||In re Lucid Group, Inc. Sec. Litig.
||United States District Court for the Northern District of California
||Honorable James Donato
||Sjunde AP-Fonden (“AP7”)
||Lucid Group, Inc., Peter Rawlinson, and Sherry House
||November 15, 2021 to August 3, 2022, inclusive
Defendant Lucid designs, produces, and sells luxury EVs. This securities fraud class action arises out of Defendants’ misrepresentations and omissions regarding Lucid’s production of its only commercially-available electronic vehicle (“EV”), the Lucid Air, and the factors impacting that production.
To start the Class Period, on November 15, 2021, Defendants told investors that Lucid would produce 20,000 Lucid Airs in 2022. This was false, and Defendants knew it. According to numerous former Lucid employees, Defendants already knew then that Lucid would produce less than 10,000 units in 2022, and admitted this fact during internal meetings preceding the Class Period. They also knew why Lucid could not meet this production target—the Company was suffering from its own unique and severe problems that were stalling production of the Lucid Air, including internal logistics issues, design flaws, and the key drivers of parts shortages. These problems had not only prevented, but continued to prevent Lucid from ramping up production of the Lucid Air.
Despite the actual state of affairs at Lucid, on November 15, 2021, and at all times thereafter during the Class Period, Defendants concealed these severe, internal, Company-specific problems. At every turn, when asked about the pace of production, or to explain the factors causing Lucid’s production delays, Defendants blamed the Company’s woes on the purported impact of external, industrywide supply chain problems and repeatedly assured investors that the Company was “mitigating” that global impact. These misrepresentations left investors with a materially false and misleading impression about Lucid’s actual production and internal ability and readiness to mass produce its vehicles. Against that backdrop, Defendants then lied, time and again, about the number of vehicles Lucid would produce. Even when, in February 2022, Defendants announced a reduced production target of 12,000 to 14,000 units, they continued to point to purported industry-wide supply chain problems and once more assured the market that the Company was thriving in spite of such issues. When the truth regarding Lucid’s false claims about its production and the factors impacting that production finally emerged, Lucid’s stock price cratered, causing massive losses for investors.
On December 13, 2022, Plaintiffs filed a 138-page consolidated complaint on behalf of a putative class of investors alleging that Defendants Lucid, Rawlinson, and House violated 10(b) and 20(a) of the Securities Exchange Act. On February 23, 2023, Defendants filed a motion to dismiss. Briefing on that motion is set to close in June 2023.