NEW YORK, July 14, 2026 – Lucid Group (NASDAQ:LCID) saw its stock plummet 44.1% to $3.08 during afternoon trading on Tuesday, wiping out approximately $948 million in common-equity value. The dramatic sell-off nearly matches the $1.05 billion capital package the electric-vehicle maker secured in April, highlighting investor anxiety over the company's financial stability.
Trading volume surged to 71.8 million shares, with multiple trading halts as volatility spiked. The stock touched a session low of $2.49 before recovering slightly. The decline came after a report revealed that restructuring adviser AlixPartners is exploring options for Lucid, including a potential take-private transaction or Chapter 11 bankruptcy filing. The board has not yet approved any of these measures, according to sources cited in the report.
Funding and Cash Burn Concerns
Lucid recently drew $800 million from its delayed-draw term loan on July 6, part of a $2.5 billion credit facility with Ayar, an affiliate of Saudi Arabia's Public Investment Fund (PIF). After a $500 million draw in April and the latest $800 million, approximately $1.2 billion remains available. However, the company's first-quarter operating cash outflow of $1.19 billion, combined with $253 million in capital expenditures, totaled $1.44 billion—exceeding the remaining loan capacity.
April's capital raise included $550 million in convertible preferred stock linked to PIF, $300 million from a public share sale, and $200 million from Uber Technologies (NYSE:UBER). Former CFO Taoufiq Boussaid stated in May that the company had strengthened its balance sheet with over $1 billion in new capital, and Lucid reported pro forma liquidity of $4.7 billion for the quarter-end. However, Tuesday's sell-off suggests investors are focusing on the actual cash available rather than headline liquidity figures.
Restructuring and Cost-Cutting Plans
In June, Lucid announced a restructuring plan that includes cutting 18% of its U.S. workforce and eliminating the second production shift at its Arizona plant. The company expects to save $158 million annually, with $32 million in associated cash charges. On a quarterly run-rate basis, savings of about $39.5 million cover only 2.7% of first-quarter operating and capital spending, underscoring the scale of the cash-burn challenge.
RBC Capital Markets analyst Tom Narayan lowered his price target on Lucid to $7 from $8 on Monday, maintaining a Sector Perform rating and citing liquidity as his top concern. The stock's plunge to $3.08 means it now trades at less than half of even the reduced target.
Operational Metrics
Second-quarter deliveries rose 28% sequentially to 3,953 vehicles, while production fell 13% to 4,774. The gap between production and deliveries narrowed by 66% to 821 units, down from 2,407 in the first quarter. While this indicates reduced inventory buildup, it does not yet signal a turnaround in cash conversion.
PIF held over 50% of Lucid's voting power as of March 31 and is expected to nominate five of nine board members after April 15. This level of control could facilitate additional funding or a sponsor-backed deal, but another quarter of cash burn near Q1 levels could severely limit options.
Lucid is scheduled to report second-quarter results and host an earnings call on August 4 at 17:30 EDT. Market participants will be closely watching for updates on cash balances, inventory movements, remaining loan capacity, and signs that cost-cutting is beginning to stem the outflow.
