Lucid (LCID) 6 May 242024 Q1 Earnings call transcript

Ladies and gentlemen, thank you for standing by. And welcome to the Lucid Group First Quarter 2024 Earnings Conference Call. Please be advised that today's conference is being recorded. [Operator Instructions]. I would now like to hand the conference over to your speaker for today, Maynard Um, Senior Director of Investor Relations. ahead. go Please

welcome Call. and Group's Quarter First Thank to Earnings XXXX you, Lucid

Joining CEO Officer. Rawlinson, Gagan Peter me are today our Interim and Dhingra, CFO and Principal Accounting our and CTO;

let trends, production Before call performance of the company of statements include, and These federal this handing on future without and of results under outlook you include and actual a industry risks uncertainties. to statements future on laws. over macroeconomic financial number Peter, financial events the due and guidance, forward-looking the events. and call initiatives and statements delivery securities predictions operating other that volumes, and me to today or based are limitation, differ some of company, expectations remind may as the These regarding and statements

refer the We at Investor and X in on deck the our the risk ir.lucidmotors.com. forward-looking available recent and of statements factors language SEC our filings website on section Page of with investor the to most cautionary our Relations you the

available GAAP press In as non-GAAP reference afternoon in information financial call. this regarding during deck. measures why to of well non-GAAP discussion make release of reconciliation issued our addition, earlier measures A we is and earnings non-GAAP results use management in as will our financial versus this our investor

to and CTO, CEO call Peter Lucid's I'd please that, over turn Peter, go to With ahead. the like Rawlinson.

and figures, on my our for everyone, PIF, our advantage us prepared and at discuss you, our I'll call. production quarter today, partners thank and better-than-expected cost joining our Maynard, you, delivery remarks XXXX first momentum. Thank earnings In overall our the

ever more our me about makes which future. been of than optimistic I've All

set are factors that Lucid I believe X key Now apart. there really

the technology in-house partnership our steadfast been superior Our investors and partners. PIF who with have and

affiliate capital $X in the stock convertible of preferred a raised to we QX, In placement of private an PIF. through billion

for very XXXX confidence the Saudi a strategic plan to its steadfast achieve support. I'm country's are goals. and We their the grateful Vision PIF partner in continued

Airs, and our In to production deliveries. turning above X,XXX. Now delivered and we produced Lucid Both X,XXX slightly QX, we expectations.

best it In our up was XX.X% fact, for quarter-to-date year-over-year. deliveries,

deliveries an cost conscious not production be Our bottlenecks. and active is decision production of reflection lower than a is to

to For our is quarter. produce which consistent expect X,XXX with we guidance approximately vehicles, last XXXX,

provide despite an Let with fourth our me on awareness and Lucid on quarter. in now brand made I today. reducing you solid from where spend We've general believe update media the raising first brand both quarter With the pricing. awareness stands progress

value. nearly is Our that Lucid customers in a aspect vehicle Air increasingly superior every recognized as

luxury car was consecutive For Lucid Air and best hybrid electric XXXX the third the awards. U.S. and named World year, electric on best car Report by its

car range key in is running and Air sets win Lucid equivalents. gas engaging It's fastest to It production parity total the due efficiency. biased row, only drive performance another with lower X It's the charging market. Lucid that concerns. remarkable award enjoys longest Air a a and it apart. solves to this its U.S. car price to with costs in category has the EV years us achievement

the of its vehicle recognize results hour. per the and is produce automakers EVs market. bigger and charge lucid limited in cost miles in To the efficient kilowatt as air particularly they most install batteries. deficiency and charge most in savvy, of to Which other versus must range class ] air. are eSpheres consumers Now Lucid the higher in anxiety, Remember, longer range times [ measured other of relative vehicle EVs. the

charging having and speed range total to for and industry a the charge. lower cost leading While

vehicles Inside, equipment our about our the line the the and of of seen and lack make of business. item intentions. scale our costs cost about speculations I've high our is a commentary the per losses factories reflect extensively but goods cost knowledge scale such and vehicle, needed of to

long-range If we we factory. we built only have [ purchased small equipment goal and have make to we the we're model expansion But obvious. smaller phase, a our embarking vehicles, in for lineup. a as consumers. company the a the on scale, affordable, of envisage would less mass our become should And ] market leverage a would EVs number provide more ambitious transformational And mainstream vehicle of

Lucid this already SUV production price And is year. a with for is scheduled $XX,XXX. Air Pure start late starting here program gravity of from the

could And third-party every X/X in and we X consider an would SUV SUV's already palpable. intenders, purchase is XX% would the emphasizing SUVs, larger is than Our purchasing And the EVs market consider total more Lucid. XXXX. purchase survey, excitement SUV than In tenders electric to Lucid. Lucid. addressable Xx of access worth gas Amongst a market is in SUV X all people knows intending this consider would and EV

is this alone the brand, reflects this and ahead. figure significant Now new one, a for any staggering let a opportunity

body in shop We've our white paint into AMP-X, SUV program, We learnings our them our Powertrain gravity program. vertical the incorporated all virtual from cost are invest strategy. further continuing part expansion our quality of to for stamping, and future in applied at an integration, important SUV and of with and longer-term Air

So I'm confident segment Gravity that efficiency, with charging speed interior the and will volume. range, world-class redefine

and late later production following see To machines. SUV analysts factory Arizona. the facility host addressable AMP-X another midsized incredible manned total drive. And build start vehicle, this in Later XXXX. the which this you the year, expansion program, with in scheduled by test road at institutional to market machines we on our We'll is for Gravity change of the step in year employees we our you have plan and show that state-of-the-art investors to also our our vehicles for

I for of game a key EV. an am when And wait this we to cost again, is can't efficiency class for can't battery show enough given midsized confident smaller a you changer. key is any to vehicle. range. can midsized element efficiency battery to comes crucial unrivaled that I And achieve smaller levels I a to it stress making lower the our

about business. like technology I'd to our Next, talk

deal of unit drive in Martin watch more we across software. generate interest to additionally, electric world our space the other monetization a from to continues plus leading prospective front Please Aston And including to partners. technology, opportunities aspects the all this our technology racing sole continue of as series. we are our Our discuss supplier

I'll I offer uptick critical we're additional And QX pleased details XX.X% caveats. surpassed am our word-of-mouth close the takes and on awareness. road about into with momentum. with sales nicely Which We the the QX. boosting the always seeing in April. in I in with year-over-year in here XX,XXX past momentum vehicles us threshold

seasonal and consumers go as typical vacation. in the typical we slowing first We QX of Saudi Despite slowing in seasonal globally feel in expect Arabia for escape I the on on this, cusp velocity. we're QX expect time,

advantage, to best a compounding partners, than I've been become unprecedented and $X interest world's from momentum, future. believe more never We is consumers in the confident total billion on I corporate which have sales SUV. Gravity, track liquidity, efficiency more and our Therefore, in

in a joined pursue Mike for call Bell, Lucid head, I So from before moment management other who Gagan, thank a taking instrumental recently over the opportunities. take to organization. unparalleled building as of announced Mike digital's will our like like truly Mike to over software turning change. organization interim acknowledge would and now to was will Carty to lead [ contributions. his in all Derek leaving I'd ] XXXX early be to

will time confidence an I organization. the we have capacity, the be transformational in staying company. our next and enter period Mike in And of Derek a advisory digital for as and on of into full phase

all our all a our end and your you of to thank suppliers, with I'll for of to dedication our and employees big work. you So your listed share most [ hard ] shareholders. And all, thank commitment, partners

to that, it with Gagan? an our to So to provide on financials. Dhingra update I'd like over turn Gagan

Peter. you, And are thank taking us to time those the join who Thank you to today.

continually like entire by to remarks, get I and Lucid I thankful perseverance. also dedication everyone's start the by and would prepared I am team. Before for to my amazed thanking

Turning to our first results. XXXX financial quarter

we and During delivered sequentially. up year. X,XXX first QX, approximately we vehicles produce XX% in up vehicles produced nearly vehicles, to our the guidance and reiterate year-over-year XX% this quarter, We X,XXX X,XXX

Arabia, of go-to-market QX, we In were in ramp able the to challenges we resolved and we up QX. in Saudi some logistical had deliveries

think with on awareness the and American vehicles number we affordability. improving pleased from and also of benefiting road growing [indiscernible] increasing brand are volumes, which We is

by encouraged are we seeing. are what We

Turning to the P&L.

higher For the adjustments, pricing QX, Revenue Average selling X.X% to by were sequentially, deliveries. prices the of was mix down sequentially due $XXX.X a primarily driven million, part quarter. as up well which as affected

was QX. amount selling million, in Cost $XXX.X including [ to in price, our on from was basis QX QX or bill reduction The of improved LCNRV optimization logistics [ average LCNRV impairment costs to initiatives, margin gross and a ]. due million and of material lower cost production lower both XX.X% despite ] in quarter-over-quarter charges related revenue $XXX.X approximately

our result, part specific revenue. of a Fixed deliveries margin. per that and gross costs of can depreciation guidance. don't provide related as we we improve. production up And and as factories There we affect significantly and ramp vehicle equipment to are overhead remains expect the the controllable many to uncontrollable of gross variables the cost large typically And a margin

in your color wanted I to modeling. some to However, provide directional aid

we in the of further is QX due quarter instead optimization to full to QX. quarter our half improvement initiatives. to quarter gross adjustment XXXX, This forward flat price impact anticipate despite second of margin in Looking mainly remain cost

inventory the margin. standpoint. remarks in of into impairments resulting further is prepared move expected for an gross affect the year, back depreciation of higher in in increase I build addition components we quarter from to as the activation, II gravity to adversely this well. [ expect an program mentioned to accounting we Phase my This, last in to As LCNRV ] SUV half due

implementation in for to and areas and we'll We of focus on have sold additional identified opportunities continue further goods cost out. cost

margin. our term, I with see will margins a driver key gross gross the our enabler. technology believe efficiency, of strong scale, With be will you Longer key

$XXX.X up Now in expense QX XX.X% expenses. R&D moving sequentially. to totaled approximately million, operating

ramp to the expect we up R&D We further vehicle as new increase programs.

think that world. technology I has accepted widely the EV best the Lucid in it's

lower million, The spend professional was seasonality cost to and due due SG&A XX.X% continued down initiatives. lower expense decrease to in and from QX. expenses and marketing approximately due sequential primarily other services was QX $XXX.X general to sales optimization

Although we increase due strategic to primarily we to execute year, expect to have investments this continued cost growth initiatives. SG&A identified additional opportunities in reduction

and temporary centers, XX our in with satellite We service QX. first service XX and ended studio from quarter up centers, excluding the

On nationwide body locations mobile fleet shops. strategically to effectively will the to QX Lucid side, cost center XX plan which service satellite provide additional and studio customers. footprint our with well centers, continue brands as in expand We and the service service for we ended approved XX as

The to In be key a scale. will we and pathway XXXX, operating volumes see leverage. driving

attributable of primarily was of to a the down other million in was strategic our million. $XX.X change equity compensation from loss of EBITDA the securities fair QX. of QX. received technology Aston $XXX.X quarter decrease in $XX.X an slight achieved In Total QX income million to as from related stock-based in we was loss in Martin million noncash management. our value we adjusted which Our improvement $XX.X in The $XXX.X $XX.X QX, a million, million of part shares, a

we mission. the to PIF. I Moving preference placement to In Lucid and sheet. thank to for their convertible balance a and an commitment $X and QX, stock would their through like our private Peter of of raised to echo the the PIF partnership billion affiliate

excludes $X.XX and We support cash approximately Aston of in the quarter with investments, $X.X market billion. equivalents of [ industry. as and Note, Martin March with others the in the ] approximately liquidity cash, billion partnership total XX. shares in value this us $XX.X of million PIF's from the separates ended

over we been years, sheet the balance consistently We a And be able sustain for exploring last will time. we strong opportunistic have done in financing. several have continue as to to

million Capital inventory. decreased material to optimize raw a XX. consistent last raw and inventory. we was with lower is million, QX. pathway drawdown primarily on in down where quarter, reduction to Total to what to existing in significant expenditures sequentially, $XXX.X purchases hand. QX due continue in from This Turning inventory we material as further I $XXX.X see outlined X% a our

outlook XXXX. in X,XXX to production delivery vehicles for needs. Moving and to manage and we our XXXX, approximately our meet production continue to sales prudently adjust We the of forecast will and

pleased Saudi quarter. towards second seasonality are see the we we the you remind of seeing, in but end I we would are mentioned, typically Peter that As demand Arabia some with the also

With regard the approximately liquidity to position, we ended quarter of total billion. with liquidity $X.XX our

the through and of runway a us give into program will this expect second production We the SUV of of the quarter XXXX. start Gravity

Moving to CapEx.

our for $X.X for to be unit, approximately year. capital This billion. expect of deferrals outlay We The the focus growth AMP-X will on the continue expansion reflects and completion certain future Phase SUV our from late start-up initiatives XXXX. II AMP-X the and and program. in our powertrain perspective, completely in capital we XXXX pin-sharp to expenditures built-up for for last product program in of From the white on-premise stamping a production late for are XXXX body for start-up SUV of production expansion in high-volume platform scheduled scheduled we Gravity midsized gravity

Our performance Gravity and our quarter provides and addressable continues many momentum, upcoming our about good optimization SUV to positive very total opportunities, see this the the pure feel midsize I ahead. opportunities the of strategies expansion further demonstrate market, programs and cost

turn back to get to your it me Menard let to that, With questions.

We'll the Gagan. of start now the call. Thanks, Q&A portion

the our sent from phone, questions retail those the Say investors technology questions [ platform. take want that we on into Before some I post to ]

What the elaborate Lucid's Can facing positive reducing in gross milestones Anav. from production key pathway costs anticipates profitability? are margins? company the to is question and first you achieving Our challenges and on

Thank we each more the of scale. spread fixed facility, we The you, can factory scale, our across incredible that's long-term our car. our the more the sale more cost, the cost can and make, of investment, about investments It's we all Anav. volume cars the

up need we relative sales Air growth trending last how Lucid to of XX% that? right now. year. now, right year do do So this And to from We QX continue we're

will the is into the in upon $XX,XXX, like that 'XX. startup to production about a next effect scale then very a Model into Porsche considerably. gravity year. for down scale. beyond believe, size late the that, that is gravity Tesla see production key on production this Now and And we vehicle price our about And vehicle, get is market It's for very, around, a scheduled production multiplier similar We're thing late for we get of have period, get on sales need Tycan. a and path we midsized that to outselling competitors volume schedule S at

just exactly that truly Arizona major we're for units there. And our we're the [ Maynard We're I've our huge Martin, We've current for got the Things ] much Aston that made one ready. feet right roof. Lucid's future. stamping line, got body all the and and are roof, like And I robots Gravity. a X are our square how in pages. General we're finances in of structure social putting to to supply building investments in you to logistics, going facility tell that Assembly one by invested is there integrating first under nearly dominated the now videos think bringing that's under in the some its a powertrain where we've factory, million expansion photographs on make media presentation, we the for

means ] is with that efficiency. real big And say cars over smaller don't is then batteries The thing else the make advantage That than part more Lucid's most we leads an the therefore, role which to that EV, that costly other with with cars profit will [ anyone I to I And of make an Gagan. effectively the say be a else. businessman. more battery as we got anyone than efficiency and batteries can engineer, able else, because your everyone margin means the cost as less is perfectly

fixed the the work cost is you, labor goods number optimal significantly we'll volume Peter. Thank scale capacity. more when part Number a overhead Number factory, you leverage. made at three, and provides the optimize which of to initiatives. efficient significant we including cost our depreciation as bring down, a big of and sold. continuous also investment BOM and cost vehicle, the get you two, able cost one, two more scale, the Yes. be of things With cost in And per

very to Now support have this initiatives let big me we leading optimization add been cost daily on that a and the working aggressively, from with personally I'm Peter. basis

the that logistics in the quarter. said is also significantly prepared of this the able reduce cost I to and were go which As parts we the into remarks, bill of materials, the costs car

additional throughout to have identified also year. execute We the opportunities

employing Our the low. What bring up seems from keeps you is dropping. The product to output be considerably? measures question price stock platform will Jason. next the extremely is price It

Thanks, Jason.

again our all volume. share look, again, price, -- it's about Now

profitability up. we're forgive -- and market, Gravity Against down. scale. on where of getting And the coming. the trend. me, year-on-year. deliveries recognition part makers . So really a because price other are XX% EV bucking about we've that products and are believe share the got the all I broader there. interwoven. We're It's about brand, We're It's on

the Lucid consecutive for Just the put in third consecutive We've outsold Mercedes Benz the first well consecutive We've sold EQS GT quarter. to the for new Porsche outsold ] Benz [ quarter. ever, iX, this Tycan. QX, the the EQE as Itron Audi quarter. outsold third in fifth we've perspective, the for BMW and We've time Mercedes outsold

also want explain to I another here. matter

not it. can We about follow. manufacturing about It's cells awesome will trajectory ] situation. ramp-up constrained. on. the these and product We situation of all it's sales how the are It's awareness growing much just an This that's isn't economy very volumes. is [ and a link And we're the from

And stock for to point, I put to final in as I also like this a want year. put -- context Lucid's price just would

Just We're XX%. is down down XX.X%. for about is about XX%. Tesla down Rivian context,

a color? path is a want this really, to of to sector. it. add But do we've trend there So in get here clearly, some got you Gagan, out

optimization Yes. again, focused are Peter. Thank cost. we And of very also execution and you, on

not about it's about our about It's I the profitability. over it show but most will sustainability the and story. as have the expect margins in it's We we it's just scale, vehicle, efficient growth, scale. time about

the Justin. production? provide Is any battery or to Lucid in legacy from of is for automakers question The third motors with talks

less central And have the that planet leadership the to question. for be emphasize vision we share step, to we and that first technology, hypercar Martin. vision absolutely the to truly a technology enough. And provide travel This sapphire companies. taken technology further to a meaningful our call Aston other the the no to upon use we're technology providing that we've there's the and automaker. that's And it performance company, mean a with can environment in whole The lineup sustainable to technological suited Thanks got the can't leadership. current scale then of Lucid grand the Group. that upon from time Justin. car why to is impact this, another our and technology I is and luxury take I ideally that Thanks, of less with touring, associated touring, we've to than

But is what this that me that This the for going I building tech we're speak future. suit in really the family potential really technology developing create where is of the going tech high-volume listed effect. right here excites is that's midsized headquarters car And for the a our currently in multiplier the to to platform. what's

we really are specifics. together appreciate, certainly There of So about interested in talk with our appreciate indeed, can't and large OEMs working as tech, we are they can you are us. talks. that in value But the

add like you would Gagan, anything to that? to

right course, the Yes. of economics. under And

[ opposite. in so our lies And expensive. completeness ]another I there this Absolutely. the think current is tech of completely that misunderstanding it's finances information And because our

for designed tech biggest battery, scale. for item Our making affordability made the is is around which It's of cost the EV. at an need reducing

simply appreciated sufficiently So an understood. making to Lucid's significantly reducing is technology the of this just actually a And or adopting EV. cost not is route

car make Great. And to compete Tesla? affordable with an from is Will Lucid our Robert. last question

the promised Pure already 'XX. planet, the I've Lucid really on got price to an wheel I Tesla. late $XX,XXX going when we'll our drive, one, the with Air That's that be We exciting. that's already September Well, wait The $XX,XXX, finest a until comes we're one out big machine to back have are. competing XXXX, But and is answer $XX,XXX. in that. The car, midsize rear

Great.

the Now we'd questions phone the can from take like to please? we take question, lines. Twanda, first

line questions Jonas. from first Adam Our the of

Or you kind the that and supports quantify sales that about of momentum what you quarter period the remarks in year-on-year? published more talking Over Were statements that and was Peter, it you Can talking you what is during said were in building? statement? measured? building sequentially? prepared momentum your you

Okay. Yes. Adam.

look you the So at QX to were And we 'XX, 'XX if we had close that's XX% versus if memory. I to XXXX XX.X%, very, believe compare where on we or 'XX, XX% by close very to up QX growth. XX%

the of nicely. we're So market bucking the quite trend

specifically. And the And for cost. A on within Can focus cost. a this to big some you BOM give And quarter? BOM you gravity? of cost improvement in the this mentioned the you who are your as Okay. relentless that improvements on said quarter just follow-up, some costs remains for examples benchmarking you attention BOM

Thank you for your question.

components, there and our various So actions, And the the are quarter, and hard side initiatives, is this are bringing are pricing yes, things in we margin more within due battery BOM internally to cost cost we mainly of the side optimization and gross BOM working internally technology despite it, on and improved the of supplier including reduction. cost, both with where cost down.

Our range. the car per is lowest vehicle

are also bringing also able of that it, And identified we year. have logistics then initiatives side we want managing cost down our that significantly cost few addition, quarter-over-quarter. execute the a But our effectively, the we throughout other down. We're helps to very bring inventory the to in on

take We'll Twanda. question, our next Great.

of of line the from comes question next America. John Bank Murphy with Our

will be the it the explicit kind mean as an look velocity and I of [ at Tesla escape I the but at many and mean for in to potentially they necessarily we're of late that SNX, to company similar sort seems don't mean, X-in until escape conflate does necessary you when launch I like of comparison, that direct of or somewhat sort the where reach make to vehicle a the was why. seem like velocity Peter, with on there reasons. And -- company here, the wasn't parallel it ] launching self-funding. was X it the space 'XX smaller don't struggling the we But hit looking

concur you maybe I I wondering some a to that that, to some So right? degree. if take degree, fence of with don't kind hope but would was you to

we sort also, question launch will drab, the then it's say I able And of escape to as dribs investors, wouldn't a get and the that, $X money. But a to and that drabs lot is of and from in we're about seeing of it's sort think drib sort these of space of get velocity to maybe XXXX. this guaranteed funding be the you billion or

So I one, do kind of logic, with of escape mean, that's you there? velocity? to you that And agree have get funding reach you the sort will when

and very vision An -- thoughtful I mean, volume. very interesting the parallel a question in from steps. X significant you as get clearly, look, X comes well, to And to that always steps is there's

it's bit will that capture to for say and it's less full unique all, until X Model Model X-row because it's and and secret is midsized start of step this Gravity. which a the to won't production proper true bit got products. with all of get into the of platform bear we with weapon critical cost 'XX. Gravity unfold awareness that believe we you'll late like, CV degree And like for see very that production scheduled we've enable. a X a further a of But there's to Xx TAM was we get fruition can go [indiscernible] didn't as we whereas these battery making scale, the First Gravity which a car address of SUV, that Gravity With scale and And X-seat significant a about big with Air brand really opportunity I going

They PIF things: sets us apart combination technology, partnership, a is lucid makes what this Now Right with Saudi the elusive our our combined literally really regarding foundations, of They unique the and Right for to had operating their advent the arrival is ever with business with together. Saudi our our scheduled their special audacious nearly success. are the concrete relationship a world-class Arabia success. first laying relationship now, -- with because the CBU there the the it's the of and Arabia PIF our car in XXXX. Vision complete equally to they running are economy now, sync midsize financial transcends which are plant. unit, incentivized invested transitioning the is of are plant they've cornerstone a Arabia. incentivized factory, for they we're with the pouring in one we model of us in in a of sustainability Saudi X And are

We incentivized than are acceptable success is mutually less nothing here. for success,

follow-up. year. That's one this Airs XXXX produced produced or Okay. very second vehicles just helpful.

more already You than you produced. delivered

well units to higher? or think I X,XXX production it Could Or over deliveries Should above than go I X,XXX in the that you think I expect similar there actually there's is we production over the significantly could of XXX. X,XXX we greater units year? something are think quarter. this inventory. Delivery see did number? be that through rest

deliveries see get prudent Well, working that have management. inventory amount on our capital what And to actually taking that. don't we so an management is prudent with we steps up. of is here in balancing love is This and I'd haven't production guided key that it. crucial is the undue tied from message is that

next we'll question Twanda, please. take our Thanks

Itay Michaeli question comes next with of Our from the City. line

Just me. X questions for

just for the you're Gravity an making there? launch? progress can just Peter, supplier update of how give And readiness feeling the would What over that? about kind First, on you us you're

labor what margin. a warranty, kind of that maybe hoping and at question, trends then was overhead in second lot the kind to just back going And you're I bit little margins, talk there's excluding I costs. to freight looking across you they're of could number. material, variable gross kind seeing parts, of of and a know a just noise for

can that's give of bit a If sense you how trending? us of helpful, too. little That be would

product, build-out all towards all was supply the morning, to this the And with to you the status. that of X in absolutely, room, a overseeing covered personally the the we of production. Arizona of the the -- gravity of the readiness base. so order of every and thing literally the Gravity the your and And installation the Yes, readiness in of And the ready over Itay. factory question of program, readiness in we're the streams, factory, morning Thanks, this. equipment. we need march start And starts I'm activity my sync review the third

parts. is literally best we're the with And of some a that hundred few something We have the of thousands upon managing world. suppliers suppliers right Truly closely. around drawn very

And aim, transparent. super want to be really to that process I this

to advantage series videos, the for the tell and to I last just with supply time chain product, a pandemic. that So trace personally of team the a We the it connecting the to everybody we're will road readiness. going pillars, week, company, do of tale this the to Gravity, to readiness and that's factory But out series. product, who's coming path trying Itay, following a Gravity, this not commissioned those the which launched the make got major because X we've

be visiting to lot opportunity verifying we SQA, there us for a So the quality production supplier year. and validating which starter should and is audit. have and and do our late And quality this those teams awareness engineering readiness for checking supplier more suppliers

Now I would the question regarding margins, like defer Gagan, to to please.

Thanks, Yes. Peter.

both is have business. taking things cost supplier very gross side with looking at and first, a significant the on Itay, So margin, effort. cost we out And the been bond of working then the hard of the

X that. how look you to technology. our And I And the in will about from good its also it out Slide ownership. quarter investor this of car dollars of lowest want be explaining thousand the has bringing for lowest cost. cost. our call look at But added specifically, car continuously has at the we are thing X, deck, cost you one Slide We and if to

to we're personally challenging every with cost our able parallel, logistic that does optimization But in support initiative each this bring Peter. leading dollar and -- for mean what and then team, the And every down. and is team to value, us, significantly I'm cost from also one this the

more and We opportunities. are more looking

scale matter Now money cost. amount we a fixed of spending on are because of it's today the significant

Even that go late part But are they deliver. give and to capacity, we to they on the identify from overhead fixed it variable perspective, it us help volume cost, opportunities, operating And at coming and there. close more to the supplier a have because also look their close leverage. we and allocate we will also, XXXX, getting our will us an Gravity with

can next our Thanks we move Twanda, question? to

question Fitzgerald. Shepherd the next comes with Our Cantor of from line Andrew

on onwards. this year, just it's maybe to -- year quantify how Trying later it wanted little I develop Peter, and a as will get a bit Saudi Arabia. to maybe to if I that sense to to next agreement deliveries up follow was possible

think wrong, I correct you the if lot a midsized to include mentioned Gravity models, please deliveries high-volume these and that the past, had I'm me SOPs. would and -- in have reach the their yet which that but of

your way to quantify wondering, So the to you Gravity next what this deliveries Saudi Arabia year we are will these be up work to just and... able year, as

not SUV, market. But guide guide a where interesting on we would quite an in again, decided that's on products but particularly not We're our in on the that in our for be position units. specific Saudi, to Yes. got equal very these. to we've XXX the split future, in deliveries And split, going confident I'm guide to demand either that exceeded planning the QX right now yet I'm haven't to Andrew.

Arabia Okay. Got QX Saudi in the it. particularly XXX so deliveries helpful. were . That's That's [ ]. over quarter helpful. to in But

liquidity. just And Okay. on question then a

the recent quarter Obviously, billion updated is fund next liquidity the hand to presentation, In sufficient touched on of liquidity. $X raise fortifies the that sheet. is until believe, capital second on mentioned the balance business, your I You year. you

do billion with asking is external be you raise or that from them may I'm the is, the far the situation of foresee guess you be the thinking I the capital for next or to funding also So that PIF where next from you a extent perhaps question you year-to-date, would raise, you're ability do do answer, elsewhere? -- my with can what that so capital? guess coming as in foresee from PIF your I $X.X

capital-intensive we're on Well, a company. a it's growth and a trajectory We We're look, that. endeavor. technology know

And of I raising capital so that all take we can an is requires opportunistic view it. the when say business entrepreneurial will

gravity a I year. strong production in takes position a next the that's position. and very supporting a very, well the It us and very investment that It in financially. single steadfast round I position. And date. And and us into aware and relationship has puts very are us us We shown think of gone start of special puts the to of think very support public every an strong past that appreciative us fund enviable

Thanks Twanda, to question can we the please? move next

Tobias line with the of Beith comes Our next Atlantic. question from Weber

production expectation become build AMP-X. near X for is II as Through the subscale? that the of whether I'll the while have questions integrated them separately. I expansion to Gagan, Phase continue will are this volumes in ask vertically please, processes XXXX, you confirm term more and you out Can increase will losses

Yes.

certain remarks, typically don't noncountable controllable prepared margin because factors. and of So said guide the as I gross we in

purchase quarter of of can flat directional a I impact ahead will some II -- that to margin and inventory, increase we In of gross to then provide QX, of I on second we for impact result part production, result year. . Scaling some the will QX of year, which quarter. margin. expect took i.e., QX. we scheduled this Phase impact despite also full the depreciation the in the production now activation, for actions gravity in But as impact In result components negative LCNRV However, back pricing have the in gross remain Gravity late half expect us of in higher color. that have

As we significantly. move things we next expect to change to year,

in the sorry, -- basis, do On margin a On to my variable variable But the and vertical to you both ask just Gravity? higher near decrease differently. expect slightly margins integration Air the term? question Okay.

a great Yes, that's question.

trim. Now it contribution getting margin, is trim better of We're a on game by scale.

get It's And margins more of also because gets contribution their when BOM the volume they a margin improves overheads, cost low The impacted with our better. part our capacity, we it the scale. of matter you certain deliver. have scale, suppliers on a cost, significantly freight much get to based volume. Now close and significantly amortize fixed

underlying XX% turn the within the you delivery was that And sequentially. and impairment assumption from back the volume just in Then asked. X% And delivered simplistic given unit last wondering benefiting comment of on if Understood. the Okay. all was presumably Itay these I that sold overproduction. happened? year's COGS. If actually what cars then could exclude first D&A a goods to this that ] increased per your costs quarter [ year, higher with I of question some Adam make charges and of cost to from charge

factor is a of as incentive well. Yes. It

So in actions if some took current pricing at you look -- we the quarter.

pricing the reduction the by it's So actions, cost activities. of were largely which because offset

Okay. But not your -- actions, the in the they're surely, charge. pricing COGS sorry, anymore excluded because impairment I've

multiple things in Yes. that it's that But factor. go

say that together plus role we play pricing . and a when that basically pricing for like actions, So and the in mix, curing we offered component. both significant pure that we

Twanda, next can to we question move Thanks please? our

Our line question Fox next Steven of comes from Fox Advisors. the with

I Any been number only you've just you in had guess deals. have helpful. seems whether increasing your -- can proven it was it from progress and the advantages standpoint software. I over [ color wondering last costs say on a provide third-party down, a question there as of of would that year-to-date. because some ] to sales like if bottlenecks cost to some that pressures going on BOM quarters, related has get be you to the third-party last these increased in getting their few the a and out the finish and an forward the I OEMs more on push will curious hardware of I'm just line would on

I they with there's OE. Steve. that terms cadence, a drivers cadence And there's such this would transition work point, chronology of of There's any that overhang associated the to a natural regulatory in also, a interesting the sort with this to there's a scale, model. say for arrangement mobility an pace sustainable impending That's time operate. traditional and there's the

when . So talking this say watch is We just to can large need all patients I automakers. space. we're

question BNP. next of the line comes James from Our with Picariello

This James. is Jake on for

$X with quarter million burn has the implied the billion your now. like looks It into roughly liquidity cash previous lasting and I burn at So in just second XXXX. $X up the look to billion if of commentary from the implied stepped $XXX the over cash

So burn next through the get Gravity? about launch cash the really how of should everyone through year think you once

Yes.

shop, . And at then to One, the in expect is spend -- capacity Saudi go we things expansion XX,XXX So multiple to which XX,XXX from installed white AMP-X, in making our taking because if paint making stamping, in you of the $X.X are that guided, capital billion investment Arizona building significant we're later look is have investment, which body this as in where we there cash CBU investments, our we is in facility. are year. Arabia, around coming burn.

we capital So have there. continue. that expenditure amount that play in a of a also role capital significant significant And year, next expenditure will the

-- How up more then question guys following do some drill little And helpful. even consumer up some it, more providing on about to just some maybe in just try broader earlier a just more some potentially more very pictures thought mass the [indiscernible] interest teaser model. That's detail midsize a reservation opening market to from on the liquidity? base it. you and just door to Got some John's about

a put reservations think doesn't getting very waiting greater when to realistic open think that know ill that really we to consumer It the in of really time Well, specification with And production. the artificial deliberately served of being that's not because serves I Gravity, lacking don't that of is until say, and closer ahead get right have space that opening transparency we've up in such to. think reservations you interesting even it's that. X in a we're the years And consumer actually taken for out. believe think degree a list don't This doing, the let we've this reservations philosophy -- I a it's adopted. from as there's we're start in something we on gravity. that think be will that a close just we closer ill not over it is product future to I time taken is of I we anyway. any it's by product a that by much taking an is liquidity. transparency Remember the form with has players point. manner. way And would liquidity in way, that's a and reality. we been a some reservations it's transparency, and and I believe true an escrow product not absolute money -- false absolute we showing What something

Stifel. Gengaro next of question the line from comes Our Stephen with

getting Just of to us CapEx the the in a question as sort the about launch frame? to cadence 'XX, going burn. sense you Can think any back time cash give midsized necessary 'XX we of

interesting. it's mean, I Well,

on production. mean, that. very beyond of But gravity are we in will guided start which a I position, see haven't us We good

product incentives amazing have Saudi start to Kingdom there, Arabia of the that's going We factory for our setup we're a to some of the from put AMP-X and facility, midsized with. where in our

begins do Great. And before gravity order up follow-up open How you soon question. on just production quick a the orders? gravity

It's point. an interesting

as it this you in production an counts we build And I is start to Crexendo let TRIM Every vehicle. in think absolute can to we're forward we a transparency, environment of this opacity. year. schedule now. that of know can specifications the we that up us a that launch, when list we day Gravity later a don't I look on and space. will that opening runway watch we I specific for do and more of release details to that look, say, of waiting feel -- as want

Thank you.

disconnect. So concludes now you us Thank this Call. and may joining you all XXXX Lucid's Quarter for today, Earnings First Conference