing a significant restructuring. It recently appointed a new Chief Executive Officer and plans to launch a more affordably priced compact electric SUV later this year. Furthermore, the company is partnering with Uber and autonomous driving company Nuro, aiming to launch a luxury robotaxi service by the end of this year. Under the established agreement, Uber will purchase at least 35,000 Lucid Group Inc vehicles equipped with Nuro's autonomous driving system over the coming years, including 10,000 Gravity SUVs and 25,000 new models based on its next-generation midsize vehicle platform.