Lucid Group (LCID) shares crashed nearly 50% on Tuesday after a report raised bankruptcy fears. The stock fell so fast that exchanges paused trading three times.

The report claimed the electric vehicle (EV) maker may go private or file for bankruptcy. Lucid quickly denied it, yet the panic erased about half of its market value in one day.

Why the Lucid Stock Crash Ran So Deep

The panic started with a report from industry outlet EV. It said turnaround firm AlixPartners will soon present options to Lucid’s board. Two of those options reportedly stand out.

• The first is going private, meaning Lucid would leave the stock market.
• The second is Chapter 11 bankruptcy, a legal process that lets a company keep operating while it reworks its debts.

The adviser also reportedly wants Lucid to pause its push into Europe and pour its energy into the Gravity SUV. That vehicle has struggled with quality problems since production began in late 2024.

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The market reaction was brutal. Shares sank as much as 55% and hit a record low of $2.37. At that price, Lucid’s 330 million shares were worth under $800 million.

In November 2021, the company was valued near $90 billion, briefly more than Ford. Nerves were already raw after the SpaceX stock crash.

Lucid Pushes Back as August 4 Earnings Loom

Lucid called the rumors completely false. It said AlixPartners is helping the company run more efficiently, not preparing a court filing.

“AlixPartners is assisting us in that and nothing else and has not recommended bankruptcy to management or the Board. We undertake no duty to update our comments on this matter,” Nick Twork, Chief Communications Officer at Lucid Motors, said in a statement on Tuesday.

He added it has enough cash to last well into next year. BeInCrypto could not independently verify this claim.

Neither Lucid nor Twork immediately responded to BeInCrypto’s request for comment.

Notwithstanding, the clarification likely explains the ongoing LCID stock recovery.

However, the fear has roots in Lucid’s own numbers. The company lost $2.7 billion in 2025, per its filings. It lost another $1.03 billion in the first quarter of 2026, nearly triple the year before. That quarter, building cars cost $594 million against $282 million in sales.

That gap explains the constant need for fresh money. Lucid raised about $1.05 billion in April, including $200 million from robotaxi partner Uber. In July, it reportedly borrowed $800 million more from an affiliate of Saudi Arabia’s Public Investment Fund, its majority owner.

“So u are working with AlixPartners, one of the largest chapter 11 advisors but have had no reorganization talks??,” one user challenged.

Silvio Napoli, the former Schindler boss who became CEO on June 1, has been cutting costs and jobs since.

The next big test comes on August 4, when Lucid reports first-half results. Investors will watch closely, alongside Tesla’s bullish chart setup and July’s US stocks to watch.

Source: BeInCrypto