Lucid hires AlixPartners as EV sales slump pressures liquidity

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Lucid hires AlixPartners amid EV slump

Highlights

Lucid hires AlixPartners for operational improvement as Q2 stock falls as much as 56 percent before recovering to close down 16 percent on Tuesday.
BNP Paribas estimates Lucid needs to raise $2bn in the next 12 months and $4bn by 2030 amid consecutive net losses of $2.7bn for 2024 and 2025.
Q2 deliveries rise 19 percent year-on-year to 3,953 vehicles but miss analyst estimates of 4,600, signaling weaker-than-expected demand despite cost cuts and model launches.

Operational overhaul amid market and financing strain

As reported by Financial Times, Lucid says it has hired AlixPartners to help improve execution, strengthen operations and better position the company to capitalise on its technology, products and innovation. The carmaker denies reports that the advisers have recommended bankruptcy, calling the claims false after its stock falls as much as 56 per cent in Tuesday trading before recovering to close down 16 per cent.

AlixPartners is known for advising on Chapter 11 bankruptcy and the 2009 reorganisation of General Motors, but Lucid says its current mandate is focused on operational improvement rather than insolvency planning. The company adds that it has sufficient liquidity to continue operating well into next year.

Lucid remains under financial pressure as it posts net losses of $2.7bn in both 2024 and 2025. BNP Paribas analysts estimate in May that the company needs to raise about $2bn in outside capital over the next 12 months and $4bn by 2030, while adjusted free cash flow stands at negative $1.4bn in the quarter to the end of March.

Saudi backing, production footprint and demand challenges

Saudi Arabia's Public Investment Fund has been central to Lucid's financing since the company listed in 2021, providing more than $8.5bn in investment and credit lines. Lucid also raises $1.1bn in capital in mid-April, including an additional $200mn equity investment from Uber, which agrees to buy at least 35,000 vehicles for a robotaxi service and becomes the company's second-largest shareholder.

The company operates two plants in Arizona and opens Saudi Arabia's first car manufacturing facility in 2023 as part of the kingdom's Saudi Vision 2030 diversification strategy. Even so, Lucid faces weakening EV demand in the U.S., worsened by the Trump administration's cancellation of EV credits and reversal of climate policies.

Second-quarter deliveries rise 19 per cent from a year earlier to 3,953 vehicles, but still miss analyst forecasts of 4,600 units, pointing to softer-than-expected demand for the Gravity SUV despite a lower-priced version starting at $79,900. The company is also cutting costs through layoffs, announcing last month that it is reducing its workforce by 18 per cent after a separate 12 per cent cut in February, while recently appointing former Schindler executive Silvio Napoli as chief executive and replacing its chief financial officer.

In our earlier coverage of Lucid Motors’ stock volatility and bankruptcy rumors, we noted that shares plunged sharply on speculation the EV maker was weighing strategic alternatives such as going private or seeking Chapter 11 protection. Lucid rejected those claims as false, said it had liquidity to operate well into next year, and framed AlixPartners’ role as focused on improving execution while the company continues cost cuts, leadership changes, and a reassessment of production guidance amid softer EV demand.

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