"The rumors are completely false": Lucid denies risk of bankruptcy, shares soar 30%

Shares of electric vehicle manufacturer Lucid Group soared by more than 30% during trading on Wednesday, July 15. This came after a 16% plunge the previous day following a report by Electric Vehicles claiming that the company was considering bankruptcy or delisting as business options. Lucid denied these claims, and that was enough for investors to resume buying shares after the sharpest decline in the company’s history.

"Lucid Group states that the rumors are completely false." “The company has sufficient liquidity to continue operations for a significant portion of next year, as indicated in its latest quarterly report, and has not formed any special committees of the board of directors to examine the scenarios that have been reported,” the company said in a filing with the U.S. Securities and Exchange Commission.

In its financial report published on May 5, Lucid stated that its liquidity as of the end of the first quarter stood at $3.2 billion, giving it “flexibility to finance operations, scale production [the Lucid Gravity crossover] and investing in future platforms through the second half of 2027.”

There are currently no apparent reasons for Lucid to file for bankruptcy, according to Cantor Fitzgerald analyst Andrés Sheppard, as quoted by Barron's. As of the end of March, the company had approximately $2.5 billion in unused credit lines, the analyst noted. In April, the company raised another $750 million, including a $200 million investment from Uber. Sheppard recommends holding Lucid shares (Hold rating) with a price target of $8, which implies 45% upside potential relative to the July 15 intraday high.

Lucid will report its second-quarter financial results on August 4. Sheppard believes that investors will then hear for the first time from the new CEO, Silvio Napoli, about the company’s strategy to accelerate its path to profitability.

For now, Lucid remains a loss-making company and continues to actively spend cash on business development, Barron’s notes. According to Wall Street estimates cited by Barron’s, the automaker will spend about $2.8 billion over the next 12 months, and positive free cash flow is not expected until at least 2029, according to a FactSet forecast. To achieve positive free cash flow, the company will need to increase its annual deliveries to more than 140,000 vehicles. By comparison, Lucid delivered about 16,000 vehicles in 2025, and analysts expect that figure to rise to approximately 21,000 vehicles in 2026.

Lucid will need to raise about $2.5 billion in 2026 and the same amount in 2027 through debt financing and a new stock offering, Barron's reports, citing estimates by Morgan Stanley analyst Andrew Percoco. A new share offering means a dilution of existing shareholders’ stakes, but this is not unusual for a money-losing startup, the publication noted. Percoco advises selling Lucid shares with a target price of $5.

RBC Capital Markets analyst Tom Narayan lowered his price target for Lucid shares from $8 to $7, while maintaining his “Sector Perform” rating (“in line with the market”), according to Stocktwits. According to Narayan, rising fuel prices may prompt U.S. consumers to buy more compact and fuel-efficient cars, but this will not necessarily lead to increased demand specifically for electric vehicles.

Lucid's stock has fallen 44% since the start of the year. Most analysts recommend holding Lucid shares: they have nine “Hold” ratings versus two “Buy” ratings and three “Sell” and “Underweight” ratings, according to MarketWatch. The average price target of $7.33 implies a 2.7% increase from the July 14 closing price.

This article was AI-translated and verified by a human editor