Lucid Group shares collapsed as much as 57% on 14 July, their steepest intraday drop on record, after a report said the Saudi-backed electric vehicle maker was weighing either a take-private transaction or Chapter 11 bankruptcy protection with restructuring adviser AlixPartners. Lucid confirmed it is working with AlixPartners but called the bankruptcy and take-private speculation “completely false”, emphasising it has enough liquidity to fund operations well into 2027.

Sources told Electric Vehicles, the trade publication which first broke the news, that AlixPartners is not recommending either extreme option to the board. Instead, it has urged one last round of restructuring in the US and Europe, along with a narrower focus on the Gravity SUV, which has faced quality problems since limited production began in late 2024. The advisers have reportedly also told Lucid to pause the Air sedan temporarily, while protecting timelines for the Cosmos midsize model due later this year and the Uber robotaxi programme built with autonomous driving partner Nuro.

The recommendations extend a retrenchment already underway in Europe, where Lucid has delayed its expansion into Austria and Spain following an earlier postponement of its UK launch, reportedly because quality concerns have made the cars difficult for sales agents to sell. Chief Executive Silvio Napoli, who took the reins on 1 June, has told the organisation to become smaller and more focused for at least the next year. In practice, this has meant cutting around 18% of the US workforce, eliminating the Chief Operating Officer role and replacing most of his senior leadership team.

The financial backdrop explains why any strategic option is on the table. Lucid lost about US$2.7bn in 2025 and continues burning roughly US$1bn a quarter, building more vehicles than it sells: 4,774 produced against 3,953 delivered in the second quarter. On 6 July, the EV maker drew upon a further US$800m from a term loan provided by an affiliate of its Saudi backer.

Chapter 11 could render Lucid’s robotaxi agreement with Uber and Nuro void

Lucid’s market value has fallen to around US$2.3bn, less than a quarter of the more than US$9bn Saudi Arabia’s Public Investment Fund (PIF) has invested since 2018, and the stock now trades roughly 90% below the peak it reached shortly after its 2021 SPAC debut. Needham Analyst Chris Pierce told Bloomberg that bankruptcy would be “plausible” if Saudi support were withdrawn, but he caveated such support has been historically “consistent.” Needham’s own model puts Lucid’s capital-assistance needs over the next three years at slightly more than US$5bn.

Bankruptcy and a take-private scheme, both designated as the more extreme options on the table, would lead to materially different outcomes for Lucid. A take-private transaction led by the PIF would keep Lucid operating as a going concern with its existing contracts intact, preserving the robotaxi partnership with Uber and Nuro exactly as structured. A Chapter 11 filing, on the other hand, would introduce court oversight that could reopen or void those same commercial agreements, including terms—specifically the Cosmos launch, the robotaxi deal and the second Saudi assembly plant—which the restructuring plan is explicitly trying to protect.

That would make the PIF’s own calculus the real variable here, since a fund which has already committed more than US$9bn to a company now worth barely a quarter of that sum is unlikely to make a decision on conventional return grounds. Taking Lucid private would let the fund control the pace of restructuring away from public market scrutiny and quarterly share-price swings, while also continuing to support a company central to Saudi Arabia’s Vision 2030 industrial diversification goals regardless of its near-term losses.

Lucid reports H1 2026 results on 4 August: its first full financial update under Napoli and the clearest test yet of whether the current restructuring can close the gap between what the EV maker builds and what it can actually sell.