The Saudi-backed EV maker is reviewing strategic options, including going private or filing for Chapter 11 bankruptcy protection, according to the Electric-Vehicle blog.
Trading of LCID shares were halted multiple times between 1 pm and 2 pm ET.
Short interest in the stock is at 16.3% of free float, LSEG data showed.
Up to the last close, the stock had fallen about 48% so far this year.
Lucid denies bankruptcy and take-private report
The blog said restructuring adviser AlixPartners has urged the LCID board to conduct one more round of restructuring in the United States and Europe and narrow focus onto its Gravity SUV.
Lucid denied the report, calling it "completely false" and saying it is not considering going private or filing for Chapter 11 bankruptcy protection.
AlixPartners did not immediately respond to Reuters' requests for comment.
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