Teslaconomics
Long-Term Investor in Tesla, SpaceX & xAI/X
Lucid looks to be in serious trouble after reports it hired AlixPartners, one of the world's biggest Chapter 11 restructuring firms. It has not filed for bankruptcy, and Lucid called the rumors false, citing liquidity well into next year, but hiring such a firm suggests otherwise. Elon Musk has long warned Lucid is tracking toward bankruptcy, and building millions of EVs at scale, controlling costs and turning a profit is far harder than designing an attractive car. x.com x.comÂ
Lucid is easily a strong sell, even after its shares jumped 103% when the company denied bankruptcy rumors. x.comÂ
Lucid's denial of a bankruptcy rumor is not reassuring. Lucid said it has sufficient liquidity, formed no special board committee and that AlixPartners did not recommend bankruptcy. But as @wholemars notes, you don't call AlixPartners when things are going well, and hiring a restructuring firm for routine cost optimization, rather than firms like BCG, McKinsey or Bain, raises doubts. x.com x.com x.comÂ
Lucid Group remains on track to bankruptcy. x.com x.comÂ
Lucid is effectively at zero and headed for bankruptcy because its Saudi backers have stopped funding it. Uber's $300M investment in Lucid is now worth zero as well. A Zerohedge headline notes Lucid says AlixPartners has not recommended bankruptcy. x.com x.comÂ
Lucid faces bankruptcy risk because Saudi Arabia's PIF, wrecked by poor investments, will cut future funding as it did with LIV Golf. The rumor that sent shares down 45% came from a blogger, but there is zero chance the Saudis keep backing the company. The car is fine but badly overpriced for its limited abilities: a $115,000 GT is like paying double for a Toyota Camry. x.com x.com x.comÂ
Lucid is not worth a penny, let alone $1 billion, without a clear path to profitability on limited capex. x.comÂ
Lucid is probably headed to zero, and Uber's $300 million bet on it, a moonshot to eventually compete with Waymo and Tesla in fully autonomous driving, looks like money tossed at a failing company. Yahoo Finance reports Lucid shares plunged on reports it is weighing going private or Chapter 11. x.comÂ
Lucid is a capital-burning machine with no sign of turning around, and its latest update does nothing to ease bankruptcy concerns. Free cash flow is negative $2.9 billion so far this year, accumulated losses total $17.6 billion, and the burn keeps growing. Lucid cites organizational changes, leadership transitions and $1.4 billion of identified 2026 cash-flow improvements, which are long overdue. x.com x.com x.com x.com x.com x.comÂ
Lucid is reportedly debating bankruptcy options, and a downtrending stock and product are not something to be part of. x.com x.com x.comÂ
Lucid is dead money as the EV hype cycle and subsidy tailwinds fade, especially under the Trump administration. Tesla is the only dominant EV player, and Rivian may survive long term only with near-flawless execution; everything else, including Lucid, is dead money. x.comÂ
