Lucid has forcefully denied speculation that it could file for bankruptcy, going so far as to send a cease-and-desist letter to the publication that claimed the automaker was weighing Chapter 11 protection or a take-private deal. The company’s response has been unusually aggressive for a matter it insists carries no substance, escalating from a public rebuttal to legal action and a regulatory filing in a matter of days.

Read: Lucid To Lay Off 18% Of Its US Workforce, Just Four Months After Cutting 12%

It all started earlier this week, when media outlet @EV_carba (Electric-Vehicles.com) reported that it had heard from unnamed sources that Lucid had been in talks with advisor AlixPartners, which reportedly urged it to restructure in the US and Europe and to prioritize the Gravity SUV. That could mean filing for bankruptcy protection or going private, prompted by the company’s struggling share price and pressure from Saudi Arabian investors.

The CEO Responds

Lucid quickly responded to the report. Writing on LinkedIn, chief executive Silvio Napoli labeled the reports “false,” although he did not deny that the EV maker is working with outside advisors to improve.

“Lucid is not considering bankruptcy or a transaction to take the company private,” he said. “Those reports are false. The Board did not explore either scenario. Period. As disclosed in our most recent quarterly filing, Lucid has sufficient liquidity to fund its operations well into next year.”

$LCID has delivered a cease-and-desist letter to @EV_carba regarding reporting that falsely claimed the company was considering bankruptcy or a take-private transaction. Those claims have been publicly and unequivocally denied, including in an SEC filing. pic.twitter.com/9P0PocFdCl

— Nick Twork (@ntwork) July 15, 2026

“We work with outside advisors to improve operational performance and execution. They are not advising Lucid on a take-private transaction or bankruptcy, and any suggestion that they have recommended either course of action to management or the Board is false.”

Screenshots have since emerged online showing the cease-and-desist letter that Lucid sent to electric-vehicles, the website that published the report. It said that “publication of inaccurate factual statements concerning a publicly traded company is extraordinarily serious,” noting it “undermines investor confidence, creates unnecessary uncertainty, and can materially distort the market’s assessment of the company.”

Shares Plummet, Then Rebound

Lucid also directly blamed the report for prompting a sell-off of its shares, noting prices fell from $5.51 to as low as $2.37, causing “serious injury to a number of investors.” The stock shed more than half its value at Tuesday’s intraday lows and was halted several times for volatility before the denial pared the damage, leaving it down about 16 percent at the close.

However, the recovery came fast. As The Motley Fool reported, shares rocketed 28.8 percent on Wednesday to close at $5.95, slightly above where they traded before the report broke, on volume of 55.6 million shares, roughly 169 percent above the three-month average. The rebound stretched into a second day, with the stock climbing another 12 percent on Thursday to trade around $6.69, back above its 50-day moving average for the first time since the rumors surfaced.

Regardless of where the truth lies, it’s obvious that things are not going that well for Lucid. In June, it said it was laying off 18 percent of its US employees, just four months after a separate round of layoffs cut its local workforce by 12 percent.

Lucid has been in the news for all the wrong reasons in recent weeks. Not only has it been forced to buy back an Air from popular YouTuber Jason Fenske due to a dizzying array of faults, but it was also recently forced to recall vehicles with half-shaft bolts that may not have been properly secured. It’s now been prompted to issue yet another recall, once again for the Air.

As with April’s recall, this one is also limited to the Air Pure RWD models. The electric car manufacturer says these vehicles have its Gen 4 inverters, which may experience signal interruptions and module failures due to damage from friction between internal connectors.

Read: Lucid’s Fix For Losing Drive Power Is A Notification That You’re About To Lose Drive Power

If the connectors sustain damage, it could cause a complete loss of power, as it’ll prevent the inverter from converting DC power into the AC power needed to operate the motor. This is obviously a safety issue, particularly if the failure occurs while driving.

A total of 2,039 vehicles are involved in this recall. All of them were manufactured between September 13, 2023, and December 12, 2024.

OTA Update Before Replacements

Lucid first noticed inverter failures in March 2025, in cars run by a US fleet operator. The early assumption was that fleet use explained it, since those vehicles pile on miles far quicker than privately owned ones. That theory did not hold. Failures soon turned up in non-fleet Air Pure RWD cars too, and by March 2026, the company had logged 55 of them.

Rather than immediately replacing all inverters, Lucid will roll out an over-the-air software update that detects potential failures and triggers a warning on the instrument cluster, which must be cleared by a dealer. Vehicles that receive this warning will be eligible for inverter replacement. Owners of vehicles who don’t receive this warning won’t be eligible for a replacement.

On paper, the Lucid Air is one of the most accomplished electric sedans on sale, a technological tour de force wrapped in clean bodywork with class-leading efficiency. For one prominent YouTuber, the past eleven months of actually living with one have been a study in attrition.

Jason Fenske of Engineering Explained signed a three-year lease on a 2025 Lucid Air Touring last year. The problems started almost immediately. Door handles, phone-as-key functionality, the cupholder, the list grew quickly. Lucid reached out and promised to sort it.

Watch: Popular YouTuber Got Critical With Lucid, And Things Didn’t End With A Shrug

Fast forward a few months, and the YouTuber has reached his breaking point. During a recent four-day road trip, the Air kept suffering problems. For example, there was a time when the rear doors couldn’t be opened, even though they were unlocked. The HVAC system threw its own curveball.

As his dog sat in the rear, he noticed it was getting too hot. He checked the air vents and realized that while both were set to 65°F, one side was blowing much hotter than the other. He also experienced an issue where the reversing lines on the screen with the reversing camera would randomly disappear, and, most annoyingly, a number of Apple CarPlay issues, including it completely failing to load.

Then There’s A Big Safety Issue

His biggest issue is particularly concerning. Fenske also drives his Lucid Air with the vehicle’s Stop Mode set to hold. This essentially means that when it comes to a stop, it will automatically hold without applying the brake. It can also be set to roll, as a traditional automatic car would if you let off the brake while stopped. One time, when the YouTuber turned on the EV, put it into reverse, and lifted off the brake pedal, the car randomly started rolling forward. If this had happened on a steep hill, it could have caused an accident.

After contacting Lucid, the company first suggested it could take back Fenske’s Air and replace it with a like-for-like example, allowing him to continue his lease. That plan fell apart when Lucid couldn’t source a matching Air, so the automaker instead agreed to buy back the EV outright and reimburse him for every payment he’s made. It works out well for Fenske, though owners dealing with the same issue, minus the 4.2 million YouTube subscribers, probably shouldn’t expect identical treatment.