Lucid denies bankruptcy rumour amid European restructuring talk

Lucid Motors shares plunged as much as 40% on Tuesday before closing down 16% at $4.62, after an EV publication claimed the company was exploring a private buyout or Chapter 11 bankruptcy protection.

The carmaker swiftly rejected the report as “completely false.” Lucid stated it has “sufficient liquidity to carry its operations well into next year” and insisted it has not formed a special board committee to review bankruptcy or going private.

For European investors and industry watchers, the sudden turbulence underscores the spreading pain across the transatlantic EV sector. The unverified report claimed restructuring advisers AlixPartners had specifically urged Lucid's board to restructure its operations in both the US and Europe. The alleged strategy was to abandon broader ambitions and focus solely on its upcoming Gravity SUV. AlixPartners declined to comment on the record.

Lucid confirmed that AlixPartners is actively assisting the company but insisted the firm "has not recommended bankruptcy to management or the Board." Still, the mere suggestion of a European pullback or restructuring highlights the immense difficulty startups face when trying to establish a foothold on the continent against legacy brands.

The market reaction reflects deepening anxiety over capital-intensive EV manufacturers. Lucid, which is nearly 57% owned by Saudi Arabia’s Public Investment Fund, has already slashed 18% of its global workforce over the past month under new CEO Silvio Napoli. The cost-cutting drive follows missed Wall Street delivery estimates for the second quarter and a decision in May to suspend production guidance entirely to address what the company called “elevated inventory.”

Lucid is now navigating a brutal US market contraction that serves as a warning for European manufacturers. The company has been hit by the loss of a $7,500 federal tax credit and shifting regulations under the Trump administration. With at least a dozen EV models discontinued or paused in 2026, the competitive landscape is unforgiving. For European observers, the episode demonstrates that even heavily capitalised foreign challengers lack the scale to easily weather the current global EV demand slowdown.