Lucid Is Blaming A Blogger For Losing 57% Of The Company’s Value In A Couple Of Hours

Earlier this summer, while camping with some of the staff, I watched my daughter absolutely wipe out on one of those old metallic merry-go-rounds I’d assumed were long-banned by some children’s version of OSHA. This was on a magical playground made up almost entirely of the steel, wood, and iron playground equipment that impaled, scratched, or burned children like me who grew up in the ’80s and ’90s. I was too far away to help, and even if I had been closer, a dark part of me thought maybe it’s about time she learned that that which brings you joy can also bring you imminent pain.

I had a similar feeling watching the rapid descent and climb of Lucid’s stock yesterday, as hundreds of millions of dollars vanished in minutes over a blog. While the stock has mostly recovered those losses, it required combating the blogger, putting in an emergency filing with the SEC, and eventually threatening that reporter with a scary legal letter. What’s going on? I’m going to get into it, and it might push back The Morning Dump a bit because it’s complicated.

Why are people not buying electric cars? That’s also complicated, though a new report from McKinsey says that while affordability remains an issue, range anxiety is less of a concern than it once was in many places. Will Volkswagen’s new ID.Cross EV SUV help get more Europeans into electric cars? Maybe. Can Volvo grab more market share by bringing back a sedan and wagon? One can only dream.

A Quick Recap Of Yesterday’s Lucid Shitshow

The chart above shows trading so far this week for EV-only American automaker Lucid. You’ll notice that there was very little movement, up or down, over the last few days, and that volumes generally remained stable at about 6-8 million per day. And then, all of a sudden, the stock dropped by 57% and the volume jumped from 6.5 million shares traded on Monday to 33 million shares traded in about 30 minutes. And by traded, I mean mostly sold. The trend reversed itself, and by the second half of the day the stock clawed back most of its losses. As of this writing, the stock is basically back to where it was on Monday.

All this happened without the company announcing anything or releasing any financial data. That’s easily hundreds of millions of dollars changing hands in the course of about a day. So what happened? A blog happened.

Specifically, a blog from EV news site EV, which put a post with the headline “Exclusive: Lucid Weighs Going Private or Chapter 11 as Adviser Reports to Board.” That’s a big scoop for a relatively small site (it doesn’t have enough traffic to register on SimilarWeb and has fewer than 3,300 followers on X). Here’s what the site alleged:

Restructuring adviser AlixPartners has been asked to deliver its findings to Lucid‘s board before its next meeting, two people familiar with the matter told EV on Tuesday.

The strategic options under review include taking the Saudi-backed EV maker private or filing for Chapter 11 bankruptcy protection, one of the sources said.

According to the sources who spoke on condition of anonymity because the review is strictly confidential, AlixPartners is urging the board to run one more round of restructuring in the United States and Europe, and to narrow the company’s focus onto its Gravity SUV

And, just in case you missed it the first time, the site reiterates the most explosive part:

One person close to the matter told EV that the two starker questions, whether Lucid should be taken private or seek Chapter 11 protection, are among the scenarios the adviser has been asked to weigh.

This is a big-if-true situation. In a bankruptcy, it’s likely that much of the value regular shareholders have would evaporate, as the money that could be generated by selling off parts of the company wouldn’t necessarily be enough to cover the existing debt load (basically, you’re not getting paid out before the Saudi Arabian Public Investment Fund). Privatization might not be as bad, but it’s still not something likely to end up great for most shareholders.

Who is this blogger and why did this report move so much of the market? While the EV site has been around for a while, it’s not one that usually gets a lot of attention. That doesn’t mean that the reporting is incorrect. It just means anything written there should be weighed against prior scoops. The site itself seems to be almost solely the work of Cláudio Afonso who, according to his LinkedIn account, is a Portugal-based writer who previously worked as an “Evangelist” for Chinese EV company NIO in Germany.

It appears the report spread quickly on social media–especially Elon Musk-owned X/Twitter–causing the stock to become so volatile that trading had to be halted multiple times.

So why the quick rise? First, Lucid Group Communications Director Nick Twork jumped onto X to quell the rumors:

In an effort to make this clear, especially given the stock price movements, the company went one step further and filed an emergency 8-K with the Securities and Exchange Commission, stating:

Lucid Group, Inc. (the “Company”) announced that the rumors are completely false. The Company has sufficient liquidity to carry its operations well into next year, as recently published in its last quarterly filings, and it has not formed any special Board committee to explore the scenarios reported today. The Company’s focus is on improving execution, strengthening operations, and positioning the Company to realize the full potential of its technology, products, and innovation. AlixPartners is assisting the Company in that and nothing else and has not recommended bankruptcy to management or the Board of Directors of the Company. The Company undertakes no duty to further update the comments on this matter.

It’s one thing to say something in a tweet, it’s another thing to put it in a filing with the SEC in terms of legal liability (though, for what it’s worth, I’ve personally known Twork for nearly two decades while he worked for various automakers and suppliers, and in all that time I can’t recall a single instance where I felt he intentionally tried to mislead or misdirect me).

The immediate response seems to have done enough to salvage the company’s stock price for now.

My reaction in reading the 8-K filing was that it wasn’t entirely clear if the company wasn’t, indeed, at least considering privatization. Twork again answered this in a cease-and-desist letter he says he sent to Afonso and posted to social media, stating that Lucid didn’t ask AlixParnters to “evaluate, analyze, present, or otherwise consider those alternatives.” Just to be 100% sure I asked Twork this morning if they were specifically stating that the report of privatization was also being denied; he said that they unequivocally were.

That letter also points to reporting from other outlets claiming the dip was due to the report and that Afonso’s actions “caused serious injury to a number of investors. And they injured, and continue to injure, Lucid directly.”

EV hasn’t backed down, writing later in the day yesterday that it “stands by its reporting.”

I draw two major conclusions from this.

First, blogging is a dangerous business in a market that reacts to everything and has been increasingly populated by retail investors with Robinhood accounts in the fallout from the Game Stop short squeeze. Stampedes like this are not only likely to happen more often, they’re likely to get worse as the ability to sort between reliable and unreliable reports gets harder to do (made, in some cases, worse by AI tools).

Second, Lucid is particularly at risk for these sorts of disruptions because the company is in the middle of a massive restructuring, continues to lose unbelievable amounts of money, and lacks an obvious direction. The reporting was correct that AlixPartners was brought in to assist the new permanent CEO, which is a sign that the company isn’t exactly healthy.

Lucid currently has enough cash to make it into the next year when its supposed to be launching its midsize offering and helping build Uber robotaxis. If those plans don’t hit, or if there aren’t enough customers, the report may be wrong about specifics and timing, but not the outcome.

Range Anxiety? What Range Anxiety?

While we’re on the topic of consulting firms, everyone’s favorite slidemaker McKinsey is out with a global survey of customers and it seems like people are maybe less worried about range than before:

In past surveys, many consumers stated that they were delaying an EV purchase while waiting for vehicles with a longer driving range. The recent increase in battery capacity by OEMs may now be allaying these fears, however (Exhibit 4). While range anxiety was the second highest concern in 2023, it dropped to eighth place in 2026. Only about 20 percent of consumers who are skeptical of EVs cite driving range as a reason to refrain from going electric, down from 45 percent just three years ago.

Even in the United States, the number of people who are considering an EV jumped from 11% of respondents to 17%, although that trails China, Germany, and the UK by a large amount.

The VW ID.Cross Looks Decent

If you’re an American, you probably don’t know what a Volkswagen T-Cross is, but it’s a subcompact crossover (think Polo or Puma) that’s popular in Europe. The ID.Cross is a roughly T-Cross-sized EV for Europe with some interesting ID.Buzz-like details.

From the company:

The new ID. Cross is 4,153 mm long, 1,581 mm tall and 1,794 mm wide. The wheelbase is 2,601 mm. Compared with the T-Cross model with combustion engine, the ID. Cross (thanks to the MEB+ platform) scores points with more space for five passengers and their luggage. The ID. Cross offers 475 litres of stowage space – 20 litres more than the T-Cross. This is achieved above all with the help of an additional area under the variable boot floor, which offers space for up to two crates of drinks. In addition, the new electric SUV features an extra small luggage compartment (frunk) under the bonnet, which can hold a further 25 litres – an ideal place for the charging cable and small bits and bobs.

It’ll be FWD only, gets up to 265 miles on the more city-oriented WLTP standard, and should start at about $32,000.

Is Volvo’s Next Wagon Going To Be An EV?

I really love the non-CC Volvo V90, and the loss of wagons and sedans from the Volvo lineup is a pretty big deal. Earlier this year, Volvo’s CEO Hakan Samuelsson told a room full of reporters I was in that it wouldn’t be great if Volvo was only SUVs in the future.

What could a wagon look like? Per Automotive News, probably an EV:

The Swedish automaker is studying a sedan and station wagon that could arrive in U.S. showrooms in 2028, a person briefed on the discussions told Automotive News.

Because these vehicles already are being developed for Europe, adapting them for the U.S. wouldn’t be very difficult, the person said.

The electric models would carry the familiar 60- or 70-series badging and be built in Europe. A rugged Cross Country variant of the wagon also is possible.

An EV wagon is better than no wagon, but an EREV wagon would be even cooler.

What I’m Listening To While Writing TMD

It’s “Disco Science” from Franco-Afghani artist Mirwais. Yes, the lasers are coming from where you think they’re coming from in this video.

The Big Question

Whom do you trust on the Internet?

Top photo: LinkedIn/Lucid/Google Finance