In re Lucid Group, Inc. Securities Litigation

Background

Lead Plaintiff Sjunde AP-Fonden brought an amended consolidated class-action complaint against Lucid Group, Inc. and Chief Executive Officer Peter Rawlinson. The complaint alleges violations of Section 10(b) of the Securities Exchange Act of 1934 and Securities and Exchange Commission Rule 10b-5, along with a derivative control-person-liability claim against Rawlinson under Section 20(a). The allegations concern statements about Lucid’s 2022 production targets and whether supply-chain, logistics, pandemic, or other issues caused production delays.

Defendants moved to dismiss the amended complaint under Federal Rule of Civil Procedure 12(b)(6), which allows dismissal when a complaint does not adequately state a legally viable claim. They also asked the court to take judicial notice of eight documents, including Securities and Exchange Commission filings, earnings-call transcripts, press releases, and an earnings presentation.

Judicial Notice

The court granted the request for judicial notice. It did so only to recognize the representations defendants made to the market, and only where defendants specifically identified those representations in the documents. The court did not accept disputed contents of the documents as true.

Statements 1–4

The court denied the motion to dismiss as to Statements 1–4. The court had previously determined that these statements were sufficiently pleaded, and it rejected defendants’ request to reconsider those earlier determinations through the current motion.

Statements 5–16

The court granted the motion to dismiss as to Statements 5–16 without leave to amend. For the production-target statements, the court held that the amended complaint still did not allege specific facts showing that Rawlinson had contemporaneous knowledge that the targets were false when he made the statements. Allegations that logistics problems continued and that Rawlinson knew about at least some problems did not establish that he still believed the production targets were impossible at the relevant times.

The court reached the same conclusion for most statements about the causes of production delays. The amended complaint did not provide enough detail about what specific reports Rawlinson received, when he received them, or how he understood or reacted to them. As to Statement 8, concerning Lucid’s choice not to build faster in order to protect quality, the court found that the statement could be true because Lucid might have built faster by using damaged or noncompliant parts. The court therefore found Statements 5–16 inactionable because the complaint did not adequately plead falsity.

Because the falsity allegations were insufficient, the court did not decide whether the statements were protected by the Private Securities Litigation Reform Act’s safe-harbor provision, were opinions, or were nonactionable corporate praise.

Leave to Amend and Section 20(a)

The court denied further amendment as to Statements 5–16 because Lead Plaintiff had not cured the deficiencies identified in the court’s earlier order and had not identified additional facts that a second amended complaint would add to cure them. The claims concerning Statements 5–16 were therefore dismissed without leave to amend.

The Section 20(a) claim was dismissed without leave to amend to the same extent as the Section 10(b) claim—Statements 5–16. The Section 20(a) claim otherwise survived consistently with the viable portion of the Section 10(b) claim concerning Statements 1–4.

Disposition

The court denied defendants’ motion to dismiss in part as to Statements 1–4 and granted it in part as to Statements 5–16 without leave to amend. It also granted defendants’ request for judicial notice. The court set an initial case-management conference for July 16, 2025, and required the parties to file a case-management statement by noon on July 8, 2025.