Class Action Claims Lucid Investors Harmed Financially After Electric Vehicle Co. Slashed Production Outlook

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A proposed class action alleges Lucid Group investors were harmed financially when the luxury electric vehicle maker admitted it had missed delivery targets for 2021 and would be adjusting its production goals for 2022 and 2023.

The 13-page lawsuit in California says that although Lucid assured investors last year that it would produce 577 electric vehicles in 2021, 20,000 in 2022 and 49,000 in 2023, including 12,000 of the Project Gravity SUV, and that its production capacity was rapidly increasing, all this proved to be false once the calendar turned. 

On February 28, 2022, Lucid admitted that it had delivered only roughly 125 electric vehicles in 2021 and had only produced approximately 400 as of February 28, the lawsuit says. Moreover, Lucid, who currently sells the Lucid Air electric sedan, relayed that it would only produce between 12,000 and 14,000 electric vehicles in 2022 and would be delaying the launch of the Gravity SUV until 2024, according to the case. 

Per the lawsuit, Lucid CEO and CTO Peter Rawlinson, a defendant, attributed the lower production forecast to “extraordinary supply chain and logistics challenges.” The suit states, however, that Lucid had assured investors previously that supply chain issues, which had plagued other manufacturers, would not interfere with the company’s ability to hit its production targets. 

Upon the release of this news, the price of Lucid common stock fell $3.99 per share, or more than 13 percent, to close at $24.99 per share on March 1, 2022, the complaint states. 

The lawsuit alleges Lucid and its top officers, between November 15, 2021 and February 28, 2022, made “materially false and/or misleading statements,” and failed to disclose significant adverse facts about the automaker’s business and operations, in particular concerning the supply chain and logistics hurdles cited by Rawlinson. 

“As a result of Defendant’s wrongful acts and omissions, and the significant decline in the market value of the Company’s common stock, Plaintiff and other members of the Class have suffered significant damages,” the suit alleges.

The lawsuit claims Lucid and its officers have run afoul of the federal Securities Exchange Act of 1934.

The case looks to cover all persons and entities who bought or otherwise acquired Lucid common stock between November 15, 2021 and February 28, 2022. 

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