During trading hours, a 57% plunge and multiple trading halts! Lucid (LCID.US) hires restructuring advisors to turn around its declining business, and denies bankruptcy rumors.

Lucid Group (LCID.US) is working with restructuring advisors to turn around its business difficulties, while clarifying rumors of considering bankruptcy as "completely untrue." In mid-Tuesday trading, Lucid's stock price dropped 57% at one point, marking its largest single-day decline in history, before the loss narrowed to 16.15% by the end. Due to the significant volatility in its stock price, trading of the stock was halted multiple times. Insiders revealed that consulting firm AlixPartners has been hired to conduct a comprehensive review of all of Lucid's operations. The goal for this car manufacturer is to optimize its operations, reduce costs, and ensure the successful launch of its new mid-size car. Lucid later confirmed in a statement that the company is collaborating with AlixPartners. Lucid stated on Tuesday, "The company has sufficient liquidity to sustain operations until next year." The company's current focus is on enhancing execution and operational efficiency. "AlixPartners is only assisting us in this regard and has not been involved in any other aspects, nor has it suggested to management or the board to apply for bankruptcy." As of Tuesday's closing, Lucid's stock price has already fallen by 56% this year. The electric car manufacturer is deeply troubled. Since its reverse merger listing in 2021 for about $4 billion, its adjusted profits have yet to turn positive. As of March 31, the company's long-term debt (excluding lease liabilities) is about $2.76 billion, with cash reserves of about $700 million. In recent weeks, Lucid has suspended production guidance, initiated operational reviews, and announced large-scale layoff plans. The new CEO, Silvio Napoli, is restructuring the management team comprehensively, including the removal of the COO position and the appointment of a new CFO. As one of the few US companies dedicated to pure electric racing, Lucid currently produces two models: the Air Deluxe sedan and the Gravity SUV. The company is also focusing on developing a mid-size platform, with an emphasis on autonomous driving technology, including a partnership with Uber Technologies, Inc. Lucid continues to face multiple challenges such as production bottlenecks, supply chain failures, and rising costs. Coupled with the Trump administration's tariff increases and cancellation of incentives for electric vehicle consumption, the operational pressure has intensified. The overall sales of electric vehicles in the US have declined, prompting many car manufacturers to reassess their pure electric vehicle strategies and shift their investments towards fuel-powered models. It is currently unclear whether Lucid will take more drastic measures if this restructuring effort is unsuccessful. During the launch of the new car, the company has relied on funding support from its largest shareholder, the Saudi Public Investment Fund, to sustain its operations. Media reports on Tuesday suggested that strategic options being considered by Lucid include privatizing the company or filing for bankruptcy protection under Chapter 11 of the US Bankruptcy Code. Needham analyst Chris Pierce stated that if Saudi Arabia withdraws its funding support, Lucid's bankruptcy is "not impossible," but "Saudi support has always been consistent." Needham's model predicts that Lucid will need to raise over $5 billion in funding over the next three years.