Lucid's Pivotal Decisions
Lucid Group Weighs Going Private or Chapter 11 as Adviser Urges Gravity Focus
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Key Points
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AlixPartners has advised Lucid's board to narrow the focus to the Gravity SUV, push one more restructuring round in the US/Europe, temporarily hold back the Lucid Air, and push ahead with Gravity production along with Uber robotaxi collaborations and the AMP-2 Saudi plant, while keeping Cosmos on schedule for late this year.
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The restructuring adviser is expected to present its findings to Lucid’s board before the next meeting, signaling a concrete decision point on the strategic options.
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Lucid’s stock reaction to the news included rapid moves in pre-market trading, with shares around $5.51 pre-market and ongoing speculation about a take-private due to the gap between the Saudi backer’s investments and current share prices.
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The Gravity SUV remains under scrutiny for quality issues, which have persisted since late 2024, underscoring the urgency of focusing resources on Gravity rather than current Air production.
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Earlier reporting highlighted the market’s negative reaction to the take-private/bankruptcy review, including a spike in attention after Electric-Vehicles.com cited the review, with Lucid shares plunging as much as 49% in related coverage.
Lucid Group's stock collapsed more than 40% on Tuesday after reports surfaced that the struggling electric vehicle maker had hired restructuring adviser AlixPartners to evaluate options including going private or filing for Chapter 11 bankruptcy, according to CNBC. Lucid quickly denied the bankruptcy claim, but shares still closed around 20% lower as investors absorbed the uncertainty, Yahoo Finance reported.
The company confirmed it is working with AlixPartners but pushed back hard on the bankruptcy narrative. The episode exposed just how fragile confidence in Lucid has become, with its market cap sitting near $2.15 billion despite billions in backing from Saudi Arabia's Public Investment Fund.
AlixPartners Pushes Lucid to Bet on Gravity SUV
AlixPartners has urged Lucid's board to narrow its focus sharply. The adviser recommended one more round of restructuring in the US and Europe, according to Crypto Briefing. The plan would temporarily hold back production of the Lucid Air sedan and pour resources into the Gravity SUV instead.
The adviser also told the board to push ahead with a robotaxi collaboration with Uber and the AMP-2 manufacturing plant in Saudi Arabia. The Cosmos model is still expected to stay on track for a late 2025 launch. AlixPartners is expected to present its full findings to the board before the next scheduled meeting, creating a hard deadline for a decision.
Gravity SUV Quality Problems Fuel the Crisis
The Gravity SUV has suffered persistent quality issues since late 2024. Those problems are a key reason AlixPartners wants to focus resources there rather than spread them thin. Lucid cannot afford to launch a flawed flagship product in a market already skeptical of its long-term survival.
The Lucid Air, once the company's crown jewel, would be deprioritized under the proposed plan. Slowing Air production frees up cash and engineering bandwidth. The logic is straightforward: fix Gravity first, prove the company can execute, then worry about the rest of the lineup.
Stock Plunged 49% Before Lucid Denied Bankruptcy Report
The chaos began when Electric-Vehicles.com reported that Lucid was weighing Chapter 11, sending shares down as much as 49% at their worst point, CNBC reported. Pre-market trading had shares around $5.51 before the freefall. The speed of the drop showed how little room for error investors give Lucid at this stage.
Lucid then issued a denial, calling the bankruptcy report inaccurate. Shares pared some losses after the statement, ending the day down roughly 20%, according to Yahoo Finance. TipRanks noted that Lucid confirmed AlixPartners was retained but framed the engagement as routine strategic consulting, not a prelude to insolvency.
Saudi Backing Keeps Take-Private Speculation Alive
Saudi Arabia's Public Investment Fund owns a majority of Lucid and has poured billions into the company. The current share price is far below what the Saudis paid per share in earlier funding rounds. That gap keeps speculation alive that the PIF could buy out public shareholders and take Lucid private at a premium.
No decision has been made, and the board has not committed to any path, TechCrunch reported. But the options on the table — going private, restructuring, or bankruptcy — signal that Lucid's leadership knows the status quo is not sustainable. The next board meeting is shaping up as a pivotal moment for the company's future.
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