Lucid (LCID) 7 Nov 242024 Q3 Earnings call transcript

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

Thank you, and welcome to Lucid Group's Third Quarter 2024 Earnings Call.

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

handing statements to that over securities laws. forward-looking the me federal Before you remind statements Peter, under some this on let the call include of call

are These limitation, company events. guidance, and macroeconomic to the industry trends, statements on and future the risks future performance of based outlook include, production and uncertainties. and expectations number a or statements today operating and and without initiatives These other actual company, of and due delivery results regarding as financial volumes, predictions financial and differ may of events

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

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

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

thank Thank us on for call. and everyone, you, our Maynard, earnings joining you, third quarter XXXX

support partners I'd their quarter Now and to start hard like before for thanking third by our I results, to suppliers get all employees, work. the and

indeed us billion. approximately capital a offering of affiliate partnership. I'd through Public Fund well corresponding into Investment public pro $X.XX month, and stock of into of approximately gives the for of we billion approximately runway like PIF their continuous also the to This $X.XXX Last $XXX support of financial Gravity and our ramp thank the and investment XXXX. and investors Lucid an a million rata common additional sufficient raised by

based opportunistic to as institutional and delivered said other strategy. from upon this that investors. we we'd support The with well be consistent We've our with as is strong the raise continue market PIF the

So turning delivered the the sequentially, XX% first the quarter another a vehicles, the of up We seasonally year-over-year industry. quarter. up the typically results. of the quarter had and year third approximately outperforming what to record continuing third momentum X,XXX with deliveries into in period half We softer is for XX%

of the in In within Lucid also industry and electric we outsold the the Air set of only of many but set market, our market many September, U.S. competitive the storied as gas not in vehicles, brands the in competitive most well. largest sold have the

think to I reaching notable. making we metric. awareness, And So this our our the brand due still third to grow all-time Lucid's we're brand high good is opportunity momentum much part Whilst think awareness, delivery is this we I is progress. this I an in more very growing quite quarter have tracking since a can And believe see started of in numbers. I still believe our you which

biggest advocates. the our and our customers continues like I'd on grow, vehicles to of who thank number The loyal road are to

extend gratitude. key success, our sincere are to a You I'd part like of and my

judiciously. we'll with to vehicles year X,XXX on are we've the vehicles X,XXX and for quarter XXXX. Turning production. to to produce with continue track manage the We in made the I'm produced third inventory, vehicle approximately and full delighted progress this

the I in production in said, quarter. an expect fourth that As would increase

site. be we our manufacturing by battery the transitioned (sic) third manufacturing ] in planned delighted powertrain various subassemblies we're transitioning quarter, factory. enclosure the fully [ at progress also I'm on optimization Arizona our the programs optimation and to site, In on cost and

benefits, a number when the help efficiency also factory will only including expect not logistics, integrated. of the should have this of fully We cost but

our demonstrate critically specializes referencing the just at only of Day XX technology but was advantage, this off cost to Manufacturing cost-effectiveness to our analysis. third-party our our competitiveness, that & in company Lucid to and Technology our data day SUV. its held purposely Gravity highlight type respected from factory September structured The technology We not as leadership, and Arizona show a objective on widely

We also and Lucid as to with test demonstrated vehicles into performance beta of closed advanced XX how Sapphire our translates course as vehicle technology X well ride preproduction Gravity launches. Lucid the comfort and Air

the Now I'm drivability had a car I've sedan my daily Gravity traditional the genuinely to may The be but forward test looking SUV. akin Lucid to ever would agree the I have opportunity ride those sports the than is the Air that driven, think a the Gravity Lucid to driver. well best more Lucid SUV is that first as

Arizona our analysts we'll levels be show able for of opened to time, high highlighting the and to and significant X that first to factory areas savings also We've automation of Phase we cost the have realize.

features software Turning On our updates, substantively we ADAS. to enhancing would many updates including with stop which over-the-air last in lane or I extended go. and System Assistance Advanced quarter, third earnings active over-the-air introduced delivered a package, software. of number control we as change Lucid enhanced and our such X.X UX Driver assist, the release And our promised curve quarter's call, speed

Assistant, interface Lucid X.X user introduced UX well Our new also as upgrades. our in-cabin our as assistant new voice

warning before adds via X.X, an curb. which last Lucid assist curb an the of week, wheel driver started a over-the-air feature, deploying rash software scrapes Lucid UX the And we innovative update Air

of and performance the performance. for systems audio upgraded improved our response also We

continue these to we Now to of purchase. after value how vehicle further bring tremendous the long are customer's a examples

the an very we're is robust, hands-free highway software will in that enable The the believe software map future, road think update going to I are it. over-the-air release assist. space, team I customers is Watch this have more of invigorated and near the love and really targeting In we much store.

rating the securing stars the X Program. Sapphire rating Lucid most the scores on Euro in advanced rigorous premier process. owners the star of possible in worked a to should Air I'm stars engineering priority clean more maximum highest top has X the vehicle X testing Program Touring Car for safety possible that crash safety been The stars even assiduously is follows for Touring, achieving Assessment government's European X goal safety. from the of safety Air. electric delighted design in information Lucid National This received vehicle Safety at a Lucid by and rollover New give overall overall This confidence enabled crash crash, making evaluating the ratings. and side highest for the program with earned Traffic NCAP possible the We the Air a New frontal in and also Car Grand Highway announce Pure, Lucid sheet Safety Lucid outset NHTSA's from and Administration's the highest customer Air of Assessment testing.

to So we thus far quarter celebrate throughout year. have and the much this

I think tremendous progress our to progress. through our first a is X the testament of quarters the year

Gravity. Turning today. opened to that announce and to we I'm Lucid the orders delighted pricing

live. we Our configurator of wheel there's are the is know Gravity, an of get Lucid us incredible telling they now amount Customers and are a to keen behind interest.

XX% the we example, days. studios, For foot saw XX had in And more across events increase roadshow traffic we our the than prior versus country. Lucid those in Gravity studios

to effect on I Lucid Lucid the having a helping Air. raise Lucid the awareness is the also think certainly, is of positive and brand Gravity

to very announce think soft soon very deliveries. And the when a scheduled a number be to able might is we'll The of position be we make just production weeks I first in away.

we the On engaged in technology licensing discussions. actively remain front,

You become industry active. can has the see that more

significant announcements my the binding. knowledge, in be well announce should However, And is binding because of the amount we've you greater announcements something to to appear if details many my are the you substance were philosophy before lose the be of leverage a set. seen industry can don't to of

say is this So I watch all can space. to

the to make SUVs that Lucid progress the the very for market. addressable brand all Air potential to to the Lucid believe Air. a significantly elements an opportunity as Gravity. momentum Gravity reshape this having has encouraged the by awareness has meaningful market time success I is with building. larger is momentum coming and believe that a we're coming in been with the the I'm and opportune scale closing, that innovation at I Lucid Lucid And In the

I And significantly has market. technology And it a believe larger our is technology than more been. addresses today in Atlas midsize for Unit relevant licensing, Drive ever our technology even

We're also benefits Lucid we've optimization our we're and nomenclature appropriate the our more the this identified a the and of Unit Gravity and is we growth transformation cost some platform. very like And programs strategic benefits as the into realizing Atlas tactically cost company. further from into areas reprioritize Midsize of opportunities. instilling Drive Perhaps DNA will

progress our and forward the And work of strategic to like I'd suppliers, to and investors our lastly, customers, So support. thank our our our look employees, future. I partners you for updating your of hard our your all in

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

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

Before I my I made have would for prepared a start also result team by work. the of Lucid your get The progress thanking entire we hard to achievements to efforts. is their like and significant remarks, direct

results. XXXX our to Turning third quarter financial

vehicles we our During third approximately vehicles this quarter, the produced reaffirm year. guidance X,XXX to produce we X,XXX and

yet than of deliveries third again approximately year-over-year more expectations XX% quarter, vehicles in up importantly, were ahead sequentially. X,XXX More of XX% the and

managed in we mentioned, to been outpaced we down experiencing as thus demand inventory. we the far. with have Peter production the are As further Deliveries vehicle work pleased quarter

approximately of and in million quarter, $XXX year-over-year flat the revenue third XX.X% We sequentially. reported up

Average due selling sequentially, product price mix. was primarily to down

were selling revenue recognized and vehicles please note third for deliveries of by those lease the total in quarter. calculating subject was that and immaterial by revenue price average who accounting X% to operating are the deliveries, taking it For dividing those

million. was third in revenue of the impairment Cost $XXX.X $XXX.X LCNRV million. The was quarter

directional a impacted points a second last of improved called warranty quarter, campaign provision provided better we the sequentially. quarter sequentially special gross Also, GAAP guidance that and XX gross margin. by out than margin we being related down percentage to

reduction would continued campaign, reason quarter gross percentage of was primary third our a improved that margin XX for approximately by still improved initiatives. result have The margin gross cost the points. Excluding

into we expect to gross As be largely margin we the quarter, look fourth flat.

we technology Lucid the will Day our driver. Technology a scale As we in highlighted be our increased enablers key margin, key believe of and forthcoming & and be our at will ramp Manufacturing gross Arizona, Gravity

out higher expenses. run-up up the increase expense, our million, the which earnings we operating start sequentially. QX was Lucid call production. in Now to called totaled expense $XXX.X of costs the moving related R&D on as quarter's to to Gravity compensation XX% to primarily as well last due stock-based and The

$XXX.X sequential primarily compensation again, we earnings quarter's million, stock-based as SG&A expense from called call. last was QX higher The QX. our due up out on to expense, in XX% increase was

we revenue compared XXXX of as percentage year previously, we XXXX. our full operating As with a guided expect decrease to expense

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

ended and the we as the XXX On body and vans continue service to continue shops approved expand studio footprint which cost additional worldwide. service fleet as in well XX service to provide to we side, ensure mobile QX as satisfaction center as centers, customer locations our satellite strategically as high plan with well will grow. effectively We

compensation stock-based million Our in $XX.X QX. the million expense quarter $XX.X to compared in was

prior In $XXX was third the of approximately stock. share which we mainly the by our quarter loss increase of of price QX, million to in This a increase compared our other mainly in $XXX.X expense, end preferred at the in with loss convertible derivative quarter. fair liabilities an recorded million, value included associated of the driven the due a redeemable to noncash

million $XXX.X in The margin. The largely with improvements was was improvement in adjusted gross EBITDA by $XXX.X loss compared driven QX. million

of per to GAAP associated related primarily net liabilities with non-GAAP and in stock. our derivative the convertible $X.XX. change share loss net $X.XX difference The share preference in was was value QX fair was loss redeemable per

sheet. cash, Moving to total liquidity quarter billion. the of billion and balance $X.XX We approximately with investments approximately cash equivalents the $X.XX ended and in

total in I thank billion mentioned, to a Public public approximately would their stock PIF partnership $X.XX support. Peter for rata and As an like the Investment affiliate investment through by a common raised offering of also Fund. October, corresponding of pro and a incredible we the of

healthy a exploring be our maintaining sheet opportunistic We strategic vision, execute and in on remain to to we'll continue to balance committed financing.

we Total spoke inventory. goods by finished to Turning was last the essentially inventory was raw quarter. materials flat buildup inventory as about sequentially offset of

in was million. $XXX.X QX CapEx

of outlook vehicles. We production X,XXX Moving guidance to XXXX reiterate the for XXXX. our approximately

recent inclusive liquidity We runway give XXXX. expect total will sufficient us $X.XX the into well capital billion raise of

CapEx. to Moving

prior in initiatives. We guidance guidance are part savings cost outlay deferrals XXXX from $X.X our This mainly $X reduction updating our XXXX billion. approximately capital into CapEx and to our billion certain of reflects of our as

start of late production Midsize Lucid of XXXX production From platform late a product XXXX. and scheduled start is Gravity scheduled the is for of perspective, our high-volume for

we cost quarter investing performance to cost have transformation to think significant approach and made a In go-to-market our while maintain our progress brand closing, managing initiatives fuel demonstrates awareness. continue and with our disciplined growth. We'll the I strategically to this

want upcoming Looking our launch excitement the about I of emphasize Lucid ahead, to the Gravity.

for you investors successful continued hope we to next of stakeholders and our your our Thank chapter trust to support. yet. make and most one this Together,

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

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

from Before through we those the want that post retail investors sent take platform. questions the some I on phone, questions Say in to Technology our

question first from C. comes Paul The

you price? believe do price As shareholder share do what near you investors hovering the still is protect and to to needed, say early more can the you path? lows, plan do With to share to improve What that all-time have funding the value? in company

to And company that P. look somewhat we'll there's related from future that what that of question is the like put asks Ryan the this another together. similar does

look, indeed. value. commitment. to taking your significant support so shareholder it's for Yes, want belief about. steps what that appreciate to That's thank and you all I to deeply with, assure Well, long-term much you the your we start and we're your company, deliver in

number that share have control, of have said, market impacted a our been undoubtedly Now conditions our out were some which price. And of challenging. of factors,

And confident growth you our long-term seeing strategic our in long-term in record I the that working we're And to remain the is see progress improve we financial and several However, on direction This think our in potential drive indeed, performance. our that business. to and both improvement in margins, and can our actively initiatives, already. and deliveries of gross play. a you're

recognized the and created this few widely driver growing in long recognized that Now also scale we're the how shown growing as starting last scale and have XEV the EV we technology introducing becomes growing down Gravity. term. widely we a technology recognition ] best that [ upon has now been the is world, car cost We've will that scale, largely And depends Air what the And as in world. best We're years. with in Lucid the is over by believe as that the profitability which products, realize scale. in

cars. Now Air, not This we're the even storied something, in many which is with and already is recognized. brands of sufficiently outselling Lucid EVs both gas

and up about orders class than Now today, we year entered larger Air. with market Lucid we've last that's has compromise. opened for is conceived our Gravity Lucid the revolutionary the Gravity Xx market ground been addressable without a new of SUV, from

follow And of for a think huge I us. scheduled remember, a really with that's high-volume Midsize to we'll platform really product this huge, be late production 'XX. for going start

a is recently potential at vehicles, powertrain, market our And new that see on huge And we -- I Atlas. licensing significantly for midsized licensing already that well underway mean, technology access focus a Atlas the we and I higher business. which suits with that's also the and The I work volume powertrain announced.

position our to to to deliver value these are collectively, enhance designed And and competitive our really long-term shareholders. efforts

got here? I have you add mean, anything Gagan, to

Peter. Thanks, Yes.

So have regarding that we raising. to market opportunistic we capital would be with transparent funding, it when think been I the comes

and enhancing improved are strong increased sustainable profitability remain financial and to to our through that operational the interest committed shareholders. value dedicated aligned We of a with We ensuring our efficiency, maintaining shareholder position best actions growth.

initiatives drive that We long-term shareholders. for position value our and believe us strategic our will for success

Indeed, of here. a Gagan. flavor I add can bit

myself savings you lots so I put it company into success. is make As incentivized many because this And all of a my me less known, more major me, to happen. own relate believe shareholder personally, to than nobody for I

be today. may founding as you goal know my to the not in company of transportation. towards of vehicle this the company aware electric sustainable of best many with joined that revolution add and it role a I XX ago also might the we I over years drive making

except of tax what My damn steadfast. this mission share for purposes. I've stock, is and my not single sold a was necessary dedication

to virtually more anyone as I And company's so the a directly shareholder, performance tied than am else.

shareholder to long-term promise is day this tirelessly And drive a continue tech that play. to and my night to long-term it value. So is and is play a work

to so more question line? a Skyler time we'll to R. you. what's second plan go affordable the the Stay offer from vehicle? If Thank you so, Do

impact is clear need And to do maybe our This because been and vision, years man, our to on the on just player. Well, the Oh, we exists price that, this have misunderstood. so a to mission, meaningful made be we yes. get we to here that scale. down. Lucid need scale, schedule haven't bring has planet, enough many for not We're niche this our now. to a

total So our September, a work of in underway. & already 'XX. peek vehicle. about is of this -- Manufacturing the million The be I'd midsized vehicle version vast. our one Technology in market showed The The X well we to is is our late This our addressed product, actually to love about start And $XX,XXX. year. we of last presentation for estimate vision to the is year. total $XX,XXX gave we're sneak of XXx addressable scheduled targeting production than midsized a Day we We which is market opportunity these sell

Great.

Our Will for private? chances Malik Lucid question does And buying next this are what Lucid from completely? go the of the is What H. out the Say Saudis investors? mean

question. the the Well, of thank mean, behalf place of for me would it on speak you, of be course, But Malik for PIF. I to out

with to the be the things: differentiates they hugely and us a I'm a say X grateful their what this to will technology And I company world-leading shoulder as stood for continue really support. and happen. partners. with long-term shoulder us fantastic PIF. this, though, are look, to enabled They've partnership

and shareholder transformation our through strategic value long-term driven our drive mission cost are to our initiatives. we our by growth Now and ambition

that. forget not Let's

from this we'll is C. positive Gravity? volume question our Can sales reach each? take And would margin on individually that Air and needed achieve last Okay. be you Paul for What to Say

to margin making projects we and we be I individually think you and progress contribution in pathway Air feel in see that With can comfortable gross Yes, improvements and margin. a positive will are pipeline, see all on good are Yes. we very where Gravity. the And and margin. I

fixed to have of sold cost factory. our our goods lot cost a related of We in

need to fixed addition in vehicle, get to And build a we of the scale cost. above level lowering to cost our a

we right the and in heading expect to scale. been have drive further direction with Air We even Gravity

high Gravity that cost the in reuse use a we in there's powertrain From perspective, technology of very Air.

I I bit That's mean, of here. completely maybe can a color add right, Gagan.

the On that the we've battery to reuse the true same to inverter same. ratio We XX% very different realize slightly modules The powertrain get different. people about side, technology, The need the from are got Air for virtually is to motor pack layout gear across tractability technology, use SUV. slightly Gravity. a

from we just and different Air to that. architecture But a in gone really from done through have I X -- don't think anyone do we've Gravity years. platform has able that been

By And sedan. to a product technology. different Air that's there's and not we're constrained a platform, we're never incredible in distinct across achievable using from SUV a been boundaries means get an good by our for designed And that because for of the that of a platform differentiation this. reason to able Gravity,

and full SUV. sized So practicality interior just Lucid Gravity midsized the SUV within provides footprint exterior of of a space

take platform. and Gravity them the across cost applied all Air we then also on the And from learnings a perspective,

design differentiation, addressable vehicle So than that cost to can greater a total this try platform. our entire little but product able at to And a we expand sound if the Air may lens were really we're just to market. we creating simply by counterintuitive, reuse bit

Great.

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

John comes Yes, line of your the question Murphy. first from

mix question Pure the your of price demand? and the sort first learning being as a to through elasticity lessons price Just greater working of taking are some What you of of action sort on is proportion Air.

the favorably slightly the Gravity the interesting more Touring Air. kind the taking on about might on really $XX,XXX it's conservative you Grand consumer Touring view Grand And less because from or of be side the a on it's that than

little just to price some some point it seems demand. lessons like a bit you're the further learning in and down So coming unlock

to lessons kind could what with So ramp And just the what of opposed Air? what the learning happened Gravity mean you're there. as that for

John. Yes,

on loaded fully big -- I if I one the think super Touring at than a the actually lower loaded on fully the in Gravity, big pricing our Grand super website It Lucid comes structure Gravity now in because value it's absolutely by of affordable competitors think the a at being our SUV entry you Gravity, actually electric now proposition X. of look configurator. price launched the of

so for just value shows a it And proposition money is. cracking what that

factor from addressed $XX,XXX so work most able is And Technology can got but virtually achieve we've the Because our $XX,XXX, That to we're of & at we've what Day. we're the able achieve materials carryover with there's technology. of from potentially. to here size over We've got Lucid XXX powertrain advanced I all technology that Manufacturing competitor. our much in give another got this half content in because us the advantage learnings bill and Air, battery this the a world, special miles range

on only use that's smaller more It And is to and that the pass being our it be less we there'll pack customers. occupies lighter because by not and electricity, the car value we fun less -- draw less grid. drive. that, run battery occupies less to to And The space. agile how cost more will proposition can interior

have roomier, adults. more comfortable X-seating your genuinely plus So space normal SUV, for in just we a the have the kids type car. get not X back. We X It's we a X

because this and technology is it technology play to become this, our now enabler. is a cost All starting a down is

Midsize, think I the question, when but second the the some the potential you whatever to about then Air, to on reuse the get a degree will over there? apologize skipping between are I and the and And what to name then trying maybe and the the commonality Gravity for Gravity could be ask Midsize,

the organization, resources being and your how in now perspective capital you -- capital perspective a in is general human Midsize? as from much focused sort think that And actual dollar on about capital of of

control look in So traction directly transferable. technology, control, all I stability of our management battery motor core at if of some that all logic, system, think you control, our control, expertise is

directly expertise, technology absolutely. a of that If you infotainment ADAS, our transferable. suite, lot look A lot our of software at core is

of the motor its of very well we're But version learning technology, and taking absolute our Zeus. is batteries. in best from about into affordable Atlas actually. because transferring all way, down Zeus program terms And in Atlas on that was Zeus an ultra-affordable Atlas. is it enabled cost

going So to and of very for Midsize going completely we're is to architectural take aimed battery volume. a architectural, the at advanced materials look really high and at new tech next-generation that cost reducing be bill

different high-volume proven So tour use upon as a the center is vehicle, the very we've got the the de and driver. we down Air much best different Gravity. in very This of factory cost force the and We've focused animal. will processes technological

the approach. a It's Its to is be is be the machine. that cost conscious. builds to focus different really going machine Midsize going

from line of comes question Cantor Fitzgerald. next Andres The the Sheppard with

bit a think if with better quarter. is but the next to next Just what the in if or mix a I'm year and on Congratulations idea you the early, be -- curious what unit year. wondering that the it are might kind to way Air Gravity terms anticipating for the up ramping for Gravity? of know about curious of see I an sense you Peter, have

we've high-end announced time, a Grand at starts We Gravity $XX,XXX. Touring, that. bring huge the is Lucid a with product which an 'XX at in think Gravity Touring. -- latent what done, there moment out We've the we've first, later demand So Gravity we'll Lucid that in appropriate started for

point XXX miles which It of a starting machine. product over XXX-horsepower think Touring price really high-performance, true is cracking I flying Grand range, X-seater, $XX,XXX, the The a at for machine. is

right before think latent that get manufacturing up. there's buildup and market constrained. to been the expectations I going constrained to the I've we build manufacturing Gravity. a our anticipate I and for demand not judicious constrained quality take for in stated We we're year approach Touring. with next very with quality as Air, be we've huge to we're need that of Grand ramp the meeting the prudent customer So

be stage we quality constrained manufacturing deem we Touring in ramp-up, mindset appropriate. Well, next ramp-up the some late I to anticipate we'll demand. transition then constrained by not will And at year market when that

to XXX,XXX the up Got helpful. maybe it. with vehicles. the you and the That's a believe on of majority in I for platform. government as the want the fact Gravity actually follow-up, just Arabia color. touch past deliveries to had the will to the And of the the Saudi agreements super I vast customer contract quick for Midsize alluded Appreciate that this be that

foresee So a, of I light you significant year, guess, you ramp-up confirm next in deliveries a wondering up Saudi b, Gravity I if wanted do And that. ramping to in now the to Arabia?

of although based that that we price anticipate be will distribution those deliveries Well, upon -- point, a thanks, not being actually Andres. determined. is, is of that I mean, said natural look, there what we a

is So that electric you've Saudi the we from Arabia. East got or a gives It the to been X,XXX actually all-wheel-drive is times in tractability SUV extreme think you going literally as Middle a second power, perfect grip operating that sandy and be I car Gravity the for what low the is control waiting conditions. market broader This East Middle precision traction for. with an really believe has

of -- heading early be the year. is think hoot it's the next and to for KSA early I a going some of straight be So part going build to

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

XXXX is following Gravity several prior Gravity on think about But I mean, gross the progression you just be Gravity would but then next as I quarters, me, I volume. do imagine the How gross sort the the one at the margin the we of a over impact? how it about for the to headwind, So margin think the and about think we when at question. up two ramping get think we should in the start of production ramps? beginning,

absolutely. Yes,

Peter that Gravity. Air are earlier, our already learnings from mentioned applying As we to

better we in we look a where are at. So shape

to that Gravity is scale. and the for in us heading with even we that feel confident are technology reduction cost direction expect drive efforts And the we our giving right We Gravity but further very scale. Air,

So in in right XXXX, QX, or for today, Gravity. we we the are delivery not guiding are trajectory but which production we'll a numbers cost do perspective for from

I When know Okay. curious it cash. versus of think when about chose kind high felt capital, how your just you the needs a raise, capital And because longer question, a of it was and you have I Great. do recent the just need like did other capital it timing the runway. about like had And you and level. to you of to creates to confidence kind

thinking how you balance sort that out. Just of about

I'm Well, actually asking. me thank you you asked glad Stephen actually. that, for

So $X.XX recently and just our of takes it that raised financial runway nearly and company future through secures its XXXX. into recap, us the Gravity, but And not of way billion well the -- to the past production the phase. that ramp-up we well start secures of

the the in commercially how really And billion a key love buck been we've it brutal been because raised that we of this just where in shows of year and Wall market means as with well there's value XXXX both can just differentiator. product EVs. Street's trend our of a a tech, out cognizance And for over fallen $X what's the

we had Now come as because whatsoever no before financial runway into XXXX. should this surprise QX a

to want a year. than never less You be a runway have --

capital is last things I the run right said want would Why it perfect right last minute. would and sense. not the makes always and moment run opportunistic And minute? be to to things we when So I've the right raise to just

would period? What than running was I I it less we be a want don't runway. into We to prudent move. took run year's did, financial the opportunity. to holiday very a Why the I think, want

So been I has this misinterpreted. think

others company. I positive able news our think for It's step the have forward it's when raised capital been We've had a future. our super -- to. huge securing not in

And should $X.XX again, be went there's another recognized. that on pro litmus here, billion. The which PIF rata

X got So you've factors.

independent value. got of third-party validation You've our

it's because because the to upon but is a So are XXXX commitment transition arrangement the But we [ PIF we're sustainable are cornerstone a support to and us sole Lucid's dependent transcends this to go Saudi to which of technology, shoulder term, a bold again partnership that. PIF. their And economy. not Lucid financial just ] together shoulder long the of Arabia's to long-term enable we in going absolutely vision showed near which for and

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

well. as next Gravity. just first and are questions on Gravity, the if What follow you I standpoint implications X for there guess, a from conversation any? through ramp the year all capital working as all, are to with of technical the had I about the cost similarities

midsized that right as trying just the vehicle, And has company success then happen for is year financial ramp a into position the now. and you to about ahead to think to I'm order towards 'XX in for given what of next understand secondly, go where

Yes.

are we So a expecting are cost today the together, take us well And that if funding one. -- it technology initiatives, and where said at XXXX. and into coming things perspective, will we our from look well continued are proud earlier, into we you capital reduction working very now as of railway all with financial

terms question, follow In I completely the one. up -- second that what's on sorry, of didn't

understand dollars we versus that, as just Yes. the next might that ramp. to working capital Well, trying go out of door you go year year before I'm the this into

during color And provide full the QX more for color CapEx. as typically, Yes, XXXX. we'll dollars margin well there, as for so we'll the year cover, OpEx and perspective, guidance on the our okay, gross

the cover earnings. we'll that quarter So in next

types type funding And you'll third is are vehicle. to Okay. in the it different out have there trying there understand in crossed like X third just to X I'm what of have the out Or for confidence as models long then of as it just the thresholds with is a vehicle? do to be vehicles that there, ramping order

to like powertrain on We've is to we've the very large a already Midsize. creating in very powertrain large start It's get the confidence the order got Midsize. of started. not of working already Atlas engineering power proportion team and technology is A developing team proportion Midsize. A to

thinking late. are to going are in Midsize is production start And readiness foundations Even I Arabia, walls the steel even The of for late a some up. that on think factory factory. the build The 'XX. in we're in, Saudi

a So brand quarter and steps addressable car there licensing. as been grows total the technology will is Airs steps car next Midsize, are scale. to Those we're more then there. then scale. on about the we step out the platform. one. to going And far X this icing on has Xx We're cake be serious America That And all all Gravity, to get the with And this are are market superior realize more the then really for is big EV world each big that's to the awareness offerings scale. for. selling lane waiting That's get the people is Midsize. our and X is And really in these

question the Tobias final line Redburn with Your comes Beith Atlantic. of from

ask I have separately. which I'll please, two,

and that it, write new was Gagan, -- i.e., of purchase profitability chain charge more impaired the to value inventory the That suggests was in inventory for the down unfinished sequentially vehicle stock underlying Firstly, was call or of better. purchased less, was, flat period. logic the new

confirm cost if, wondering you if expand can efficiency firstly, your on remarks? this in secondly, was comments the I And you is prepared can correct?

Absolutely.

So -- correct. absolutely said your what is yes, you

As getting inventory our correct. better. better is new our cost, we impairment on on Absolutely are getting

Now coming efforts. the to cost

some by points. whether cost, later. If is itself we comparing But results months sequentially, basis a by and if you we still we efficiency improved percentage QX quarter, BOM operational at that the our actions, GAAP XX a XX QX, campaign. we last cost, come board, but apple-to-apple. would across sometimes logistics please gross a excluded, margin although And take it's the improved we percentage had because few warranty look that it's Even have note with points

as that. that's we are the to we with And the this foreseen said trend. now pleased opening Very comfortable where where seeing are So are why, and in I be period. my remarks, we expect in very we

I And quite of been cost now. of logistics, reaping follow-up Okay. said from guess, it's materials, number kind theme cost savings for just a quarters that. small The down, of bill a to of

realized talking you just whether it. cost like from more actions of savings things wondered the to and you time I How for a I Sherry, need some away the And was when cost your I from freight difficult Air. remember remove and to far actually guess, In where we are take, about fact, being line. predecessor, cost on could perhaps savings all me place

have for one if that's I And Peter, okay. then

great question. a That's

recurring. is Our journey

consistent We are taking efforts.

fact, we end In even want be our and where that. targets we to identified we next to where to we middle be beyond want next end year have of be of of where this want year, year,

we're So parallel, is doing us reductions. technology cost the efforts on we going bring cost, the cost is drive make In significant are the helping what like to down, battery unit.

to targets, to our significantly come you see to level significantly in terms is what all going cost vehicle and variable because it right the coming, Gravity will bringing are down. around per targets And when it scale going But cost next to with doing with we significantly down. of we turn now come scale fixed the take for where what is us

we next 'XX, in margin, when So are on on we that will be you'll journey. look the where XXX%. so year last improvement, we we was in track and are see you earnings provide directional if the about year, that negative right negative XXX% gross the color It QX some at

Okay.

if for what modular that a following. vehicles correct, I Peter, a top differentiation allow when which different platform bases could wheel LEAP say have and design. to you mean would uses I'm by explain you Gravity you think hat platform, wondered identical nearly both the Air. I If I'm a is

So mean of you a a uses different platform. understand by to what I little want bit Gravity kind exactly just

could LEAP as is have have CUV, done product. things like that a done where a could Cooper, you have do of lots where you could fairly you're a you could done platform modular minivan, a you a compromised

X is as example S because it's S. it's CUV-like more -- look really based Model at upon of versus an X not SUV, Model you proper If that platform. is Tesla

We much capture more means capability, you travel, to a And suspension. Air links, of avoid took differentiation cannibalization need of that really suspension means to We more with wheel diameters, get wanted more that TAM decision movements, market. more Gravity. longer durable wheel Xx a the to product larger true off-road the more SUV

going and rated brakes a So arms heavier to you're for have suspension durability. off-road and

And also, with life a adjust that height the suspension, rugged trails. So the right long on we combined we of endures the so thing air vehicle. could

The around advanced thing with for to that concept, people. occupants the the create order miles XXX package the is the sedan, achieved around we the space battery And that's pack which in sculpted CUV. the other and sculpted a most great a Air, range

moved what really the need And same underneath battery achieve floor battery, around with with under of shape SUV, a seat them the is rear modules, makes X content. to seat. that we but that just X-row from front a a you but XX% we've flat we carryover different same so the could for got technology But the

to I the in But transformative tell you it's regards product.

And a couldn't optimized. SUV kill you've would carryovers. do And a product sedan. got we true us got with A and and for very, a You've different that very true platform carryover differentiation. very sports realized they're we really

tell we've me let that And now. you, done

when from Just -- market. we X only over years mean a Air it's smidgen I launched into the

year the done is operating For precedent that X And is we Gravity engineering through an ever on this team for no for at. company, team, achievement in second kept late years. no There a a doing platform admirably. them all and To the for one's is production of track rate this really relatively it. hit I applaud young my really, year, start incredible

you different -- do not this How when has I me it I guess, things scares bit. hear like Okay. they're little the impacted a top think hat, So that cost? just a actually

as gets full What happens this it sharing very same value platform, disproportionate I the but There you because know, is share talked the true rarely platform platform. it's problem. but modified. upon is is a about placed

different. an is to of suspension to is to going All seats to is Now going different. different be different. different. all be are The be going be are The be wheels are different weight the be going anyway. controls The superstructure to be going The anyway. going The different. SUV to are going brakes driver to

mechanisms collapse you be your crash So different. those and and way the structure have to engineer

a There's software motors. same Where motor and and of inherently of the the of and battery lot all all value, and proposition in got in inverter, XX% architecture all the carryover. state-of-the-art same powertrain motor, scale componentry. value system, goes real value is same the the that We've the economy is control the Wunderbox, software modules, the

suspension, glass, and doors, to the the over going be seats not You're to the anyway. the carry the able tailgate

different it So part small TAM. of that wow, didn't do If think of I there's saying, -- to a a Xx just it's it, is we relatively don't differentiation. be get tiny product you'd new all bit another that,

not the saying, be cannibalization TAM, enough. situation. got differentiated the Xx you Maybe is You'd this well, Xx a not It's TAM.

This bit huge opportunity. more a is proposition. a cost, value A market a more engineering, bit

closing call Maynard Um you. Thank now to back over will for turn remarks. the And I

Earnings Thanks, everyone, now This Quarter Call. Conference XXXX joining concludes Thank us Lucid's Third you. for today.

joining. Thank you, for everyone,

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