Upstart electric vehicle maker Lucid Motors disclosed Monday it has received a subpoena from the SEC, sending its shares plunging 10% in early trading.
The company said the probe “appears to concern” the SPAC deal that took it public earlier this year, along with “certain projections and statements.”
Lucid (LCID) raised $4 billion through its combination with Churchill Capital Corp., which was a shell company set up to take a company public without having to go through the typical initial public offering process. The deal was announced in February and shares started trading on Nasdaq in July.
Lucid, founded and headed by former Tesla engineer Peter Rawlinson, has been a relatively hot EV company, even though it just started its first delivery of electric vehicles at the end of October. Its Lucid Air Dream edition has been certified by the EPA as being able to go 520 miles on a single charge, the longest range of any pure battery EV yet, including any Tesla. And the Lucid Air was named the MotorTrend Car of the Year in October.
Shares of Lucid had nearly doubled since they started trading on the Nasdaq.
Lucid is the latest in a growing group of upstart EVs with big questions about financial projections.
Shares of Nikola, which plans to make electric and fuel-cell powered trucks, plunged in September 2020 after Hindenburg Research, a short-seller, accused the company of an “intricate fraud.” Hindenburg claimed Nikola’s products were much farther from reaching the market than they advertised. Its founder, Trevor Milton, was forced to resign and in February the company’s own internal investigation found he misled investors. Milton now faces federal criminal charges, as well as charges from the SEC that he deceived investors.
Another electric truck start-up, Lordstown Motors, was also hit by a report from Hindenburg which raised questions about the orders for its trucks. Its CEO and CFO also were forced to resign.
Both companies also went public through use of a SPAC, and both traded at lofty prices before questions were raised about their claims of future plans and sales. Neither company’s shares recovered. Both are down nearly 90% from their record highs.