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
I want Lucid to succeed but the odds are definitely stacked against them at this point.
TBQ:
The Autopian, NPR, and a couple of YouTube channels:
– What’s Going on with Shipping
– Perun
I look forward to reviewing other’s replies, cause my trusted human world wide web has gotten very narrow.
I haven’t been able to trust NPR for a couple of decades or so, sadly. Not to say they don’t have valuable content, but I don’t have the faith that it’s earnest, transparent, and lacking some sort of agenda that it did decades ago.
Someone made a lot of money on Lucid.
1) Short the stock
2) release fake information to an untrustworthy, but loud, blogger who is desperate for relevance
3) profit
Good point he may believe it is true because someone lied to him. Bloggers aren’t the brightest people they will post anything that gets clicks because they aren’t held accountable for their posts
That would be too easy to catch. Buying when it hit bottom would be harder to detect
The future of Lucid seems far from that.
TBQ: The pickens are getting slim – I think my current trifecta is this place, NPR, and The War Zone.
An EREV wagon from Volvo would be sweet, but I’m not holding my breath (and wouldn’t be able to afford it anyway). I saw a wagon I really liked while over in France, but didn’t know what it was. Turns out it was a SEAT Leon Estate plug-in hybrid. Bright red and parked just down from our Air BnB in Le Mans. I guess they’re built on a VW platform, so maybe that instead of the T-roc Vdub, please?
It was a great looking car – would be the perfect replacement for my 2012 Volt. My daughter got rather tired of hearing me say that every time we walked by it. Overall during the trip I think she was trying to keep track of how many times I said “Hey, check it out – we don’t get those back home.”, but lost count.
That IS a good looking car. If only we could have one…
SEAT and Skoda make the most appealing VAG consumer products. But since they’re VAG I still wouldn’t buy one if it was available here.
“And by traded, I mean mostly sold.”
I’m not great with investing stuff, but doesn’t every sale also mean a buy? You can’t sell a stock to nobody?
You are correct sir.. otherwise making money on the stock market would be easy
I was curious about this, and yes, for someone to sell a stock, someone else has to buy it.
That’s true, but sometimes the company can create stocks to sell out of thin air. If done enough (Musk) it can drive the stock price down, but if there’s enough gullible people (index funds and Musk fans) it’ll bounce back.
EV Volvo wagons would be amazing. My biggest turnoff on Volvos was the weird powertrain choices. It was all 4 bangers, and upper trim stuff had turbos and a supercharger and electrification. The simplicity of an EV hopefully gives you the best of Scandinavian design, with some solid reliability.
I think they were mostly 5 bangers, but I am no expert
I think they dropped the fives a few years ago, opting for forced induction four-pots across the board.
I5s were phased out in the early 2010s along with their I6 modular brethren, replaced with the B4204[xx] 2.0L I4 used throughout the range (at least in North America). It comes in turbocharged, supercharged and turbocharged, and supercharged and turbocharged and with a plug-in hybrid.
Recently (2020?mild hybrids (BISG, belt-driven integrated starter generator) have been added to the models that now have a B engine designation (previously T).
100% of Lucid’s problems were/are because of the whiniest baby in the EV space, Peter Rawlinson. Elon’s a psycho, and sucks in so many ways… but Peter was so miffed at Elon that he focused way, WAAAAAY too much energy on making a sedan that could “beat” a Model S and he ignored everyone’s advice to build a fucking crossover like the entire market was asking for.
Then they came out with the Gravity about a decade too late, and it looks like a minivan.
Fuck that guy, he’s a dick. He left a very shitty bed for others to clean up and then sleep in.
Something to remember when you got multiple people saying different things only one can be right but all of them can be wrong
Fuck that guy, he’s a dick. He left a very shitty bed for others to clean up and then sleep in.
Sounds more like an asshole to me.
We live in the Misinformation Age so stuff like what happened to Lucid are only going to increase.
The fact that we give random individuals the same credibility as experts in their field is the problem. Whether it is the strength of a certain EV automaker, medical advice, politics or anything in between, this problem is not going away. Part of it is simply a lack of critical thinking skills by average Joes, as well as a lot of mistrust of institutions. When marketing departments are allowed to call every new mid product “physics-defying” or “world changing” then regular folks stop believing what companies and institutions say and do.
TBQ: mostly established news sources: CNN, API, BBC in its various guises, the Guardian, NPR.
I don’t trust the networks. At one time I had some faith in the big three; that ship has sunk.
I come here for automotive news to a degree, but most of the news here is either from releases generated by the sources themselves, or else personally witnessed by the individual writing. It’s not this “a friend highly placed in the cleaning company that does the house of a guy highly placed in the company told me over beers…” kind of deal. It isn’t hearsay.
I agree with you on don’t trust but add the ones you trust to not trust as well. I guess the only ones I take as true are the Autopian and my mom when she was alive
Cool song. Very cool. Can’t say that I needed to watch the video though.
There used to be, actually I just checked and it still seems to exist in a different format, a site that allowed people to publish anonymously, but with encrypted logins, stock related rumors. The user accounts were rated on their past accuracy. As far as I could tell and based on conversations with co workers, it was a work around for avoiding insider trading which was a problem where I worked ( rhymed with Disco) because you could only trade on public information, and this site counted as public information, since occasionally it would even get cited in industry media.
It didn’t help me when I got a shitload of stock with a lockup and it lost 85 percent it’s value but I got taxed on the value the day I received it and by the time I could sell it didn’t come close to pay the taxes.
Need a new accountant
Got a new accountant.
New accountant told me about making a straddle trade.
The old accountant specialized in doing taxes for artists, not tech startup founders to be fair.
Of course I got sued for everything I had when my father in law died and left my wife his Madoff account a couple of years latter.
Yes. I had the same problem many years ago. I had to pay taxes and AMT on paper gains I never got. Fortunately. I could afford it (not much). Others lost everything.
Oh yeah the AMT, although that paled in comparison to tha capital gains tax..
My accountant said that “on the bright side, you can take $3000 off your taxes every year for the next 92 years.”
I almost threw a chair at him.
..everyone’s favorite slidemaker McKinsey..
Hmph, McKinsey. The firm famous for telling people nothing about absolutely everything. Or, was it absolutely everything about nothing?
In order to avoid being wrong, consultants have to present enough conflicting facts that it is impossible to make a decision based on them.
Being right is easy, the not being wrong part is really hard.
Definition of a consultant: someone who removes your watch from your wrist, tells you what time it is, and then sells your watch back to you.
Por que no los dos?
When I worked for a consultant, every report ended with the phrase “further research is indicated.”
I worked for a place that used McKinsey. The executive summary called us the “least innovative organization” they had ever studied, the only parts of their report we implemented was to close all regional offices and centralize everything at headquarters, and add the word “Impact” to the names of several departments. They filed for bankruptcy about a decade later
Trust but verify.
Don’t trust until you verify
Regarding Lucid’s shitshow… The best response Lucid’s management can do is to keep turning out great vehicles, fixing current issues and keep working toward profitability.
And the only time to get out the lawyers and making public statements should be if the person/blogger says something outright false.
So if the blogger is lying his/her ass off or if it’s just some AI slop, Lucid is right to set the record straight and threaten the liar with legal action.
“The VW ID.Cross Looks Decent”
It looks ‘generic-CUV-meh’ to me. And I think the ID-naming thing is stupid.
“Whom do you trust on the Internet?”
The Autopian
CBC.CA
BBC.co.uk
theglobeandmail.com
canada.ca
As long as the article cites the author’s sister in law’s hairdresser’s dog walker as a source, I’m pretty comfortable with it being legit.
That ID4 is about the perfect match for my needs. The right size foot print, the right range for me, not too goofy looking (interior to be determined) and even likely an acceptable price. Too bad it’s shaped like an SUV, but I guess that makes it pretty space efficient. VW with all it’s troubles would be wise to try and float this in as many markets as possible. AHEM: North America.
But alas we can’t have nice things over here.
If you don’t like it being an SUV you can always have an ID.Polo, which is a regular hatchback.
I can’t have either since I’m in Canada.
Is it though? Prior to Elon blatantly manipulating the market and getting a meaningless slap on the wrist (never mind all the government officials openly engaged in market manipulation), I would have agreed with that. Today though? Not so sure.
There has been a lot of improvement in EV infrastructure in the past 3 years. 5-ish years ago I couldn’t do some drives that I take semi-regularly, even in a 300 mile EV, because there were no chargers along the route. Now, it’s a piece of cake (at least theoretically, I don’t own an EV and am basing this off charger maps).
I can’t justify replacing my Prius right now, but when the time comes an EV is definitely on the table, which was not the case a few years ago when I bought the Prius.
Never manipulated the market as he was stating an opinion. But given he is a news source sites reporting his off the cuff remarks as a company news release kind of screwed things up.
Disco Science, eh?
Someone didn’t happen to watch Snatch recently, did they?
I love that whole soundtrack.
Wasn’t familiar with the channel. I looked it up. I got a lot of sites showing me pictures of nono spots
I’m not sure what channel you’re referring to, I’m referring to the 2000 Guy Ritchie movie that stars Jason Statham, Brad Pitt, and several other big names.
Just a masterpiece of a movie, infinitely quotable.
“Disco Science” from Franco-Afghani artist Mirwais
Matt,
Just what did you imbibe last night (or immediately before) that made “listening” to this music helpful while writing TMD????!
The song is an absolute banger. It appears on the soundtrack for the movie “Snatch”. An excellent movie with a flawless music score.
Thanks
I watched “Snatch”. No memories of this in the sound track, but maybe the hogs took over that part of my brain.
“Do you know what nemesis means?”
Thanks for reference.
Skip in about 2:30 if you don’t want the dramatic buildup! (I didn’t skip.)
https://youtu.be/CudqO5JEgFk
Everyone. I trust everyone on the Internet, and elsewhere, for that matter. Nobody wishes me harm and they all tell the truth all the time.
Oh boy, you’re gonna love my Polymarket bet then! It’s like free money! Check it out on my blog!
/s because satire is dead
Your link is broken. 🙁
Depends on the info. If it’s just some high-level, generic stuff then as long as it comes from something mainstream then I’ll go with it. If it’s something that’s heavy with math, science, or requires domain-specific knowledge then I treat everything as suspect.
I’ve nerd-sniped myself a number of times when seeing articles about the interpretation of some particular stat only to find out the underlying data doesn’t actually mean what the writer thinks or that they simply skipped over so many alternative explanations without providing details that the overall conclusion was flat-out invalid.
It really makes it hard to even have a newsfeed anymore. Most things that matter in the world are too complex for average journo to comprehend themselves or to evaluate/summarize their sources well enough to be useful in an article. I’ll just keep a wary eye out and keep doing my thing – worked pretty well so far.
As they said in the old country 150+ years ago:
“…How do you kill a fly or a bank? With a newspaper…”
As a career PR person, I feel for Lucid here. I’ve been through similar crises before (on much smaller levels) and getting broadsided by a reporter is a stressful fire drill.
Under a crazy time crunch, you have to fully audit every facet of the news in question, and if you know it’s wrong or false, gain consensus from a team of people (all of whom will have strong opinions), all of which need to past muster with legal and compliance before you share anything with the public.
In some ways it’s easier if it’s a larger, reputable news site since you can contact the reporter and have a dialogue on or off the record. We’re in an era of online media where stories can be corrected after publication, which is much nicer than the print era.
In a case like this, contact with the blogger can be disastrous and ill-advised since things could go sideways from a legal perspective, and if the call goes poorly, the blogger may double-down and use parts of it for a follow-up story.
If this blogger made false allegations, he could be on the hook for it and should answer for it – either way, he’s unlikely to recant the story at this point since that would be somewhat of an admission of falsehood. He is protected in that most laws allow him to keep his source confidential, which means it’ll be difficult to prove he willingly reported false information.
In the end, Lucid deserves some credit for the quick and definitive response, which likely wasn’t as easy as it appears. Watching the comments here, I’m seeing a lot of other doubts about the company come to light, so the renewed scrutiny may not do their stock prices any favors.
Just a nice reminder that PR folks are there to help guide people through these situations and not to “spin” things. At least that’s part of the code of ethics I adhere to. Anyway. Off the soapbox, back to making silly comments.
Code of what now? E-t-h-i-c-s? Those are all letters I recognize, but in that order they have no meaning. 😛
Just a nice reminder that PR folks are there to help guide people through these situations and not to “spin” things.
The advertising department OTOH…
Normally it’s buy on the rumor, sell on the news. In this case it was short on the rumor, cover on the news.
I trust Mercedes and Jason, maybe that Adrian character from England and the remaining staff mostly. I trust the Guardian news, and most of the dog related memes. That’s about it. I do not trust Volvo to bring us a replacement for the venerable 245 wagon. If I could afford the petrol, I would trust a decade old Land Rover to go 500,000 miles with diligent maintenance. I trust baguettes from France.
Wow, way to leave out the author of this article and David out