Lucid stock investors on alert as 27,000 EVs recalled over fire risk

Lucid (NASDAQ: LCID) stock is in the spotlight on Friday, August 28, as the American carmaker is recalling 27,185 Air luxury sedans in the U.S. due to fire risk associated with an exterior lighting circuit. The overheated circuit may also cause the vehicle’s exterior lights to fail, potentially increasing the risk of a crash, according to a National Highway Traffic Safety Administration (NHTSA) assessment reported by Reuters.

Despite the severity of the issue, Lucid share prices appeared unaffected by the news at the time of writing, edging up roughly 1.8% in pre-market trading. However, given the stock’s volatility this week – it’s down 8% since Monday – investors are closely monitoring the charts.

To mitigate the damage, NHTSA advised sedan owners to park affected vehicles outdoors and away from any structures until the recall remedy is completed. At the same time, Lucid itself has issued an over-the-air software update to address the problem. As per the reports, the company has determined that 20,719 of the affected vehicles have already received the update.

What’s gotten investors on edge particularly is the fact that the recall is the largest one in Lucid’s history. For context, it involves 70% more vehicles than the car company delivered globally last year (15,841, to be precise). Lucid has issued several other recalls this year. In May, the automaker recalled 2,039 vehicles over a potential loss of drive power. In January, it recalled more than 10,000 vehicles because of issues affecting rearview-camera images.

Overall, the recall puts additional pressure on LCDI shares, which are already on a downward trend following largely negative second-quarter earnings and CEO Silvio Napoli’s announcement of an “operational reset” earlier this month, which involved 1,500 new layoffs.