Q1 2024 Lucid Group Inc Earnings Call

May 6, 2024

Operator: 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. Later, we will conduct a question and answer session. If you would like to ask a question during this time, please press star 11 on your touchtone telephone. You will then hear an automated message advising your hand is right.

Ladies and gentlemen, thank you for standing by and welcome to the lucid group's first quarter 'twenty 'twenty four earnings conference call.

Operator: To remove yourself from the queue, please press star 11 again. I would now like to hand 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 first quarter 2024 earnings call. Joining me today are Peter Rawlinson, our CEO and CTO, and Gagan Dhingra, our Interim CFO and Principal Accounting Officer. Before handing the call over to Peter, let me remind you that some of the statements on this call include forward-looking statements under federal securities laws.

Please be advised that today's conference is being recorded.

Later, we will conduct a question and answer session.

Ask a question during this time, please press star one on your touched on telephone.

You would then her automated message advising you hand this race so we.

Remove yourself from the queue. Please press star one again.

Speaker Change: I would now like to hand, the conference over to your speaker for today.

Speaker Change: Senior director of Investor Relations. Please go ahead.

Speaker Change: Thank you and welcome to loosen group's first quarter 2024 earnings call. Joining me today are Peter <unk>, our CEO and CTO and Goggins <unk>, our interim CFO and principal accounting officer.

Operator: These include, without limitations, statements regarding the future financial performance of the company, production and delivery volumes, financial and operating outlook and guidance, macroeconomic and industry trends, company initiatives, and other future events. However, these statements are based on predictions and expectations as of today, and actual events or results may differ due to a number of risks and uncertainties. We refer you to the cautionary language and the risk factors in our most recent filings with the SEC and the forward-looking statements on page 2 of our investor deck, available on the investor relations section of our website at ir.lucidmotors.com. In addition, management will make reference to non-GAAP financial measures during this call.

Speaker Change: Before handing the call over to Peter Let me remind you that some of the statements on this call include forward looking statements under federal Securities laws.

Speaker Change: Include without limitation statements regarding the future financial performance of the company production and delivery volumes financial and operating outlook and guidance macroeconomic and industry trends.

Speaker Change: Any initiatives and other future events. These statements are based on predictions and expectations as of today and actual events or results may differ due to a number of risks and uncertainties. We refer you to the cautionary language and the risk factors in our most recent filings with the SEC and our forward looking statements on page two of our investor deck available on the <unk>.

Speaker Change: Mr Relations section of our website at IR Dot lucid motors Dot com.

Speaker Change: In addition management will make reference to non-GAAP financial measures. During this call a discussion of why we use non-GAAP financial measures and information regarding reconciliation of our GAAP versus non-GAAP results is available in our earnings press release issued earlier this afternoon as well as in our investor deck with that I'd like to turn the call over to.

Maynard Um: A discussion of why we use non-GAAP financial measures and information regarding reconciliation of our GAAP versus non-GAAP results is available in our earnings press release issued earlier this afternoon, as well as in our investor deck. With that, I'd like to turn the call over to Lucid's CEO and CTO, Peter Rawlinson. Peter, please go ahead.

Speaker Change: Loosen CEO and CTO Peter Robinson, Peter Please go ahead.

Peter Dore Rawlinson: Thank you, Maynard, and thank you everyone for joining us on our first quarter 2024 earnings call. In my prepared remarks today, I'll discuss our partners at the PIF, our better than expected production and delivery figures, our cost advantage, and our overall momentum, all of which makes me more optimistic than I've ever been about our future. Now, I believe there are two key factors that really set Lucid apart.

Peter Robinson: Thank you you may not and thank you everyone for joining us on our first quarter 2024 earnings call.

Peter Robinson: In my prepared remarks today, I will discuss our partners at the Pis.

Peter Robinson: That's as unexpected production and delivery figures.

Peter Robinson: Cost advantage and our overall momentum all of which makes me more optimistic than I've ever been about our future.

Peter Robinson: Now I believe there are two key factors that really leads to the Pos.

Peter Dore Rawlinson: Our superior in-house technology and our partnership with the PIF, who have been steadfast investors and partners. In Q1, we raised $1 billion in capital through a private placement of convertible preferred stock to an affiliate of the PIF. We're a strategic partner in the country's plan to achieve its Saudi Vision 2030 goals. I'm very grateful for the PIF's continued confidence and their steadfast support. Now, turning to production and deliveries, in Q1, we produced 1,728 Lucid Airs, and we delivered 1,967, both slightly above our expectations.

Peter Robinson: Superior enhanced technology, and our partnership with the Pis, who have been steadfast investors and partners.

Peter Robinson: In Q1, we raised $1 billion in capital through a private placement of convertible preferred stock to an affiliate of the Pis.

Peter Robinson: We're a strategic partner in the countries plan to achieve its Saudi vision 2030 goals.

Peter Robinson: Very grateful for the continued confidence and steadfast support.

Peter Robinson: Now turning to production and deliveries in Q1, we produced 1728 lucid as and we delivered 1967, both slightly above our expectations. In fact, it was our best quarter to date.

Peter Dore Rawlinson: In fact, it was our best quarter to date for deliveries, up 39.9% year over year. Our lower production than deliveries is an active decision to be cost conscious, and it's not a reflection of production bottlenecks. For 2024, we expect to produce approximately 9,000 vehicles, which is consistent with our guidance last quarter. Let me now provide you with an update on where I believe Lucid stands today.

Peter Robinson: For deliveries up 39, 9% year over year.

Peter Robinson: Our lower production than deliveries.

Active decision to be cost conscious and its not a reflection of production bottlenecks.

Peter Robinson: For 2024, we expect to produce approximately 9000 vehicles, which is consistent with our guidance last quarter.

Speaker Change: Let me now provide you with an update on where I believe lucid stands today.

Peter Dore Rawlinson: We've made solid progress on both brand awareness and pricing, with our general brand awareness rising in the first quarter despite reducing media spend from the fourth quarter. Now, Lucid Air is increasingly recognized as a superior vehicle in nearly every aspect that customers value. For the third consecutive year, Lucid Air was named the best luxury electric car by U.S. and world reports in its 2024 Best Hybrid and Electric Car Awards. Lucidaire is the only EV to win this category award three years in a row.

Speaker Change: We've made solid progress on both brand awareness and pricing with our general brand awareness raising in the first quarter, despite reducing media spend from the fourth quarter.

Speaker Change: Lucid is increasingly recognized as a superior vehicle in nearly every aspect of the customers.

Speaker Change: <unk> for the third consecutive year lucid and it was named the best luxury electric car by U S and we'll report on its 2024 best hybrid and electric car Awards.

Speaker Change: Lucid.

Speaker Change: Only EV to win this category award three years in a row another achievement that sets us apart.

Peter Dore Rawlinson: Another achievement that sets us apart. Lucid Air solves buyers' key concerns. It has price parity with gas car equivalents. It's the longest-range and fastest-charging production car in the US market. It's engaging to drive with remarkable performance, and it enjoys lower total running costs due to its efficiency. Now, consumers are savvy, and they recognize the deficiency of other EVs in the market, particularly the limited range of most EVs. To ease fears of range anxiety, other automakers must produce and install bigger batteries, which results in a higher cost to charge the vehicle and longer relative charge times versus Lucid Air. Remember, Lucid Air is the most efficient vehicle in its class, as measured in miles per kilowatt hour, while leading the industry for range and charging speed and having a lower total cost to charge.

Speaker Change: Lucid ourselves buyers can concerns it has price parity with cash cash equivalents, it's the longest range and fastest charging production car.

In the U S market. It is engaging to drive with remarkable performance and enjoys a lower total running costs due to its efficiency.

Speaker Change: Now consumers are savvy and they recognize the deficiency of other evs in the markets, particularly the limited range of most evs.

Speaker Change: To ease fears of range anxiety, other automakers must produce and install bigger batteries, which results in higher cost to charge, the vehicle and longer relative charge times versus lucid.

Speaker Change: Remember lucid is the most efficient vehicle in its class as measured in miles per kilowatt hour.

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

Peter Dore Rawlinson: I've seen commentary about our losses per vehicle, but such speculations reflect a lack of knowledge about our costs and our scale-up intentions. Inside the ostensibly high cost of goods line item is the cost of the factories and equipment needed to make the vehicles and scale our business. If we had imagined the company would only make a small number of vehicles, we would have purchased less equipment and built a smaller factory.

Speaker Change: I've seen commentary about our losses per vehicle, but such speculations reflect the lack of knowledge of <unk> costs and our scale of intentions.

Speaker Change: Inside the extensively high cost of goods line item is the cost of the factories and equipment needed to make the vehicles and scale our business.

Speaker Change: If we envisage the company would only make a small number of vehicles, we would have purchased less equipment and built a small country.

Peter Dore Rawlinson: But we have a more ambitious goal to provide affordable, long-range EVs for mainstream, mass-market consumers. And, as we scale, the leverage in our model should become obvious. And we're embarking on a transformational phase, the expansion of our vehicle lineup. Lucid Air Pure is already here with a starting price of $69,900.

Speaker Change: We have a more ambitious goal to provide affordable long range evs for mainstream mass market consumers.

Speaker Change: And as we scale the leverage in our model should become obvious and we're embarking on a transformational phase the expansion of our vehicle lineup.

Speaker Change: Lucid a pure is already here with a starting price.

Speaker Change: $69900 and the gravity SUV program is scheduled to start production late this year.

Peter Dore Rawlinson: And the Gravity SUV program is scheduled for the start of production late this year. Our SUV's total addressable market is six times larger than the market we could access in 2023. And the excitement is palpable. In a third-party survey, already two-thirds of EV-SUV purchasing tenders would consider Lucid. And this is worth emphasizing, 2 in every 3 people intending to purchase an electric SUV know about and would consider Luci

Speaker Change: Our Suvs total addressable market is.

Speaker Change: <unk> times larger than the market, we could access in 2023.

Speaker Change: And the excitement is palpable.

Speaker Change: Third Party survey.

Already two thirds of EV SUV purchased in timbers would consider lucid.

Speaker Change: And this is worth emphasizing.

Speaker Change: <unk> in every three people intending to purchase an electric SUV nose and would consider lucid.

Peter Dore Rawlinson: Amongst all SUV purchase intenders, EVs and gas SUVs, more than 50% would consider Lucid. Now, this is a staggering figure for any brand, let alone a new one, and thus reflects the significant opportunity ahead. We're continuing to invest in our future with further virtual vertical integration, stamping body and whites for the gravity SUV program, paint shop expansion, and powertrain at AMP1, an important part of our longer-term We've applied all of our learnings from AIR and incorporated them into our SUV program.

Speaker Change: Amongst all STB purchase in tenders, Evs and gas gas Suvs more than 50% would consider lucid.

Speaker Change: This is a staggering figure for any brand let alone a new one and thus reflects the significant opportunity head.

Speaker Change: We are continuing to invest in our future with.

Speaker Change: Virtual vertical integration stamping bolting and waits for the gravity SUV program paint shop expansion and powertrain won an important part of our longer term cost and quality strategy.

Speaker Change: We've applied all of our learnings from air and incorporated them into our SUV program. So I'm confident that gravity will redefine the segment with world class range efficiency charging speed and interior volume.

Peter Dore Rawlinson: So I'm confident that Gravity will redefine the segment with world-class range, efficiency, charging speed, and interior volume. Later this year, we plan to host analysts and institutional investors at our AMP One facility in Arizona to show you our state-of-the-art factory manned by our incredible employees and the machines that build the cars. We'll also have vehicles on the road later this year for you to test drive.

Speaker Change: Later this year, we plan to host analysts and institutional investors.

Speaker Change: And one facility in Arizona to show you a state of the art factory manned by our incredible employees.

Speaker Change: The machines that build the machines.

Speaker Change: We'll also have vehicles on the road later this year for you to test drive.

Peter Dore Rawlinson: And following the Gravity SUV program, we see another step change in total addressable market expansion with our midsize vehicle, which is scheduled for start of production in late 2026. I'm confident that we can achieve unrivaled levels of efficiency for this crucial mid-sized class vehicle. And again, I can't stress enough, efficiency is the key to a smaller battery for any given range.

Speaker Change: Following the gravity SUV program, we see another step change in total addressable market expansion with a midsized vehicle, which is scheduled for start of production in late 2026.

Speaker Change: I am confident that we can achieve unrivaled levels of efficiency for this crucial mid sized class vehicle and again I can't stress enough efficiency is the key to a smaller battery for any given range.

Speaker Change: And a smaller battery is a key element to lower cost when it comes to making an EV.

Peter Dore Rawlinson: And a smaller battery is a key element to lower cost when it comes to making an EV. I can't wait to show you our mid-size game changer. Next, I'd like to talk about our technology business. Our Aston Martin deal continues to generate more interest in our technology from other prospective partners. And, additionally, we are the sole supplier of a front drive unit to a leading electric racing series.

Speaker Change: I cant wait to show you Mitch.

Speaker Change: Mid size game changer.

Speaker Change: Next I would like to talk about our technology business.

Speaker Change: And Martin deal continues to generate more interest in our technology from other prospective partners and Additionally, we are the sole supplier of the front drive unit to a leading electric racing series.

Peter Dore Rawlinson: Please watch this space as we continue to discuss monetization opportunities across all aspects of our technology, including our world-class software. I'll close with additional details about our momentum. We surpassed 12,000 vehicles on the road in Q1, which takes us nicely past the critical threshold for boosting word of mouth awareness. And I'm pleased with the 39.9% year-over-year uptick in sales in Q1 and with the momentum we're seeing here in April. I always offer some caveats.

Speaker Change: Please watch this space as we continue to discuss monetization opportunities across all aspects of our technology, including our world class software.

Speaker Change: I'll close with additional details about our momentum.

Speaker Change: We suppose 12000 vehicles on the road in Q1, which takes US nicely passed the critical threshold into boosting word of mouth awareness and I'm pleased with the 39, 9% year over year uptick in sales in Q1 and.

Speaker Change: With the momentum we're seeing here in April.

Peter Dore Rawlinson: We expect typical seasonal slowing in Saudi Arabia in Q2, and we expect typical seasonal slowing globally in Q3 as consumers go on vacation. Despite this, for the first time, I feel we're on the cusp of escape velocity. We have sales momentum, a compounding efficiency advantage, unprecedented interest from consumers and corporate partners, more than five billion dollars in total liquidity and gravity, which I believe is on track to become the world's best SUV.

Speaker Change: I always offer caveats, we expect typical seasonal slowing in Saudi Arabia in Q2, and we expect typical seasonal slowing globally in Q3 as consumers go on vacation.

Speaker Change: Despite this for the first time I feel we're on the cusp of escape velocity.

Speaker Change: We have sales momentum a compounding efficiency advantage.

Speaker Change: Unprecedented interest from consumers and corporate partners more than fully billion dollars in total liquidity.

Speaker Change: Gravity, which I believe is on track to become the worlds best SUV.

Peter Dore Rawlinson: Therefore, I've never been more confident in our future. So, before turning the call over to Gagan, I would like to take a moment to acknowledge a recently announced management change. Derek Carty will now lead Digital's organization as interim head, taking over from Mike Bell, who will be leaving to pursue other opportunities.

Speaker Change: Therefore, I've never been more confident in our future.

Speaker Change: So before turning the call over to <unk> I would like to take a moment to acknowledge our recently announced management change.

Speaker Change: And Derrick County will now lead digital organization as interim head taking over from Mike Bell, who will be leaving to pursue other opportunities.

Peter Dore Rawlinson: I'd like to thank Mike for all of his contributions. Mike joined Lucid in early 2021 and was instrumental in building a truly unparalleled software organization. Mike will be staying on for a period of time in an advisory capacity, and I have full confidence in Derek and the digital team as we enter into our next transformational phase of the company. So I'll end with a big thank you to all of our suppliers, our partners, and our shareholders.

Speaker Change: I'd like to thank Mike for all his contributions Mike joined <unk> in early 2021 and was instrumental in building a truly unparalleled software organization.

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

Speaker Change: So I'll end with a big thank you to all of our suppliers our partners and our shareholders.

Peter Dore Rawlinson: And most of all, thank you to all Lucid employees for your commitment, your dedication, and sheer hard work. So, with that, I'd like to turn it over to Gagan Dhingra to provide an update on our financials. Thank you, Gagan.

Speaker Change: Most of all thank you so all the <unk> employees for your commitment your dedication and sheer hard work.

Speaker Change: So with that I'd like to turn it over to Gary <unk> to provide an update on our financials.

Speaker Change: Ed.

Gary: Thank you Peter.

Gagan Dhingra: Thank you, Peter. And thank you to those who are taking the time to join us today. Before I get to my prepared remarks, I would also like to start by thanking the entire Lucid team. I am continually amazed by and thankful for everyone's dedication and perseverance. Turning to our 2024 first quarter financial results. During the first quarter of 2024, we produced 1,728 vehicles.

Gary: Thank you to those who are taking the time to join us today.

Gary: Before I get to my prepared remarks.

Gary: I would also like to start by thanking the entire lucid team.

Gary: I am continually amazed by and thankful for everyone's dedication and perseverance.

Gary: Turning to our particularly for fourth quarter financial results.

Gary: During the first quarter.

Gary: We produced 1728 retail.

Gagan Dhingra: And we reiterate our guidance to produce approximately 9,000 vehicles this year. We delivered 1,967 vehicles in Q1, nearly 40% year over year and up 13% sequentially. In Saudi Arabia... We resolved some of the logistical go-to-market challenges we had in Q4, and we were able to ramp up deliveries in Q1. We are also pleased with North American volumes, which we think are benefiting from growing brand awareness, an increasing number of vehicles on the road, and improving affordability.

Gary: And we reiterate our guidance to produce approximately 9000 vehicles this year.

Gary: We delivered 1967 vehicles in Q1.

Gary: Hi.

Gary: Nearly 40% year over year.

And.

Gary: 13% sequentially.

Gary: In Saudi Arabia.

Gary: We resolve some of the logistical and go to market challenges, we had in Q4, and we were able to ramp up deliveries in Q1.

Gary: We're also pleased with North American volumes.

Gary: With pink is benefiting from growing brand awareness.

Gary: And increasing number of vehicles on the road.

Gary: And improving affordability.

Gagan Dhingra: We are encouraged by what we are seeing. Turning to the PNM, revenue was $172.7 million dollars, 9.9% sequentially, driven primarily by higher deliveries. Average selling prices were down sequentially due to mix as well as the pricing adjustments which affected part of the quarter.

Gary: We are encouraged by what we're seeing.

Speaker Change: Turning to the P&L.

Speaker Change: For Q1.

Speaker Change: Revenue was $172 7 million.

Speaker Change: Up nine 9% sequentially.

Driven primarily by higher deliveries.

Speaker Change: Average selling prices were down sequentially due.

Speaker Change: Due to mix.

Speaker Change: Well as new pricing adjustments, which affected a part of the quarter.

Gagan Dhingra: The cost of revenue in Q1 was $404.8 million. Despite a lower average selling price, our gross margin improved on a quarter over quarter basis due to both cost optimization initiatives, including a reduction in the bill of materials and logistics costs, and lower impairment charges in Q1 related to LCNRV. The LCNRV amount was approximately $137.8 million.

Speaker Change: Cost of revenue in Q1 was $404 8 million.

Speaker Change: Despite lower average selling price our gross margin improved on a quarter over quarter basis.

Due to both cost optimization initiatives, including production and bill of material and logistics cost.

Speaker Change: And lower impairment charges in Q1 related to LTE and <unk>.

Speaker Change: On the LTE and <unk> was approximately $137 8 million.

Gagan Dhingra: A 20.8% reduction from Q4. Fixed costs related to the depreciation of our factories and equipment remain a large part of our cost of revenue. And as we ramp up production and delivery, we expect the overhead per vehicle to significantly improve. There are many controllable and uncontrollable variables that can affect gross margin, and as a result, we don't typically provide specific gross margin guidance. However, I want to provide some directional color to aid in your modeling.

Speaker Change: Two 8% reduction from Q4.

Speaker Change: Fixed cost related to the depreciation of our factories and it remains a large part of the cost of revenue.

Speaker Change: And as we ramp up production and deliveries.

Speaker Change: We expect the overhead per week to significantly improve.

Speaker Change: There are many controllable and uncontrollable variables that can affect gross margin.

As a result, we do.

Typically provide specific gross margin guidance.

Speaker Change: However, I want you to provide some directional color to aid in your modeling.

Gagan Dhingra: Looking forward to the second quarter of 2024, we anticipate gross margin to remain flat, despite a full quarter price adjustment in Q2 instead of a half quarter impact in Q1. This improvement is mainly due to further cost optimization initiatives. As we move into the back half of the year, we expect to build inventory of components for the Gravity SUV program, resulting in an increase in LC and RV impairments from an accounting standpoint, in addition to higher depreciation due to further phase 2 activation is expected to adversely affect cross margin. I mentioned this in my prepared remarks last quarter as well. We have identified additional opportunities in the cost of goods sold and will continue to focus on implementation and further areas for cost out.

Speaker Change: Looking forward to the second quarter of 2024.

Speaker Change: Anticipate gross margin to remain flat despite.

Speaker Change: Our full quarter price adjustment in Q2.

Speaker Change: Sort of half quarter impact in Q1.

Speaker Change: This improvement.

Speaker Change: It's mainly due to further cost optimization initiatives.

Speaker Change: As we move into the back half of the year.

Speaker Change: We expect to build inventory of components for the gravity SUV program.

Speaker Change: Resulting in an increase in LC and RV impairments from an accounting standpoint.

This.

Speaker Change: In addition to higher depreciation due to further phase III activation.

Speaker Change: Expected to adversely affect gross margin.

Speaker Change: I mentioned this in my prepared remarks last quarter as well.

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

Gagan Dhingra: Longer term, our technology will be a key driver of our gross margin. With scale, I believe you will see strong gross margins, with efficiency the key enabler. Now moving to operating expenses, R&D expense in Q1 totaled approximately $284.6 million, up 17.1% sequentially. We expect R&D to increase further as we ramp up the new weekly programs. I think it's widely accepted that Lucid has the best TV technology in the world. SG&A expense in Q1 was approximately $213.2 million, down 11.5% from Q4. The sequential decrease was primarily due to lower sales and marketing expenditure due to seasonality and lower professional services and other general expenses due to continued cost optimization initiatives.

Speaker Change: Lower term.

Speaker Change: Our technology will be key driver of our gross margin.

Speaker Change: With our scale I believe you will see strong gross margins with efficiency the key enabler.

Speaker Change: Now moving to operating expenses.

Speaker Change: R&D expense in Q1 totaled approximately $284 $6 million.

Speaker Change: 17, 1% sequentially.

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

Speaker Change: I think it's widely accepted that lucid has the best technology in the world.

Speaker Change: SG&A expense in Q1 was approximately $213 2 million.

Speaker Change: And down 11, 5% from Q4.

Speaker Change: The sequential decrease.

Speaker Change: Was primarily due to lower sales and marketing spend.

Speaker Change: Seasonality and lower professional services and other general expenses due to continued cost optimization initiatives.

Gagan Dhingra: Although we have identified additional cost-reduction opportunities to execute this year, we expect SG&E to increase primarily due to continued investments in strategic growth initiatives. We ended the first quarter with 50 studios and service centers, excluding our Temporary and Satellite Service Centers.

Speaker Change: Although we have identified additional cost reduction opportunities to execute this year, we expect SG&A to increase primarily due to continued investments.

Speaker Change: In strategic growth initiatives.

Speaker Change: We ended the first quarter with 50 studio and service centers.

Speaker Change: Excluding our temporary satellite service centers.

Gagan Dhingra: Up from 45 in Q4, On the service side, we ended Q1 with 54 mobile vans in the fleet and 93 nationwide-approved body shops. We plan to continue to strategically expand our studio and service center footprint, as well as satellite service centers, which will cost-effectively provide additional locations for Lucid customers, in 2024. We see a pathway to operating leverage, but the key will be driving volumes and scale. Our stock price compensation in the quarter was $63.7 million. Total other income was $49.2 million, down from $83.1 million in Q4.

Speaker Change: Up from 45 in Q4.

Speaker Change: On the service side, we ended Q1 with 54 mobile clients and the fleet and 93 nationwide approved body shops.

Speaker Change: We plan to continue to strategically expand our studio and service center footprint as well as satellite service centers.

Rich.

Speaker Change: Cost effectively toward additional locations for lucid customers.

Speaker Change: In 2024.

Speaker Change: We see a pathway to operating leverage.

Speaker Change: The key will be driving volumes and scale.

Speaker Change: Our stock based compensation in the quarter.

Speaker Change: $63 7 million.

Speaker Change: Total other income was $49 2 million down from $83 1 million in Q4.

Gagan Dhingra: The decrease was primarily attributable to a known cash loss of $19.9 million related to the change in fair value of our equity securities of Aston Martin shares, which we received in Q4 as a part of our strategic technology arrangement. In Q1, we achieved an adjusted EBITDA loss of $598.4 million. A slight improvement from $604.6 million in Q4. Moving to the balance sheet, in Q1. We raised $1 billion through a private placement of convertible preferred stock, to an appellate of the PIF.

Speaker Change: The decrease was primarily attributable to a noncash loss of $19 $9 million.

Speaker Change: Related to the change in fair value of our equity securities of Aston Martin chairs.

Speaker Change: Which we received in Q4 as a part of our strategic technology arrangement.

Speaker Change: In Q1.

Speaker Change: Achieved an adjusted EBITDA loss.

Speaker Change: <unk> hundred $98 4 million.

Speaker Change: A slight improvement.

Speaker Change: From $604 6 million in Q4.

Speaker Change: Moving to the balance sheet.

Speaker Change: In Q1.

Speaker Change: We raised $1 billion private placement of convertible preferred stock.

Speaker Change: To an affiliate of the Pis.

Gagan Dhingra: I would like to echo Peter and thank the PIF for their partnership and their commitment to Lucid and our mission. PIR's partnership and support separates us from others in the industry. We ended the quarter with approximately $4.6 billion in cash, cash equivalents, and investments, with total liquidity of approximately $5.03 billion.

Speaker Change: I would like to Echo Peter and paying the PAA for the partnership and the commitment to lucid and our mission.

<unk> partnership and support separates us from others in the <unk>.

Speaker Change: Industry.

Speaker Change: We ended the quarter with approximately $4 6 billion in cash cash equivalents and investments.

Speaker Change: With total liquidity.

Speaker Change: <unk> five 3 billion.

Gagan Dhingra: Note, this excludes the $60.8 million in value of the Aston Martin shares as of March 31. We have been able to consistently sustain a strong balance sheet over time. And as we have done for the last several years, we will continue to be opportunistic in exploring financing. Turning to inventory, Total inventory decreased 18.8% sequentially, primarily due to further raw material drawdown and lower purchases as we optimize our existing inventory. This is consistent with what I outlined last quarter, where we continue to see a pathway to a significant reduction in raw material on hand. Capital expenditures in Q1 were $198.2 million, down from $272.6 million in Q4.

Speaker Change: Note this excludes the $68 million.

Speaker Change: In value of the <unk> market share as of March 31.

Speaker Change: We have been able to consistently sustain a strong balance sheet over time.

Speaker Change: And as we hadn't done for the last several years.

Speaker Change: We continue to.

Speaker Change: Opportunistic and exploring financing.

Speaker Change: Turning to inventory.

Speaker Change: Total inventory decreased.

Speaker Change: 88% sequentially, primarily due to further raw material drawdown and lower purchases as we optimize our existing inventory.

Speaker Change: This is consistent with what I outlined last quarter, where we continue to see a pathway to a significant reduction in the raw material on hand.

Speaker Change: Capital expenditures in Q1 was $198 2 million down from $272 6 million in Q4.

Gagan Dhingra: Moving to the outlook for 2024, we forecast production of approximately 9000 vehicles in 2024. And we will continue to prudently manage and adjust our production to meet our sales and delivery needs. As Peter mentioned, we are pleased with the demand we are seeing, but I would also remind you that we typically see some seasonality in Saudi Arabia toward the end of the second quarter. With regard to our liquidity position, we ended the quarter with total liquidity of approximately $5.03 billion. We expect this will give us a runway to the start of production of the Gravity SUV program and into the second quarter of 2025. Moving to Kappert.

Speaker Change: Moving to the outlook for 2024.

Speaker Change: We forecast production of approximately 9000 vehicles in 2024.

Speaker Change: And we will continue to prudently manage and adjust our production to meet our sales and delivery teams.

Speaker Change: As Peter mentioned.

Speaker Change: We are pleased with the demand we're seeing.

Speaker Change: Also remind you that.

Speaker Change: We typically see some seasonality in Saudi Arabia towards the end of the second quarter.

With regard to our liquidity position, we ended the quarter with total liquidity of approximately $5 3 billion.

Speaker Change: We expect this will give us run rate toward the start of production of the gravity SUV program.

Speaker Change: And into the second quarter of 2025.

Speaker Change: Moving to Capex.

Gagan Dhingra: We will continue to focus on our future growth initiatives, and we expect capital expenditures for 2024 to be approximately $1.5 billion. This reflects certain deferrals in our capital outlay from last year. The AMP2 Expansion for Completely Built-Up Units, and the Completion of the AMP1 Phase 2 Expansion for Stamping, Pinshop, Powertrain On-Premise, and Body & Wipe for the Gravity SUV program. From a product perspective, We are scheduled for the start of production of the Gravity SUV program in late 2024 and scheduled for the start of production of our high volume midsize platform in late 2026.

Speaker Change: We will continue to focus on our future growth initiatives and we expect capital expenditures for 2020 to be approximately $1 5 billion.

Speaker Change: This reflects certain deferrals in our capital outlay from last year.

Speaker Change: The <unk> expansion for completely built a clinic.

Speaker Change: The completion of the AMCOL phase II expansion first attempting.

Speaker Change: Paint shop.

Speaker Change: <unk> on premise and meridian wide productivity SUV program.

Speaker Change: From a product perspective.

Speaker Change: We are scheduled for startup production of the clarity SUV program in late 2024 and scheduled for start up production of our high volume mid size platform in late 2026.

Gagan Dhingra: Our performance this quarter continues to demonstrate positive momentum. The expansion of our total addressable market, the Pure, and upcoming Gravity FCV and Mid-Site programs provide further opportunities. And I feel very good about our cost optimization strategies and see many opportunities ahead. With that, let me turn it back to Maynard, to get to your questions.

Speaker Change: Our performance this quarter continues to demonstrate the positive momentum.

Speaker Change: The expansion of our total addressable market.

Speaker Change: Pure upcoming.

Speaker Change: Upcoming gravity theory and military programs.

Speaker Change: Provides further opportunities.

And I feel very good.

Speaker Change: About our cost optimization strategies and see many opportunities ahead.

Speaker Change: With that let me turn impactful manner.

Speaker Change: To get to your questions.

Maynard Um: Thanks, Gagan. We'll now start the Q&A portion of the call. Before we take questions from those on the phone, I want to pose some questions that our retail investors sent in to the SAIT technology platform. Our first question is from Anath.

Speaker Change: Thanks, Skagen will now start the Q&A portion of the call before I take questions from those on the phone I want to pose some questions that are retail investors sent into the <unk> technology platform.

Skagen: Our first question is from enough can you elaborate on lucid pathway to profitability what are the key milestones and challenges the company anticipates facing and reducing production costs and achieving positive gross margins.

Maynard Um: Can you elaborate on Lucid's pathway to profitability? What are the key milestones and challenges the company anticipates facing in reducing production costs and achieving positive gross margins? Thank you, Anarth.

Peter Dore Rawlinson: It's all about scale. The more we can scale, the more cars we make, the more volume we can spread, the fixed cost, that's the cost of our investment, our incredible factory and facility, our long-term investments across the sale of each car. So how do we do that? We need to continue the growth of Lucid Air sales right now. And right now, we're trending up 40% from Q1 this year relative to last year. Now, in a similar period, we see the sales of the Tesla Model S down very, very considerably. We're outselling key competitors like Porsche and Taycan. It's about scale.

Skagen: Thank you Manav, it's all about scale.

Speaker Change: We can scale the more costs, we make the more volume we can spread the fixed costs thats. The cost of our investments are incredible factoring facility are long term investments across the sale of each car. So how do we do that we need to continue growth of lucid sales.

Speaker Change: Right now I'm writing.

Speaker Change: We're trending up 40% from Q1 this year.

Relative to last year and on a similar period, we see that.

Speaker Change: Sales of Tesla model S down very very considerably.

Speaker Change: I will just selling key competitive push at point, Kevin It's about scale and the next thing on that on that scale path is to get gravity to production that will have a multiplier effect upon the market size and gravity is schedule to start production late this year and then beyond that we need to get a midsize via.

Peter Dore Rawlinson: And the next thing on that scale path is to get gravity into production, which will have a multiplier effect upon the market size. And gravity is scheduled for start of production late this year. And then beyond that, we need to get our midsize vehicle, our volume vehicle, price it around, we believe about $48,000, get that into production, and it is on schedule for production for late 26. And I've got to tell you just how much our current finances are truly dominated by the major investments that Lucid has made for its future. You know, things like the expansion of our Arizona factory; we've got nearly 4 million square feet in there. The General Assembly is ready. We're putting robots in now for building the body structure for gravity.

Speaker Change: Coal volume vehicle price through round, we believe about $48000 get that into production and is on schedule for production.

Speaker Change: In late 2006, and I've got to tell you just how much our current finances are truly dominated by the major investments to loose it's made for its future.

Speaker Change: Things like the expansion of our Arizona factory, we got nearly 4 million square feet in mass General Assembly is ready with putting the robot seem now full building the body structure for the gravity we've invested in a huge stamping line, we're integrating logistics, we're bringing a powertrain facility.

Peter Dore Rawlinson: We've invested in a huge stamping line. We're integrating logistics. We're bringing a powertrain facility right under that one roof. And that's exactly where we're going to make the units that we supply to Aston Martin, all under one roof. And I think there are some photographs in the presentation, Maynard, and videos on our social media pages.

Speaker Change: Under the one roof and that's exactly where we're going to make the units that we supply to Aston Martin all under one roof and I think there are some photographs in the presentation may not and videos on our social media pages and then the other thing is that the.

Peter Dore Rawlinson: And then the other thing is that, you know, the real big advantage that Lucid's got over everyone else is efficiency. And I don't say that as an engineer. I say that as a businessman. Efficiency means we can make cars with smaller batteries, with fewer batteries than anyone else.

Speaker Change: A real big advantage that lucid Scott over everyone else is efficiency and I don't see that as an engineer I will say that as a businessman. They efficiency means we can make cars with smaller batteries with less factories than anyone else that means because the batteries. The most cost costly part of an EV, we will be able to make cars more cost effective.

Gagan Dhingra: That means because the battery is the most costly part of an EV, we will be able to make cars more cost-effectively and, therefore, with a higher profit margin than anyone else, which leads perfectly to your role, Gagan. Thank you, Peter. And two things more: scale and continuous cost optimization initiatives. With scale, we'll be able to significantly bring down, number one, the fixed cost for vehicles, including depreciation of the investment we made in the factory, which is a big part of our cost of goods sold. Number two, labor and overhead, and you get more efficient when you work at optimal capacity.

Speaker Change: And therefore with more profit margin than anyone else, which leads perfectly to your ROE again, yes. Thank.

Speaker Change: Thank you, Peter and two things more scale and continuous cost optimization initiatives.

Speaker Change: With scale, we'll be able to significantly breakdown number one the fixed cost per vehicle.

Speaker Change: Excluding depreciation of the investment we made in the factory, which is a big part of our cost of goods sold.

Speaker Change: Number two labor and overhead.

Speaker Change: You get more efficient when you look at the optimum capacity.

Gagan Dhingra: Number three, also the bomb cost, as volume provides significant cost leverage. Now, let me add to the cost optimization initiatives that we've been working on very aggressively, and I'm personally leading this on a daily basis with great support from Peter. As I said in the prepared remarks, we were able to reduce the bill of materials, which is the cost of the parts that go into a car, and also logistics costs significantly this quarter. We have also identified additional opportunities to execute throughout the year. Thank you. Thanks.

Number three also the bond costs as volume provides us significant cost leverage.

Speaker Change: Now, let me add too.

Speaker Change: Cost optimization initiatives that we've been working very aggressively.

Speaker Change: Personally leading this on a daily basis with big support from Peter.

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

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

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

Speaker Change: Yes.

Speaker Change: Thanks. Our next question is from the platform is Jason the stock price keeps dropping what measures will you be employing to bring the price up considerably. It seems product output is extremely low well thanks, Jason.

Maynard Um: Oh, thanks, Jason. Now, look, I share price again. Again, it's all about volume.

Speaker Change: Share price again, it's again, it's all about volume so forgive me because the share price and the path to profitability are interwoven.

Peter Dore Rawlinson: So forgive me because the share price and the path to profitability are interwoven. You know, against a broader EV market where other makers' products are really down, we're up 40% on deliveries year on year. We're bucking that trend. It's all about scale.

Speaker Change: Against our broader EV market, where other automakers product so really down were up 40% on deliveries year on year. We are bucking that trend. It's all about scale. It's about recognition on the brand and I believe we are getting there.

Peter Dore Rawlinson: It's about recognition for the brand, and I believe we're getting there. You know, and we've got gravity coming. Just to put this in perspective, in Q1, for the first time ever, Lucid outsold Porsche Taycan.

Speaker Change: And we've got gravity coming just just just to put this in perspective in Q1 for the first time ever lucid ounce sold who should tie Kim.

Peter Dore Rawlinson: We've outsold the Mercedes-Benz EQE for the third consecutive quarter. And we've outsold the Mercedes-Benz EQS as well for the third consecutive quarter. We've outsold the new BMW i7, and we've outsold the Audi e-tron GT for the fifth consecutive quarter. You know, I want to also explain another matter here. We're not manufacturing constrained. This isn't a ramp-up situation.

Speaker Change: Now sold a Mercedes Benz Z Kiwi for the third consecutive quarter, we've outsold the Mercedes Benz EQ U S as well for third consecutive quarter, we've sold the new BMW only seven and we've outsold the Audi E Tron GT for the fifth consecutive quarter.

Speaker Change: I want to also explain another matter here.

Speaker Change: Manufacturing constraint decision to ramp up situations. We can link for me, it's very much an economy situation. It's about growing awareness such as the product is and the sales will follow and that's that's the trajectory. We're on it's all about these sales and volumes.

Peter Dore Rawlinson: We can make them. It's very much an economic situation. It's about growing awareness of just how awesome the product is, and sales will follow. And that's the trajectory we're on. It's all about these sales and volumes. And I also want to just put, as a final point, I would like to put, you know, Lucid's stock price in context for this year. Just for context, Tesla's down about 25.6%, Rivian's down about 56%, and we're down 27%, so really, there is a trend here in this sector, but clearly, we've got a path to get out of it. Gagan, do you want to add some color?

Speaker Change: I also want to just put a final point I would like to put it.

Speaker Change: <unk> stock price in context for this year just for context test was down about 25, 6% museums down about 56% were down 27%. So really there is a trend here in this sector.

Speaker Change: Right.

Speaker Change: Clearly, we've got a path to get out of it.

Speaker Change: Ken can do you want to add some color yes. Thank you Peter.

Gagan Dhingra: Yeah, thank you, Peter. And again, you know, we are also very focused on execution and optimization of cost. We have the most efficient regal, but it's not just about the sustainability story. It's about growth, it's about scale, and it's about profitability. I expect it will show in our margins over time as we scale. Thanks. The third question is from Justin.

Ken: Again, we are also very focused on execution and optimization of cost.

Ken: The most efficient vehicle.

Ken: It's not just about the sustainability story, it's about growth, it's about scale and it's about the profitability.

Ken: I expect it will show in our margins over time as we scale.

Ken: The third question is from Justin as lucid in talks with any of the legacy automakers to provide battery of motors for production.

Maynard Um: Is Lucid in talks with any of the legacy automakers to provide the battery or motors for production? Thanks, Justin. Thanks for the question. You know, I can't emphasize enough how this is absolutely central to the whole vision of the company. And that's why we're called Lucid Group.

Ken: Justin Thanks for the question I can't emphasize enough.

Is absolutely central to the whole vision of the company and Thats one of the cool Lucy group.

Peter Dore Rawlinson: You know, the vision is to have a meaningful impact upon the planet, upon the environment, to take technological leadership and to use that leadership so that we can travel further with less and be truly sustainable, and then to share that technology and provide that technology to other companies. And we've taken the first step; we've provided the Sapphire technology, a hypercar technology, to no less than Aston Martin. And there's a timescale associated with this, you know. I mean, you know, the technology that we've got in our current lineup of Touring and Grand Touring was ideally suited to a luxury performance car from another automaker.

Justin: The vision is to have a meaningful impact upon the planet upon the environment to tight technological leadership and to use that leadership that we can travel further with less and they truly sustainable and then to share that technology and provide that technology to other companies and.

Justin: We've taken the first step we've.

Justin: Providing the Sapphire technology, our Hypersound technology to no less than Aston Martin and then there's a time scale associated with this you know.

Justin: The technology that we've got in our current lineup of touring Grand touring with ideally suited to a luxury performance comp from another automaker, but what really excites me is the.

Peter Dore Rawlinson: But what really excites me is the potential for the technology that we're currently developing right here in this building at Lucid headquarters, where I speak for our midsize tech platform. This is the tech that really is going to suit a high-volume family car of the future.

Justin: The potential for the technology that we're currently developing right here in this building illicit headquarters where I speak for mid sized platform. This is the tank that really is going to suit, our Hawaii volume family car of the future and that's why that's what's <unk>.

Peter Dore Rawlinson: And that's what's going to create the multiplier effect. So, as you can see, we can't really talk about specifics. But, indeed, we are in talks with large OEMs that appreciate the value of our tech. And they are certainly interested in working together with us. Gagan, would you like to add anything to that? And, of course, under the right conditions?

To create the multiplier effect so.

Justin: As you can appreciate we can't really talk about specifics, but indeed, we are in talks there are large Oems that appreciate the value of our tech and they are certainly interested in working together with US again again would you like to add anything to that and of course under the right economics as.

Gagan Dhingra: Absolutely. And I think therein lies another misunderstanding. Because of our current finances, there's this myth, this complete misinformation, that our tech is so expensive. And it's completely the opposite.

Speaker Change: And I think there in lies another misunderstanding because of our current finances does this meet this is complete misinformation about our tech is so expensive and it's completely the opposite I I'll attack is made for food ability at scale H designed around.

Gagan Dhingra: Our tech is made for affordability at scale. It's designed around reducing the need for batteries, which is the biggest cost item of making an EV. So actually, adopting Lucid's technology is a route to significantly reducing the cost of making an EV. And this is simply just not sufficiently appreciated.

Speaker Change: Round.

Speaker Change: You seem to need for battery, which is the biggest cost item or.

Speaker Change: Making an EV, so actually adopting new technology is a route to significantly reducing the cost of making an EV and this is simply just not sufficiently appreciated.

Maynard Um: Oh, we're understood. Great. And our last question is from Robert. Will Lucid make an affordable car to compete with Tesla? Well, I've got an answer to that.

Speaker Change: So remember soon.

Speaker Change: Great and our last question is from Robert will lucid make an affordable car to compete with Tesla.

Peter Dore Rawlinson: We already are. The Lucid Air Pure rear-wheel drive, the finest machine on the planet, $69,900, the price I promised back in September 2020. We're already competing with Tesla. But wait till Unmidsized comes out late 26.

Speaker Change: Well I've got a.

Speaker Change: One answer to that we already are.

Speaker Change: The elusive.

Speaker Change: Railroad drive finance machine on the planet 69900, the price I promised back in September 2020, we're already competing with Tesla, but.

Speaker Change: Wait till a midsized comes out late 'twenty six that's all going to have.

Speaker Change: 4800, $50000 and that is the big one the one that's going to be really exciting.

Operator: Yes, thank you. Please stand by. Our first question comes from the line of Adam Jonas. Your line is open. Hey, uh, everybody.

Speaker Change: Great now, we'd like to take questions from the phone lines to wonder can we take the first question. Please.

Speaker Change: Yes. Thank you.

Speaker Change: Please standby.

Speaker Change: Our first question.

Speaker Change: Comes from the line of Adam Jonas.

Adam Jonas: Your line is open.

Adam Jonas: Yes.

Adam Michael Jonas: Hi Peter. You said in your, um, prepared remarks and in the statement that you published that sales momentum is building. Can you quantify what supports that statement and over what period was it measured?

Adam Jonas: Hi, everybody Hi, Peter you said in your prepared.

Adam Jonas: <unk> is an understatement.

Adam Jonas: Sales momentum is building.

Speaker Change: Can you quantify what supports that statement and over what period. It wasn't measured where are you where are you talking year on year or youre talking about momentum building kind of more during the quarter and sequentially.

Peter Dore Rawlinson: Were you talking year-on-year, or were you talking about momentum building kind of more during the quarter and sequentially? Okay, yes. Hi Adam.

Peter Dore Rawlinson: So if we look at 2023 versus 22, I believe we were up by 37%, or close to 37% on memory. And if you compare Q1 24 to Q1 23, that's where we had the 39.9%, very, very close to 40% growth. So we're bucking the trend of the market quite nicely. Okay, and this is a follow-up. You said that your focus remains on cost or relentless attention to cost, and you mentioned some big improvements this quarter on bomb costs specifically. Can you give some examples of this improvement in bomb costs within the quarter, and who are you benchmarking for the bomb cost for the gravity?

Okay, Yes, hi, Adam So if we look at 2023 versus 22, I believe we were up.

Speaker Change: 37% or close to 37% on memory and if you compare Q1 'twenty four to Q1 'twenty three that's where we had the 39, 9% very very close to 40% growth. So we're bucking the trend of the market quite nicely.

Speaker Change: Okay.

Speaker Change: And just as a follow up you said that your focus remains on cost our relentless attention to cost and you mentioned some big improvements.

Speaker Change: Quarter on Bom costs, specifically can you give some examples.

Speaker Change: This improvement and bomb.

Speaker Change: Within the quarter and who are you benchmarking for the bomb cost for the gravity. Thank you.

Gagan Dhingra: Thank you. Adam, thank you for your question. So yes, in this quarter, despite the pricing actions, our gross margin improved, and it's mainly due to cost optimization initiatives, including bomb cost reduction. And within bomb cost, there are various components, and we are working hard with both the supplier side of things and internally, and internally more on the technology side of things, where we are bringing the battery cost down, so our car is the lowest in the per vehicle range.

Speaker Change: Adam. Thank you for your question. So yes in this quarter. Despite the pricing actions, our gross margin improved and is mainly due to cost optimization initiatives, including bump cost reduction and within bump cost there are various components and.

Speaker Change: We are working hard with both the supplier side of things and internally and internally more on the technology side of it where we are bringing.

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

Speaker Change: The battery cost down our car is the lowest per vehicle range.

Speaker Change: But also then on the logistics side of it.

Speaker Change: We are able to bring our cost down significantly quarter over quarter and in addition, we identified a few other initiatives that we want to execute throughout the year.

Speaker Change: We're also managing our inventory very effectively.

Speaker Change: <unk> helps bringing the cost down.

Speaker Change: Okay.

Operator: We'll take our next question, Tawanda. Please stand by for our next question. Our next question comes from the line of John Murphy with Banks America. Your line is open. Good evening, everybody.

Speaker Change: Great. We will take our next question Joana. Please standby for our next question.

Joana: Our next question comes from the line of John Murphy with Bank of America. Your line is open.

John Murphy: Peter, I don't necessarily mean to conflate the company that started with Tesla for many reasons. But I mean, as we look at the S and X, the company was struggling, and it wasn't until the three and the Y launch that there was kind of an escape velocity from self-funding. And it seems like, you know, we're looking at sort of a somewhat of a parallel here. And I don't mean to make an explicit direct comparison, but it does seem like the, um, space or the smaller vehicle launching in late 26 will be sort of where you potentially reach that escape velocity, similar to when they hit the three and the Y.

John Murphy: Good evening everybody.

John Murphy: Peter.

I don't want me to conflate the company necessarily with Tesla.

John Murphy: For many reasons, but as we look at the <unk>.

John Murphy: The company was struggling and it wasn't until the three and Y launch that there was kind of escape velocity on self funding and it seems like.

John Murphy: We're looking at sort of somewhat of a parallel here when I don't mean to them.

John Murphy: Do you make it explicit direct comparison, but it does seem like the.

John Murphy: The space or the smaller vehicle launching in late 2006 will be sort of where you could potentially reach that escape velocity similar to when they hit the three in Hawaii. So I was wondering if you would maybe kind of concur with that.

Peter Dore Rawlinson: So I was wondering if you would maybe kind of concur with that to some degree, right? I hope you don't take offense to that, but to some degree, and then also, as we think about that, we're seeing sort of these dribs and drabs, and I wouldn't say, you know, a billion dollars is a drib and a drab. It's a lot of money, but, you know, sort of this question from investors. Will you be able to get the funding sort of guaranteed to get to the launch of that escape velocity, or maybe it's space, in 2026? So I mean, one, do you kind of agree with her that logic that that's when you reach escape velocity?

Speaker Change: To some degree right I hope you don't take offense to that but to some degree and then also as we think about that.

Speaker Change: We're seeing sort of these dribs and drabs I wouldn't say $1 billion is attributed DRAM, it's a lot of money, but youll sort of this question from investors.

Speaker Change: <unk> be able to get the funding sort of guaranteed to get to the launch of that escape velocity or maybe it's the space.

Speaker Change: In 2026, so I mean, one do you kind of agree with her that logically. That's when you reach escape velocity and will you have the funding to get there.

Peter Dore Rawlinson: Thank you, John. An interesting parallel and a very thoughtful question from you, as always. I mean, look, the vision is to get to very significant volume, and clearly, that comes in two steps. Well, there are three steps. First of all, scale M with brand awareness. Step two, go for about six times the time with gravity.

Thank you John an interesting parallel in a very thoughtful question from you as always.

Speaker Change: I mean look.

Speaker Change: The vision is to get to very significant volume.

Speaker Change: And clearly that comes in two steps.

Speaker Change: There are three steps first of all scale ammo with brand awareness step to go for about six times, the Tam with gravity and I really believe there is a very big significant.

Speaker Change: Opportunity with gravity the model X didn't capture because model X was a big kind of like a bit <unk> gravity is a proper SUV and it's a seven seat three row and we've got this unique secret weapon that we can go further with less battery and address the critical.

Peter Dore Rawlinson: And I really believe there's a very big, significant opportunity with Gravity that Model X didn't capture, because Model X was a bit car-like, a bit CUV-like, whereas Gravity is a proper SUV, and it's a seven-seat, three-row. And we've got this unique secret weapon that we can go further with less battery and address the critical cost of making these products, which you'll see unfold as we get to a degree of scale which gravity will enable. They are incentivized for our success. We are mutually incentivized for success. Nothing less than success is acceptable here. Okay, that's incredibly helpful.

Speaker Change: Of making these products and which you'll see.

Speaker Change: Yes.

Speaker Change: Fold as we get to a degree of scale, which gravity will enable but it's true to say that we were <unk>.

Speaker Change: Food bat full fruition of all that until we get the mid sized platform into production and its schedule pool started production late 'twenty six now regarding our partnership will really make sense as lucid apart is the combination of two things a unique world class technology combined with.

Speaker Change: Our special relationship with the Pis and that relationship with the <unk> App.

Speaker Change: <unk> are nearly financial one because they're invested in us.

Speaker Change: Stone of transitioning the economy of Saudi Arabia to our sustainability model with their audacious vision 2030, and they are.

Speaker Change: We are in this together, they're equally incentivized for success right now running in Saudi Arabia is the first car plant they've ever had operating in its elusive plants right now we're laying the foundations literally pouring the concrete.

Speaker Change: Complete business unit, our CPU factory, which is schedule to sync with the advent of the arrival of the mid sized Z in Saudi Arabia. They are incentivized for success, we are mutually incentivized for success nothing less than <unk> is.

Speaker Change: Acceptable here.

Peter Dore Rawlinson: Just one second, follow up. 9,000 vehicles produced or airs produced this year. You've already delivered more than you produced. I think there are, you know, well over 5,000 units, or I think there are over 5,000 units in inventory. Could we see deliveries significantly above that 9,000 production number? I think you did 239 deliveries greater than production this quarter. Should we expect something similar to that to go through the rest of the year, or could it actually be higher? Well, we haven't ruled that out. Naturally, I'd love to see it.

Speaker Change: Okay. That's very helpful. Just one second follow up.

9000 vehicles produced <unk> produced this year you.

Speaker Change: Youre already delivered more than you produced I think there as well.

Speaker Change: Well over 5000 units or <unk>.

Speaker Change: I think there are over 5000 units.

Speaker Change: Inventory could we see deliveries significantly above that 9000 production number I think you did $2 39 deliveries greater than production. This quarter should we expect something similar that go through the rest of the quarter of the year.

Peter Dore Rawlinson: What is crucial here is the key message that management is taking prudent steps in balancing production with delivery so that we don't get an undue amount of inventory and have that working capital tied up. This is prudence from management. Thanks, Tawanda.

Speaker Change: Higher well we.

Haven't guided on that naturally I'd love to see it what is crucial here is the key messages that management is taking prudent steps in balancing.

Speaker Change: Net production with delivery, so that we don't get an undue amount of inventory and have that working capital tied up this is prudent from management.

Operator: We'll take our next question, please. Our next question comes from the line of Itay Michaeli of City, Yolanda. Ah, great, thanks, uh, hi everyone. Um, just two questions for me.

Speaker Change: Thanks to our now we will take our next question. Please.

Speaker Change: Our next question comes from the line of.

Speaker Change: Hey, Michael.

Michael: With Citi. Your line is open.

Itay Michaeli: First, Peter, can you just give us an update on kind of supplier readiness for the gravity launch, you know, what the progress you're making there, and just how you're feeling about that? And then maybe a second question, just going back to the gross margin. I know there's a lot of noise in that number. I was hoping you could talk a little bit about what you're seeing across trends for kind of variable, you know, margins to just kind of looking at parts, material, freight, and warranty, excluding kind of labor and overhead costs.

Michael: Great. Thanks, Hi, everyone.

Michael: Just two questions from me Peter can you just give us an update on <unk>.

Michael: Supplier readiness for the gravity launch and what was the progress Youre, making there.

Michael: Over how youre feeling about that and then maybe a second question just going back to the gross margin. There's a lot of noise in that number I was hoping you could talk a little bit to what youre seeing.

Cross trends for kind of variable margins, just kind of looking at parts material freight and warranty excluding kind of labor and overhead cost. If you can give us a little bit of sense of how that's trending that would be helpful. Too. Thank you.

Itay Michaeli: If you can give us a little bit of a sense of how that's trending, that would be helpful, too. Thank you. Thanks, Itay. Yeah, so I'm personally overseeing the march towards the gravity start of production. Literally, in this room every morning, my morning starts with a review of the status.

Speaker Change: Thanks, Jose yes so.

Jose: I'm personally.

Jose: Overseeing the March towards the gravity start of production are literally in this room every morning. My mind My morning starts with a review of the status and in order to ready the program, we need to sync spree activity streams, the readiness of the gravity product the readiness of the fab.

Jose: Tree, Arizona factory, and the build out of that and the installation of all equipments and the third thing you cover. Your question was the the readiness of the supply base and absolutely. We're all over this we have literally a few hundred suppliers with thousands of parts truly draw from some of.

Peter Dore Rawlinson: We have literally a few hundred suppliers with thousands of parts, truly drawn from some of the best suppliers right around the world. And that is something we're managing very closely. And to that end, I want this process to be really super transparent.

The best suppliers right round, the world and that is.

Jose: Something we're managing very closely and to that aim I want this process to be really super transparent. So I personally commission the team to make a series of videos, which will tell the tale, but everybody is following the company the path to gravity the road to gravity to series as we launched that just.

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

Jose: Last week, and Thats going to Chris those three connect.

Jose: Connecting our pillars, the product the factory readiness and supply chain readiness, but we've got a major advantage at this time with this productivity because we're not trying to do it coming out of a pandemic. So there should be a lot more opportunity for us to do SQL.

Peter Dore Rawlinson: So there should be a lot more opportunity for us to do SQA, which is supplier quality awareness and audit. And we have our supplier quality engineering teams visiting those suppliers and checking, verifying, and validating the readiness for start-up production late this year. Now, regarding margins, I would like to defer the question to Gagan, please. Yeah, thanks, Peter. So, Itay, on the gross margin, we have been working very hard with both the supplier side of things and then taking costs out of the business. And, you know, looking at the bomb cost first, it is a significant effort.

Jose: Which is supplier quality awareness audits.

We have a supplier quality engineering teams visiting those suppliers and checking and verifying and validating their readiness who started production late this year now regarding margins I would like to add.

Speaker Change: Further question too.

Speaker Change: To gag and please yes, thanks Peter.

Speaker Change: On the gross margin, we have been working very hard with both the supplier side of things and then taking cost out of the business.

Speaker Change: Looking at the bond costs first.

Speaker Change: <unk> is a significant effort we are continuously bringing.

Speaker Change: <unk> of dollars out from the cost.

Gagan Dhingra: We are continuously bringing thousands of dollars out of the cost. But one thing this quarter specifically, I want to talk about technology. Our car also has the lowest cost of ownership.

Speaker Change: One thing this quarter, specifically I want to call about technology.

Speaker Change: Our car also has the lowest cost of ownership and if you look at in the Investor deck, we added slides seven and slide eight explaining how our card has a lowest cost and.

Gagan Dhingra: And if you look at the investor deck, we added slides seven and eight, explaining how our car has the lowest cost. And it will be good for you to look at that. And then in parallel, you know, our cost optimization team, this team is challenging each and every one and also for every dollar value. And I'm personally leading this initiative with support from Peter. But what does that mean to us?

Speaker Change: It could be good for you to look at that and.

Speaker Change: And then in parallel.

Speaker Change: The cost optimization team.

Speaker Change: This team is challenging each and everyone and also for every dollar value and I am personally leading this initiative with support from Tito.

Speaker Change: What does that mean to us we are able to significantly bring the logistic cost down.

Gagan Dhingra: We're able to significantly bring the logistics cost down. We are looking more and more opportunities. Now, it's a matter of scale because we are spending a significant amount of money on the fixed cost. Even on the variable cost, we identify more opportunities, and it will help us because, from the suppliers' perspective also, they also allocate their fixed overhead to the volume they deliver. But we have our part to go there.

Speaker Change: Looking more and more opportunities now it's a matter of scale because today are spending significant amounts of money on the fixed cost.

Speaker Change: Even on the variable costs, we identified more of which entities and it will help us because look at from suppliers perspective also they're also allocate their fix.

Speaker Change: Fixed overhead to the volume that deliver but we have got to go there and with gravity coming late 'twenty 'twenty, four we're getting closer and closer to our capacity and that will give us an uplift operation operating leverage.

Gagan Dhingra: And with gravity coming late 2024, we're getting closer and closer to our capacity, and that will give us enough operating leverage. Thanks, Tawanda.

Operator: Can we move to our next question? Thank you. Our next question comes from the line of Andres Sheppard with Canna Fitzgerald. The line is open.

Speaker Change: Thanks, Melinda can we move to our next question. Thank you. Our next question comes from the line of Andrew Shepherd with Cantor Fitzgerald. Your line is open.

Andres Juan Sheppard: Hey, everyone. Good afternoon. Congratulations on the quarter and thanks for taking our question. Um, Peter, I was just wanting to follow up on maybe deliveries to Saudi Arabia. Try to get a sense if it's possible to maybe quantify it a little bit as to how that agreement will develop, you know, later this year, next year and onwards. I think in the past, you had mentioned that, uh... Please correct me if I'm wrong, but a lot of these deliveries, which would include the gravity and the midsize high volume model, have yet to reach their SOP. So I was just wondering.

Andres Sheppard: Hey, everyone. Good afternoon, congratulations on the quarter and thanks for taking our question.

Andres Sheppard: Peter I was just I wanted to follow up on maybe deliveries to Saudi Arabia.

Andres Sheppard: Trying to get a sense is it possible to maybe quantify it a little bit as to how that agreement will develop later this year next year and onwards.

Peter Robinson: I think in the past.

Peter Robinson: You had mentioned that.

Please correct me, if I'm wrong, but that a lot of these deliveries will include the gravity and the midsize high volume model, which have yet to reach their <unk>. So just wondering.

Peter Dore Rawlinson: You know, are we able to quantify what these deliveries to Saudi Arabia will be this year, next year, as you work your way up to the gravity? Yeah, yeah, we're not planning to guide on the split in the future, but our deliveries in Q1 exceeded 500 units. Uh, uh, I-I-I-I- I mean, I'm very confident that we've got equal demand for our products in Saudi Arabia, particularly for the SUV. That's going to be quite an interesting market. But again, I'm not in a position to guide right now on these, and we haven't decided yet whether we'd guide on that specific split either, Andrew. Okay, I got it.

Peter Robinson: Are we able to quantify what these deliveries to Saudi Arabia will be this year next year as you work your way up to the gravity and yes.

Right.

Speaker Change: We're not planning to guide on the split in the future.

Speaker Change: Huge.

Speaker Change: But our deliveries in Q1 exceeded.

Speaker Change: 500 units.

Speaker Change: Uh huh.

Speaker Change: I mean, I'm very confident that we've got equal demand for for our products in Saudi particularly for the SUV.

Speaker Change: It's going to be quite an interesting market.

Speaker Change: But again.

Speaker Change: Im not in a position to guide right now on these.

Speaker Change: And we haven't decided yet with regard on that specific splits either Andrew.

Peter Dore Rawlinson: That's a whole lot. So over 500 deliveries into one were to Saudi Arabia. So that's helpful. Okay. And then just a question on liquidity. You know, you touched on the updated liquidity, obviously, the $1 billion Capital Race fortifies the balance sheet. In your presentation, you mentioned that liquidity on hand is sufficient to fund the business until the second quarter of next year.

Andres Sheppard: Okay got it that's helpful. But it's over 500 deliveries in Q1 award to Saudi Arabia.

Andres Sheppard: Yes.

Andres Sheppard: That's helpful. Okay.

Andres Sheppard: And then just a question on <unk>.

Andres Sheppard: Liquidity.

Andres Sheppard: You touched on.

Andres Sheppard: The updated liquidity, obviously, the $1 billion recent capital raised fortify the balance sheet in your presentation. You mentioned that liquidity on hand is sufficient to fund the business I believe it until second quarter of next year. So I guess my question is.

Peter Dore Rawlinson: So I guess my question is, you know, as you think about your next capital race, do you, to the extent of the ability you can answer, foresee that coming from the PIF, or perhaps would that be from external capital? I guess what I'm asking is, with $6.4 billion in funding from the PIF so far this year to date, do you foresee a situation where the next race may also be with them or elsewhere? Thank you. Well, look, we're a technology company. We're on a growth trajectory, and it's a capital-intensive endeavor. We know that

Andres Sheppard: As Youre thinking.

Andres Sheppard: Your next capital raise do you.

Andres Sheppard: To the extent of the ability you can answer do you foresee that coming from from the Pis or perhaps with Abbvie from external capital I guess, what I'm asking is with $6 4 billion in funding from the Pis, so far year to date.

Andres Sheppard: See situations, where the next race may also be with them or elsewhere. Thank you.

Speaker Change: We'll look at.

Speaker Change: Our technology company, we're on a growth trajectory and it's a capital intensive endeavor, we noted that and so all I can I can say is that we will take an entrepreneurial opportunistic view of raising capital when the business requires it we.

Peter Dore Rawlinson: And so all I can say is that we will take an entrepreneurial, opportunistic view of raising capital when the business requires it. We are very, very aware and appreciative of the very special relationship and the steadfast support that the Public Investment Fund has shown us and gone to every single round to support us to date. And I think that puts us in a very strong position. It takes us past the start of production of Gravity and well into next year. And I think that's an enviable position.

Speaker Change: Very very.

Speaker Change: Im aware and appreciative of the very special relationship.

Speaker Change: And the steadfast support that the public investment fund has shown us and gone every single round.

Speaker Change: <unk> to date, and I think that puts us in a very strong position. It takes us past the start of production of gravity and well into next year and I think that's an enviable position it puts us in a very strong.

Peter Dore Rawlinson: It puts us in a very strong position financially. Thanks, Tawanda. Can we move to the next question, please? Our next question comes from a line from Tobias Beith with Redburn Atlantic. Your line is open. Hi, good evening, and thanks for your time. I have two questions for Gagan.

Speaker Change: Position financially.

Speaker Change: Thanks, Tom can we move to the next question. Please.

Speaker Change: Our next question comes from the line of Tobias Beth with the waiver on Atlantic Your line is open.

Tobias Beith: Hi, good evening and thanks for your time I have two questions, please and I'll ask them separately.

Operator: I'll ask them separately. Through 2024, the expectation is that production processes will become more vertically integrated as you continue to build out the Phase 2 expansion of AMP1. Can you confirm whether this will increase losses in the near term while volumes are subscaled? Yeah, so as I said in the prepared remarks, we typically don't guide gross margin because of certain controllable and non-controllable factors. However, I can provide some directional color.

Tobias Beith: Through 2024.

The expectation is that production processes will become more vertically integrated as you continue to build out the phase two expansion of implant.

Tobias Beith: Can you confirm what the increased losses in the near term while volumes are subscale.

Speaker Change: Yes, so as I said in.

Speaker Change: The prepared remarks, we typically don't guide gross margin because of certain controllable and non controllable factors.

Speaker Change: Our.

Speaker Change: I can forward some directional color.

Speaker Change: In Q2.

Tobias Beith: In Q2, I expect that gross margin will remain flat despite the impact, the full quarter impact of pricing actions we took in Q1. In Q1, the impact was only for part of the quarter. Scaling back to the second half of the year, now purchasing gravity components ahead of production, which will result in an increase in inventory, i.e., result in LCNRV, and also higher depreciation as a result of phase two activation, we expect to have some negative impact on the gross margin.

Speaker Change: I expect that gross margin will remain flat.

Speaker Change: Despite the impact the <unk>.

Speaker Change: Full quarter impact of pricing actions, we took in Q1 in Q1, the impact of asphalt part of the quarter.

Speaker Change: Scaling back the second half of the year now, but case of gravity components ahead of production.

Speaker Change: Which will result in increase in inventory a result in <unk> and also higher depreciation as a result of phase two activation, we expect to have some negative impact on the gross margin, but then we have a great day scheduled for production late this year as we move to next year we.

Tobias Beith: But then, you know, we have gravity scheduled for production late this year. As we move to next year, we expect things to change significantly. Okay, but, sorry, just to ask my question slightly differently. On a variable margin basis, do expect higher vertical integration. Decrease the Variable Mod, on both air and gravity.

Speaker Change: Expect things to change significantly.

Speaker Change: Okay, but sorry, just to ask my question slightly differently on a variable margin basis do you expect the highest vertical integration to decrease the variable margins in the near term.

Speaker Change: On both and gravity.

Gagan Dhingra: Yeah, that's a great question. Now, it is a game of scale. We're getting better on contribution margin, trim by trim. Now, the bomb cost, freight, and certain overhead. Part of contribution margin gets significantly impacted when you have a low volume, and with scale, it significantly improves because suppliers also amortize their fixed costs based on the volume they deliver. It's a matter of scale. The more we get close to our capacity, our margins get much better. Okay, I understand. And then.

Speaker Change: Yes, that's a great question now it is a game of scale.

Speaker Change: We're getting better on contribution margin Trimble trim.

Speaker Change: Now the Bom cost freight and certain overhead.

Speaker Change: A lot of contribution margin get significantly impacted when you have a low volume.

Speaker Change: And with scale it significantly improves.

Speaker Change: Nickel suppliers also amortize the fixed cost based on the volume they deliver.

Speaker Change: It's a matter of scale.

Speaker Change: The more we get close to our capacity our margins got much better.

Speaker Change: Okay understood and then.

Gagan Dhingra: Just to return to the question that Adam and Itay asked, if I exclude the impairment charge from your cost of goods sold and make a simplistic assumption that all of the DNA charge is within COGS, then in the first quarter of this year, underlying costs per unit delivered actually increased 5% sequentially. And given that delivery volume was 13% higher, with some of these cars presumably benefiting from last year's overproduction. I was wondering if you could comment on what happens. Yeah, it is; it is a factor of incentive as well.

Speaker Change: Just to turn back to the question that at the minute towns asked.

If I exclude the impairment charge from your cost of goods sold and make a simplistic assumption that all of the D&A charges within Cogs than in the first quarter. This year underlying cost per units delivered actually increased 5% sequentially.

Speaker Change: And given the delivery volume was 13% higher.

Some of these costs, presumably benefiting from last year silver production I was wondering if you could comment on what happened.

Gagan Dhingra: So if you look at, we took some pricing actions in the current quarter. So it's because of the pricing actions, which were largely offset by the cost reduction in activity. Okay, but the, sorry, the pricing acts... Surely they're not in your cogs anymore because I've excluded the impairment chart.

Speaker Change: Yes. It is it is a factor of incentive as well. So if you look at what took some pricing actions in the current quarter.

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

Speaker Change: Okay Alright.

Speaker Change: Alright.

Speaker Change: Injections.

Speaker Change: Surely there or not in your Cogs anymore, because I've excluded the impairment charge.

Gagan Dhingra: Yes, but you know, there are multiple things that go into that factor. So when we say pricing actions, we basically, like for Pure and Turing, the pricing that we offered, and plus Mix, both together play a significant role in that component. Alright, this has been most helpful. Thank you very much.

Speaker Change: Yes, but it's.

Speaker Change: It's multiple things that go in that sector. So when we say pricing actions.

Speaker Change: We basically.

Speaker Change: Our like for pure and touring.

Speaker Change: Pricing that we offered.

Speaker Change: Plus mix, both together play a significant role in that component.

Speaker Change: Alright. This has been most helpful. Thank you very much for your time.

Operator: Thanks, Tawana. Can we move to the next question, please? Our next question comes from the line of Stephen Fox with Fox Advisors. Your line is open. Hi, thanks for all the color this evening.

Speaker Change: Thanks, Toni can we move to the next question. Please.

Toni: Our next question comes from the line of Steven Fox with Fox Advisors. Your line is open.

Steven Fox: I just had a question on the push to have more third-party related sales of hardware and software. I guess I was wondering if, over the last few quarters, there's been an increasing number of bottlenecks and getting to the finish line on some of these deals. I'm curious, just because it seems like you've proven out some cost advantages that you can provide as a third party from a third party standpoint, and the pressures on OEMs to get their bomb costs down have only increased in the last, you know, year to date.

Steven Fox: Hi, Thanks for all the color. This evening I just had a question on.

The push to have more third party related sales of hardware and software.

Steven Fox: I guess I was wondering if you would say over the last few quarters, whether there's been an increasing number of bottlenecks and getting to the finish line on some of these deals.

Steven Fox: I'm curious just because it seems like you've proven out some cost advantages that you can provide as a third from a third party standpoint, and the pressures on Oems to get their bom costs down if only increase in Alaska.

Steven Fox: Year to date.

Steven Fox: Any color on that and your progress going forward would be helpful.

Steven Fox: Any color on that and your progress going forward would be helpful. That's an interesting point, Steve. I would say this: there's a timescale, there's a cadence, there's a chronology associated with any such arrangement with a traditional OE.

Steven Fox: Okay.

Speaker Change: It's an interesting point.

Speaker Change: I would say this that these there is a ton scale was the cadence because a chronology associated with any such arrangement with the traditional <unk>.

Peter Dore Rawlinson: There's a natural cadence to the place they work and operate. And also, there's this sort of impending regulatory overhang in terms of the drivers for their transition to sustainable mobility. So all I can say is just watch this space. We need patience when we're talking to large automakers. Okay, thank you very much.

Speaker Change: There is a natural cadence to the pace, they work and operate and own so.

Does this sort of impending regulatory overhang in terms of the drivers for that transition to sustainable mobility model. So all I can say is just watch this space, we need patience when we're talking to launch automakers.

Speaker Change: Okay. Thank you very much.

Operator: Please stand by for our next question. Our next question comes from the line of James Picariello with BNP Paribus. Your line is open. Hey everyone, this is Jake on behalf of James.

Speaker Change: Please standby for any questions.

Speaker Change: Our next question comes from the line of James <unk> with BNP Paribas. Your line is open.

Speaker Change: Hello, everyone. This is Jake on for James.

James Picariello: Uh, so if I just look at your liquidity and the implied cash burn with the $5 billion last... second quarter of 2025. It looks like the implied cash burn has stepped up from roughly $900 million in the previous commentary to over $1 billion now. So how should everyone think about cash burn really through next year once you get through the launch of the grant? Yeah, so if you look at the multiple things that go into the cash one, one is the capital investment that we're making. As we're guided, we expect to spend around $1.5 billion on our investments, which is an expansion in Arizona, taking from 30,000 installed capacity to 90,000 because of paint shops, stamping, body, and white coming later this year.

Jake: So look at your liquidity.

Jake: <unk> cash burn with a $5 billion lasting into the second quarter of 2025.

Jake: It looks like the implied cash burn stepped up from roughly $900 million.

Speaker Change: Our previous commentary to over.

Speaker Change: $1 billion now so how should everyone to think about.

Speaker Change: Cash burn.

From next year once you get through the one once the gravity.

Yes. So if you look at multiple things to go into cash one one is the capital investment that we're making.

Speaker Change: As we have guided.

We expect to spend around one 5 billion.

Speaker Change: In our investments which is.

Speaker Change: Expansion in Arizona, taking from 30000 installed capacity to 90000.

Speaker Change: Because of the paint shop stamping body in white coming later this year.

James Picariello: And then M2, which is in Saudi Arabia, where we are making a significant investment, building our CBU facility. So that capital expenditure plays a significant role there. And also in the next year, we have a significant amount of capital expenditure that will continue. Got it.

And then <unk>, which is in Saudi Arabia.

Speaker Change: We are making significant investment building, our CPU facility. So net capital expenditure of play a significant role there and also in the next year, we have significant amount of capital expenditures that will continue.

Gagan Dhingra: It's very helpful. And then just following up on John's question about the midsize, more mass market model, how do you guys think about providing some more? Thank you. Well, that's an interesting point.

Speaker Change: Got it that's very helpful. And then just following up on John's question about the mid size more mass market model have you guys thought about providing more.

Speaker Change: Detail on it maybe these are pictures, a little earlier to try to draw from.

Just some more interest from a broader consumer base.

Speaker Change: Absolutely opening the door reservation too.

Speaker Change: To start tomorrow liquidity.

Speaker Change: Okay.

Peter Dore Rawlinson: I actually think that the consumer has been ill-served by some players in this space by taking reservations way, way ahead of time in a very artificial manner. What we believe is a much greater degree of transparency and really getting closer to that product being an absolute reality. You know, remember that any such reservations and money taken is a false form of liquidity because it's something we would have to put in escrow anyway.

Speaker Change: Well, that's an interesting point I actually think that the consumer.

Speaker Change: Has been served by some players in this space.

Speaker Change: Bye.

Speaker Change: Taking reservations way way ahead of time and a very artificial manner. What we believe is a much greater degree of transparency.

Speaker Change: And.

Speaker Change: Really getting closer to that product being an absolute reality.

Speaker Change: Remember goods.

Speaker Change: Any such reservations and money taken is a false form of liquidity because it's something we would have to put in escrow anyway. It doesn't really it's not it's not true liquidity and we believe an absolute transparency and showing the product with a realistic specification.

Peter Dore Rawlinson: It doesn't really, it's not, it's not true liquidity, and we believe in absolute transparency and showing the product with a realistic specification as we do, say, with Gravity; we've not taken reservations deliberately until we get closer to the start of production. This is a philosophy that we've adopted, and we will let you know the time in the future when we open up a waiting list for Gravity, and we're not even close to. I don't think it's right to be opening up reservations on a product that is over two years out. I just don't think it, I think it all serves the consumer, and it's something that I think there's a, there's a transparency that's lacking from that.

Speaker Change: As we're doing say with gravity, we've not taken reservations deliberately until we get closer to the stone to production. This is.

Speaker Change: I'll also say that we've adopted and we will let you know that time is.

In the future when we open a waiting list for gravity and we're not even close to I don't think it's right to be opening up reservations on our product.

Speaker Change: Over two years out.

Speaker Change: I just don't think I think it will serves the consumer and it's something that I think.

Speaker Change: A transparency that's lacking from that.

Speaker Change: Thank you.

Speaker Change: Our next question comes from the line of Stephen King Gara with Stifel. Your line is open.

Speaker Change: Yeah.

Speaker Change: Thanks, Thanks for taking my question.

Speaker Change: Just.

Speaker Change: Just going back to a question about the cash burn can you give us any sense as we think.

Speaker Change: Getting to the midsized launch.

Speaker Change: The cadence of Capex necessary.

25 26 timeframe.

Speaker Change: Well I mean, it's interesting we haven't guided on that.

Speaker Change: But.

Speaker Change: I mean, we.

Speaker Change: We are in a in a very good position, which will see us beyond gravities stone to production, we have some amazing incentives from the kingdom of Saudi Arabia for a setup of our factory. There are two facility and that's where we're going to protein.

Speaker Change: <unk> size product to start with.

Speaker Change: Great. Thank you and just a quick follow up on the gravity order question.

Speaker Change: How soon before production begins.

Speaker Change: You open up gravity orders.

Speaker Change:

Speaker Change: It's an interesting point I think that as I say.

Speaker Change: We can look forward to opening a waiting list when we feel that in absolute transparency, we can release more.

Speaker Change: More specific details of the trim and specifications of that vehicle I don't wanted to do it in.

Speaker Change: In an environment of our pass its a gravity is schedule for startup production late this year and.

Speaker Change: We're on that runway now everyday counts as we build up a crescendo to that launch and we will let you know watch this space.

Speaker Change: Alright, Thank you Peter.

Speaker Change: Thank you.

Speaker Change: Great. Thank you. So this concludes <unk> first quarter 2024 earnings conference call. Thank you all for joining US today and you may now disconnect.

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Operator: Thank you. Our next question comes from the line of Stephen Gengaro with Steeple. Your line is open.

Speaker Change #100: Ladies and gentlemen, thank you for standing by and welcome to the Lucent Group first quarter 2024 earnings Conference call.

Speaker Change #101: Please be advised that today's conference is being recorded.

Speaker Change #101: Later, we will conduct a question and answer session.

Speaker Change #101: Ask a question during this time, please press star one on your Touchtone telephone.

Speaker Change #101: You will then hear automated message advising yohane. This race so we.

Remove yourself from the queue. Please press star one again.

Stephen David Gengaro: Uh, thanks. Thanks for taking my question. Just going back to the question about cash burn, can you give us any sense as to getting to the midsize launch, sort of the cadence of CapEx necessary in 25, 26 times. Well, I mean, it's interesting; we haven't guided on that.

Speaker Change #102: I would now like to hand, the conference over to your speaker for today.

<unk> senior director of Investor Relations. Please go ahead.

Peter Dore Rawlinson: But I mean, we are in a very good position, which will see us beyond gravity starter production. We have some amazing incentives from the Kingdom of Saudi Arabia for the establishment of our factory there, our AMP2 facility. And that's where we're going to put in the mid-sized product to start with. Great. Thank you. And just a quick follow up on the gravity order question. How soon before production begins? Do you open up the gravity order?

Speaker Change #103: Thank you and welcome to lucid group's first quarter 2024 earnings call. Joining me today are Peter <unk>, our CEO and CTO and Gorgon <unk>, our interim CFO and principal accounting officer.

Before handing the call over to Peter Let me remind you that some of the statements on this call include forward looking statements under Federal Securities Laws. These include without limitations statements regarding the future financial performance of the company production and delivery volumes financial and operating outlook and guidance macroeconomic and industry trends.

Speaker Change #103: Any initiatives and other future events. These statements are based on predictions and expectations as of today and actual events or results may differ due to a number of risks and uncertainties. We refer you to the cautionary language and the risk factors in our most recent filings with the SEC and our forward looking statements on page two of our investor deck available on the <unk>.

Speaker Change #103: Relations section of our website at IR Dot lucid Motors dotcom.

Speaker Change #103: In addition management will make reference to non-GAAP financial measures. During this call a discussion of why we use non-GAAP financial measures and information regarding reconciliation of our GAAP versus non-GAAP results is available in our earnings press release issued earlier this afternoon as well as in our investor deck with that I'd like to turn the call over.

Peter Dore Rawlinson: It's an interesting point. I think that, as I say, we can look forward to us opening a waiting list when we feel that, in absolute transparency, we can release more specific details of the trim and specifications of that vehicle. I don't want to do it in an environment of opacity.

Speaker Change #103: To loosen CEO and CTO Peter Robinson, Peter Please go ahead.

Peter Robinson: Thank you you may not and thank you everyone for joining us on our first quarter 2024 earnings call.

Peter Robinson: In my prepared remarks today, I will discuss our partners at the Pis.

Peter Robinson: Better than expected production and delivery figures, our cost advantage and our overall momentum.

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

Now I believe there are two key factors that really sets <unk> apart our superior enhanced technology and our partnership with the Pis, who have been steadfast investors and partners.

Peter Robinson: In Q1, we raised $1 billion in capital through a private placement of convertible preferred stock to an affiliate of the Pis.

Peter Robinson: We are a strategic partner in the countries plan to achieve its Saudi vision 2030 goals.

Peter Robinson: Very grateful for the Pis continued confidence and steadfast support.

Peter Dore Rawlinson: Great. Thank you, Peter. Thank you. Thank you. So this concludes Lucid's first quarter 2024 earnings conference call. Thank you all for joining us today, and you may now disconnect. Thanks for watching!

Peter Robinson: Now turning to production and deliveries in Q1, we produced 1728 lucid as and we delivered 1967, both slightly above our expectations. In fact, it was our best quarter to date.

Peter Robinson: For deliveries up 39, 9% year over year.

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

Peter Robinson: For 2024, we expect to produce approximately 9000 vehicles, which is consistent with our guidance last quarter.

Operator: .......

Speaker Change #104: Let me now provide you with an update on where I believe lucid stands today.

Operator: ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? 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. Later, we will conduct a question and answer session. To ask a question during this time, please press star 1-1 on your touchtone telephone. You will then hear an automated message advising your hand is right. To remove yourself from the queue, please press star 1-1 again.

Speaker Change #104: We've made solid progress on both brand awareness and pricing with our general brand awareness raising in the first quarter, despite reducing media spend from the fourth quarter.

Maynard Um: I would now like to hand 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 first quarter 2024 earnings call. Joining me today are Peter Rawlinson, our CEO and CTO, and Gagan Dhingra, our interim CFO and principal accounting officer. Before handing the call over to Peter, let me remind you that some of the statements on this call include forward-looking statements under federal securities laws.

Maynard Um: These include, without limitation, statements regarding the future financial performance of the company, production and delivery volumes, financial and operating outlook and guidance, macroeconomic and industry trends, company initiatives, and other future events. However, these statements are based on predictions and expectations as of today, and actual events or results may differ due to a number of risks and uncertainties. We refer you to the cautionary language and the risk factors in our most recent filings with the SEC and the forward-looking statements on page 2 of our investor deck, available on the investor relations section of our website at ir.lucidmotors.com. In addition, management will make reference to non-GAAP financial measures during this call.

Speaker Change #104: Our lucid is increasingly recognized as a superior vehicle in nearly every aspect of our customers.

Speaker Change #104: <unk> for the third consecutive year Lucida was named the best luxury electric car by U S and we'll report on its 2024 best hybrid and electric car Awards.

Speaker Change #104: Lucid.

Speaker Change #104: Only EV to win this category awards three years in a row another achievement that sets us apart.

Speaker Change #104: Lucid ourselves buyers key concerns it has price parity with gas equivalents, it's the longest range and fastest charging production car in the U S market is engaging to drive with remarkable performance and enjoys a lower total running costs.

Peter Dore Rawlinson: A discussion of why we use non-GAAP financial measures and information regarding reconciliation of our GAAP versus non-GAAP results is available in our earnings press release issued earlier this afternoon, as well as in our investor deck. With that, I'd like to turn the call over to Lucid's CEO and CTO, Peter Rawlinson. Peter, please go ahead.

Peter Dore Rawlinson: Thank you, Maynard, and thank you, everyone, for joining us on our first quarter 2024 earnings call. In my prepared remarks today, I'll discuss our partners at the PIF, our better than expected production and delivery figures, our cost advantage, and our overall momentum, all of which makes me more optimistic than I've ever been about our future. Now, I believe there are two key factors that really set Lucid apart.

Speaker Change #104: Due to its efficiency.

Speaker Change #104: Now consumers are savvy and they recognize the deficiency of other evs in the market.

Speaker Change #104: Typically they are limited range of most evs.

Speaker Change #104: To ease fears of range anxiety, other automakers must produce and install bigger batteries, which results in higher cost to charge, the vehicle and longer relative charge times versus lucid.

Speaker Change #104: Remember lucid is the most efficient vehicle in its class as measured in miles per kilowatt hour, while leading the industry for range and challenging speed and having a lower total cost to charge.

Speaker Change #104: I've seen commentary about our losses per vehicle, but such speculations reflect the lack of knowledge of <unk> costs and our scale of intentions.

Inside the extensively high cost of goods line item is the cost of the factories and equipment needed to make for vehicles and scale our business.

Speaker Change #104: If we envisage the company would only make a small number of vehicles, we would have purchased less equipment and built a smaller country, but we have a more ambitious goal to provide affordable long range evs for mainstream mass market consumers.

And as we scale the leverage in our model should become obvious.

Speaker Change #104: And we're embarking on a transformational phase the expansion of our vehicle lineup.

Peter Dore Rawlinson: For 2024, we expect to produce approximately 9000 vehicles, which is consistent with our guidance last quarter. Let me now provide you with an update on where I believe Lucid stands today. We've made solid progress on both brand awareness and pricing, with our general brand awareness rising in the first quarter despite reducing media spend from the fourth quarter. Lucid Air is increasingly recognized as a superior vehicle in nearly every aspect that customers value.

Peter Dore Rawlinson: For the third consecutive year, Lucid Air was named the Best Luxury Electric Car by U.S. and World Reports in its 2024 Best Hybrid and Electric Car Awards. Lucidaire is the only EV to win this category award three years in a row.

Speaker Change #104: Lucid a pure is already here with a starting price from $69900.

Peter Dore Rawlinson: And, as we scale, the leverage in our model should become obvious. And we're embarking on a transformational phase, the expansion of our vehicle lineup. Lucid Air Pure is already here with a starting price of $69,900.

Speaker Change #104: And the gravity SUV program is scheduled to start production late this year.

Speaker Change #104: Our Suvs total addressable market.

Speaker Change #104: Is six times larger than the market, we could access in 2023.

Speaker Change #104: And the excitement is palpable.

Speaker Change #104: In a third party survey.

Speaker Change #104: Really two thirds of EV SUV purchase in timbers would consider lucid.

Speaker Change #104: And this is worth emphasizing.

Speaker Change #104: <unk> in every three people intending to purchase an electric SUV nose and would consider lucid.

Peter Dore Rawlinson: Amongst all SUV purchase intenders, EVs and gas SUVs, more than 50% would consider Lucid. Now, this is a staggering figure for any brand, let alone a new one, and thus reflects the significant opportunity ahead. We are continuing to invest in our future with further virtual vertical integration, stamping body and lights for the gravity SUV program, paint shop expansion, and powertrain at AMP one, an important part of our longer-term cost and quality strategy. We've applied all of our learnings from AIR and incorporated them into our SUV program.

Speaker Change #104: Amongst all STB purchase in tenders, Evs and gas gas Suvs more than 50% would consider lucid.

Speaker Change #104: Now this is a staggering figure for any brand let alone a new one.

Speaker Change #104: This reflects the significant opportunity ahead.

Speaker Change #104: We are continuing to invest in our future with Fuller virtual vertical integration.

Speaker Change #104: <unk> body in white for the gravity SUV program paint shop expansion and powertrain won an important part of our longer term cost and quality strategy.

Speaker Change #104: We've applied all of our learnings from air and incorporated them into our SUV program.

Speaker Change #104: So I am confident that gravity will redefine this segment with world class range efficiency charging speed and interior volume.

Speaker Change #104: Later this year, we plan to host analysts and institutional investors.

Speaker Change #104: One facility in Arizona to show you a state of the art factory manned by our incredible employees and the machines that build the machines.

Speaker Change #104: We will also have vehicles on the road later this year for you to test drive.

Peter Dore Rawlinson: And following the Gravity SUV program, we see another step change in total addressable market expansion with our midsize vehicle, which is scheduled for start of production in late 2026. I'm confident that we can achieve unrivaled levels of efficiency for this crucial mid-sized class vehicle. And, again, I can't stress enough, efficiency is the key to a smaller battery for any given range.

Speaker Change #104: Following the gravity SUV program, we see another step change in total addressable market expansion with our midsize vehicles, which is scheduled for start of production in late 2026.

Speaker Change #104: I am confident that we can achieve unrivaled levels of efficiency for this crucial mid sized class vehicle and again I can't stress enough efficiency is the key to a smaller battery for any given range.

Speaker Change #104: On a smaller battery is a key element to lower cost when it comes to making an EV.

Peter Dore Rawlinson: And a smaller battery is a key element to lower cost when it comes to making an EV. I can't wait to show you our mid-size game changer. Next, I'd like to talk about our technology business. Our Aston Martin deal continues to generate more interest in our technology from other prospective partners. And, additionally, we are the sole supplier of the front drive unit to a leading electric racing series.

Speaker Change #105: I cant wait to show you.

Speaker Change #105: Mid size game changer.

Speaker Change #106: Next I would like to talk about our technology business.

Speaker Change #106: Aston Martin deal continues to generate more interest in our technology from other prospective partners and Additionally, we are the sole supplier of the front drive unit to a leading electric racing series. Please.

Speaker Change #106: Please watch this space as we continue to discuss monetization opportunities across all aspects of our technology, including our world class software.

Speaker Change #106: I'll close with additional details about our momentum.

Speaker Change #106: We suppose 12000 vehicles on the road in Q1, which takes US nicely passed the critical threshold into boosting word of mouth awareness and I'm pleased with the 39, 9% year over year uptick in sales in Q1.

Speaker Change #106: With the momentum we're seeing here in April.

Peter Dore Rawlinson: We expect typical seasonal slowing in Saudi Arabia in Q2, and we expect typical seasonal slowing globally in Q3 as consumers go on vacation. Despite this, for the first time, I feel we're on the cusp of escape velocity. We have sales momentum, a compounding efficiency advantage, unprecedented interest from consumers and corporate partners, more than $5 billion in total liquidity, and gravity, which I believe is on track to become the world's best SUV.

Speaker Change #106: I always offer caveats, we expect typical seasonal slowing in Saudi Arabia in Q2, and we expect typical seasonal slowing globally in Q3 as consumers go on vacation display.

Speaker Change #106: Despite this for the first time I feel we're on the cusp of escape velocity.

Speaker Change #106: We have sales momentum a compounding efficiency advantage.

Speaker Change #106: Unprecedented interest from consumers and corporate partners more than fully billion dollars in total liquidity.

Speaker Change #106: And gravity, which I believe is on track to become the worlds best SUV.

Speaker Change #106: Therefore, I've never been more confident in our future.

Speaker Change #107: So before turning the call over to <unk> I would like to take a moment to acknowledge our recently announced management change.

Speaker Change #107: Derek County will now lead digital organization as interim head taking over from Mike Bell, who will be leaving to pursue other opportunities I would like to thank Mike for all his contributions.

Speaker Change #107: Joined lucid in early 2021 and was instrumental in building a truly unparalleled software organization.

Speaker Change #107: Mike will be staying on for a period of time in an advisory capacity and I have full confidence and Derek and the digital organization and as we enter into our next transformational phase of the company.

Speaker Change #108: So I'll end with a big thank you to all of our suppliers.

Speaker Change #108: Partners and our shareholders and most of all thank you to all.

Speaker Change #108: <unk> employees for your commitment your dedication and sheer hard work.

Speaker Change #108: With that I'd like to turn it over to Jack and <unk> to provide an update on our financials.

Speaker Change #108: Sure.

Jack: Thank you Peter.

Jack: And thank you to those who are taking the time to join us today.

Jack: Before I get to my prepared remarks.

Jack: Our also I'd like to start by thanking the entire lucid team.

Jack: I am continually amazed by and thankful for everyone's dedication and perseverance.

Jack: Turning to our particularly for fourth quarter financial results.

Jack: During the first quarter, we produced 1728 vehicles.

Gagan Dhingra: And we reiterate our guidance to produce approximately 9,000 vehicles this year. We delivered 1,967 vehicles in Q1, nearly 40% year-over-year and up 13% sequentially in Saudi Arabia. We resolved some of the logistical go-to-market challenges we had in Q4, and we were able to ramp up deliveries in Q1. We are also pleased with North American volumes, which we think are benefiting from growing brand awareness, an increasing number of vehicles on the road, and improving affordability. We are encouraged by what we are seeing. Turning to the PNM, for Question 1.

Jack: And we reiterate our guidance to produce approximately 9000 vehicles this year.

Jack: We delivered 1967 vehicles in Q1.

Jack: Bob.

Jack: Nearly 40% year over year.

Jack: And up.

Jack: 13% sequentially.

Jack: In Saudi Arabia.

Jack: Resolve some of the logistical and go to market challenges, we had in Q4, and we were able to ramp up deliveries in Q1.

Jack: Okay.

Jack: We're also pleased with North American volumes.

Jack: Which were the pink is benefiting from growing brand awareness.

Jack: An increasing number of vehicles on the road.

And improving affordability.

We are encouraged by what we are seeing.

Jack: Turning to the P&L.

Jack: For Q1.

Gagan Dhingra: Revenue was $172.7 million dollars, 9.9% sequentially. Although driven primarily by higher deliveries, average selling prices were down sequentially due to mix as well as the pricing adjustments which affected part of the quarter. The cost of revenue in Q1 was $404.8 million. Despite a lower average selling price, our gross margin improved on a quarter-over-quarter basis due to both cost optimization initiatives, including a reduction in the bill of materials and logistics costs, and lower impairment charges in Q1 related to LCNRV. The LCNRV amount was approximately $137.8 million.

Jack: Revenue was $172 $7 million.

Jack: Nine 9% sequentially.

Jack: Driven primarily by higher deliveries.

Jack: Average selling prices were down sequentially.

Jack: Two mix as well as new pricing adjustments, which affected a part of the quarter.

Jack: Cost of revenue in Q1 was $404 8 million.

Jack: Despite lower average selling price.

Jack: Our gross margin improved on a quarter over quarter basis.

Jack: To vote cost optimization initiatives, including production and bill of material and logistics cost.

Jack: And lower impairment charges in Q1 related to LTE and <unk>.

The amount was approximately $137 $8 million.

Gagan Dhingra: A 20.8% reduction from Q4. Fixed costs related to the depreciation of our factories and equipment remain a large part of the cost of revenue, and as we ramp up production and delivery. We expect the overhead per vehicle to significantly improve. However, there are many controllable and uncontrollable variables that can affect gross margin, and as a result, we don't typically provide specific gross margin guidance. However, I want you to provide some directional color to aid in your modeling.

Jack: Two 8% reduction from Q4.

Jack: Fixed cost related to the depreciation of our factories and it remains a large part of the cost of revenue.

Jack: And as we ramp up production and deliveries.

We expect the overhead per week to significantly improve.

Jack: There are many controllable and uncontrollable variables that can affect gross margin and as a result.

Jack: We don't typically provide specific gross margin guidance.

Jack: However.

Jack: I wanted to provide some directional color to aid in your modeling.

Jack: Looking forward to the second quarter of 2024.

Jack: Anticipate gross margin to remain flat despite.

A full quarter of price adjustment in Q2.

Jack: Kind of half quarter impact in Q1.

Jack: This improvement.

Jack: This is mainly due to further cost optimization initiatives.

Jack: As we move into the back half of the year.

Jack: We expect to build inventory of components for the gravity SUV program.

Jack: Resulting in an increase in LC and RV impairments from an accounting standpoint.

This.

Jack: In addition to higher depreciation due to further phase two activation.

Jack: Expected to adversely affect gross margin.

Jack: I mentioned this in my prepared remarks last quarter as well.

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

Gagan Dhingra: Longer term, our technology will be a key driver of our gross margin. With scale, I believe you will see strong gross margins with efficiency the key enabler. Now moving to operating expenses, R&D expense in Q1 totaled approximately $284.6 million, up 17.1% sequentially.

Jack: Lower term.

Jack: Our technology will be key driver of our gross margin.

Jack: Where the scale I believe he will.

Jack: Strong gross margins with efficiency the key enabler.

Jack: Now moving to operating expenses.

Jack: R&D expense in Q1 total approximately $284 6 million.

Jack: Up 17, 1% sequentially.

Gagan Dhingra: We expect R&D to increase further as we ramp up the new weekly programs. I think it's widely accepted that Lucid has the best EV technology in the world. S. Cheney's expense in Q1 was approximately $213.2 million, down 11.5% from Q4. The sequential decrease was primarily due to lower sales and marketing spend due to seasonality and lower professional services and other general expenses due to continued cost optimization initiatives.

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

Speaker Change #110: I think it's widely accepted that lucid has the best technology in the world.

SG&A expense in Q1 was approximately $213 2 million.

Speaker Change #110: And down 11, 5% from Q4.

The sequential decrease.

Was primarily due to lower sales and marketing spend.

Speaker Change #110: Seasonality and lower professional services and other general expenses due to continued cost optimization initiatives.

Gagan Dhingra: Although we have identified additional cost-reduction opportunities to execute this year, we expect SG&E to increase primarily due to continued investments in strategic growth initiatives. We ended the first quarter with 50 studio and service centers, excluding our Temporary and Satellite Service Centers, up from 45 in Q4. On the service side, we ended Q1 with 54 mobile vans in the fleet and 93 nationwide approved body shops.

Speaker Change #110: Although we have identified additional cost reduction opportunities to execute this year, we expect SG&A to increase primarily due to continued investments.

Speaker Change #110: In strategic growth initiatives.

Speaker Change #110: We ended the first quarter with 50 studio and service centers.

Speaker Change #110: Excluding our temporary effect like service centers.

Speaker Change #110: Upfront quantified in Q4.

Speaker Change #110: On the service side, we ended Q1 with 54 mobile growth in the fleet and 93 nationwide approved body shops.

Gagan Dhingra: We plan to continue to strategically expand our studio and service center footprint, as well as satellite service centers, which will cost-effectively provide additional locations for Lucid customers, in 2024. We see a pathway to operating leverage. The key will be driving volumes and scale. Our stock price compensation in the quarter was $63.7 million. Total other income was $49.2 million, down from $83.1 million in Q4.

Speaker Change #110: We plan to continue to strategically expand our studio and service center footprint as well as satellite service centers.

Speaker Change #110: Rich.

Cost effectively toward additional locations for lucid customers.

Speaker Change #110: In 2024.

Speaker Change #110: We see a path to operating leverage.

Speaker Change #110: The key will be driving volumes and scale.

Speaker Change #110: Our stock based compensation in the quarter or $63 7 million.

Speaker Change #110: Total other income was $49 2 million down from $83 1 million in Q4.

The decrease was primarily attributable to a noncash loss of $19 $9 million.

Related to the change in fair value of our equity securities of Aston Martin chairs.

Speaker Change #110: Which we received in Q4 as a part of our strategic technology arrangement.

Speaker Change #110: In Q1.

Speaker Change #110: Achieved an adjusted EBITDA loss.

Speaker Change #110: $198 4 million.

A slight improvement.

Speaker Change #110: From $604 6 million in Q4.

Speaker Change #110: Moving to the balance sheet.

Speaker Change #110: In Q1.

Speaker Change #110: We raised $1 billion.

Speaker Change #110: Private placement of convertible preferred stock.

Speaker Change #110: To an affiliate of the Pis.

Speaker Change #110: I would like to Echo Peter and paying the PAA for the partnership and the commitment to lucid and our mission.

Speaker Change #110: <unk> partnership and support separates us from others in the <unk>.

Speaker Change #110: Industry.

Speaker Change #110: We ended the quarter with approximately $4 6 billion in cash cash equivalents and investments.

Speaker Change #110: With total liquidity.

Speaker Change #110: <unk> five 3 billion.

Gagan Dhingra: Note, this excludes the $50.8 million in value of the Aston Martin shares as of March 31. We have been able to consistently sustain a strong balance sheet over time. And, as we have done for the last several years, we will continue to be opportunistic in exploring finance. Turning to inventory, total inventory decreased 18.8% sequentially, primarily due to further raw material drawdown and lower purchases as we optimize our existing inventory. This is consistent with what I outlined last quarter, where we continue to see a pathway to a significant reduction in raw materials on hand. Capital expenditures in Q1 were $198.2 million, down from $272.6 million in Q4.

Speaker Change #110: Note this excludes the $68 million.

Speaker Change #110: In value of the ethylene market share as of March 31.

Speaker Change #110: We have been able to consistently sustain a strong balance sheet overtime.

Speaker Change #110: And as we hadn't done for the last several years.

Speaker Change #110: We continue to be opportunistic and exploring financing.

Speaker Change #110: Turning to inventory.

Speaker Change #110: Total inventory decreased 18, 8% sequentially, primarily due to a further raw material drawdown and lower purchases as we are.

Speaker Change #110: Optimize our existing inventory.

Speaker Change #110: This is consistent with what I outlined last quarter, where we continue to see a pathway to a significant reduction in raw material on hand.

Capital expenditures in Q1 was $198 $2 million down from $272 6 million in Q4.

Speaker Change #110: Moving to the outlook for 2024.

Speaker Change #110: We forecast production of approximately 9000 vehicles in 2024.

Speaker Change #110: And we will continue to prudently manage and adjust our production to meet our sales and delivery teams.

Speaker Change #110: As Peter mentioned.

Speaker Change #110: We are pleased with the demand we are seeing but I would also remind you.

Speaker Change #110: That we typically see some seasonality in Saudi Arabia towards the end of the second quarter.

Speaker Change #110: With regard to our liquidity position, we ended the quarter with total liquidity of approximately $5 3 billion.

Speaker Change #110: We expect this will give us runway through the start of production of the gravity SUV program and into the second quarter of 2045.

Speaker Change #110: Moving to Capex.

Gagan Dhingra: We will continue to focus on our future growth initiatives, and we expect capital expenditures for 2024 to be approximately $1.5 billion. This reflects certain deferrals in our capital outlay from last year. The AMP2 Expansion for Completely Built-Up Units, and the Completion of the AMP1 Phase 2 Expansion for Stamping, PaintShop, Powertrain On-Premise, and Body & Wipe for the Gravity SUV program. From a product perspective, We are scheduled for the start of production of the Gravity SUV program in late 2024 and scheduled for the start of production of our high volume midsize platform in late 2026.

We will continue to focus on our future growth initiatives and we expect capital expenditures for 2024 to be approximately $1 5 billion.

Speaker Change #110: This reflects sustaining deferrals in our capital outlay from last year.

The <unk> expansion for computing buildup clinic, the completion of the AMCOL phase II expansion for stamping paint shop.

Speaker Change #110: And on premise and meridian wide productivity SUV program.

Speaker Change #110: From a product perspective.

Speaker Change #110: We are scheduled for startup production of the clarity SME program in late 2024 and scheduled for start up production of our high volume mix. This platform in late 2026.

Gagan Dhingra: Our performance this quarter continues to demonstrate positive momentum. The expansion of our total addressable market, the PURE, and upcoming Gravity FCV and Mid-Site programs provide further opportunities. And I feel very good about our cost optimization strategies and see many opportunities ahead. With that, let me turn it back to Maynard to get to your questions. Thanks, Gagan.

Speaker Change #110: Our performance this quarter continues to demonstrate the positive momentum.

Speaker Change #110: The expansion of our total addressable market.

Speaker Change #110: Appeal upcoming clarity a theory and military programs.

Speaker Change #110: Provides further opportunities.

Speaker Change #111: And I feel very good.

Speaker Change #111: Our cost optimization strategies and see many opportunities ahead.

Speaker Change #112: With that let me turn it back to manner.

Speaker Change #113: To get to your questions.

Maynard Um: We'll now start the Q&A portion of the call. Before we take questions from those on the phone, I want to post some questions that our retail investors sent in through the SAIT technology platform. Our first question is from Anath.

Speaker Change #113: Thanks, Skagen will now start the Q&A portion of the call before I take questions from those on the phone I want to pose some questions that are retail investors sent into the <unk> technology platform.

Skagen: Our first question is from an off can you elaborate on lucid pathway to profitability what are the key milestones and challenges the company anticipates facing in reducing production costs and achieving positive gross margins.

Peter Dore Rawlinson: It's all about scale. The more we can scale, the more cars we make, the more volume we can spread for fixed costs. That's the cost of our investment, our incredible factory and facility, our long-term investments across the sale of each car. So how do we do that?

Speaker Change #114: Thank you Manav, it's all about scale the more we can scale the more cost we make the more volume we can spread the fixed costs thats. The cost of our investments are incredible factoring facility are long term investments across the sale of each car. So how do we do that.

Peter Dore Rawlinson: We need to continue growth in Lucid Air sales right now, and right now, we're trending up 40% from Q1 this year relative to last year. Now, in a similar period, we see the sales of the Tesla Model S down very, very considerably. We're outselling key competitors like Porsche and Taycan. It's about scale.

Speaker Change #114: Need to continued growth of lucid.

Speaker Change #114: Sales right now and right now we're trending up 40% from Q1 this year.

Speaker Change #114: Relative to last year and a similar period.

Speaker Change #114: C.

Speaker Change #114: The sales of Tesla model S down very very considerably.

Peter Dore Rawlinson: And the next thing on that scale path is to get Gravity into production, which will have a multiplier effect upon the market size. And Gravity is scheduled for start of production late this year. And then, beyond that, we need to get our midsize vehicle, our volume vehicle, priced at around, we believe, about $48,000.

Speaker Change #114: Selling key competitive push should point, Kevin it's about scale and the next thing on that on that scale path is to get gravity to production that will have a multiplier effect upon the market size and gravity is schedule to start production late this year and then beyond that we need to get a midsize vehicles.

Speaker Change #114: Our volume vehicle price at around we believe about $48000 get that into production and is on schedule for production for late 2006, and I've got to tell you just how much our current finances are truly dominated by the major investments to lose it.

Peter Dore Rawlinson: We get that into production, and it is on schedule for production for late 26. And I've got to tell you just how much our current finances are truly dominated by the major investments that Lucid's made for its future. You know, things like the expansion of our first factory in Arizona. We've got nearly 4 million square feet in there.

Speaker Change #114: Paid for its future things like the expansion of our Arizona factory, we got nearly 4 million square feet in that General Assembly is ready with putting the robot seem now for building the body structure for the gravity, we've invested in a huge stamping line, we're integrating logistic.

Peter Dore Rawlinson: General assembly is ready. We're putting robots in now to build the body structure for gravity. We've invested in a huge stamping line, and we're integrating logistics. We're bringing the powertrain facility right under that one roof. And that's exactly where we're going to make the units that we supply to Aston Martin, all under one roof. And I think there are some photographs in the presentation, Maynard, and videos on our social media pages.

Speaker Change #114: We're bringing a powertrain facility under the one roof and that's exactly where we're going to make the units that we supply to Aston Martin all under one roof and I think there are some photographs in the presentation nine odd and videos on our social media pages and then the other thing is that.

Peter Dore Rawlinson: And then the other thing is that, you know, the real big advantage that Lucid's got over everyone else is efficiency. And I don't say that as an engineer. I say that as a businessman. That efficiency means we can make cars with smaller batteries, with fewer batteries than anyone else.

Speaker Change #114: The real big advantage that lucid Scott over everyone else is efficiency and I don't see that as an engineer I will say that as a businessman that efficiency means we can make cars with smaller batteries with less batteries than anyone else that means because the batteries. The most cost costly part of an EV, we will be able to make cars more cost.

Peter Dore Rawlinson: That means because the battery is the most costly part of an EV, we'll be able to make cars more cost effectively and, therefore, with a higher profit margin than anyone else, which leads perfectly to your role, Gagan. Yeah, thank you, Peter. And two things more, scale and continuous cost optimization initiatives. With scale, we'll be able to significantly bring down, number one, the fixed costs for vehicles, including depreciation of the investment we made in the factory, which is a big part of our cost of goods sold. Number two, labor and overhead. You are more efficient when you work at your optimum capacity.

Speaker Change #114: Thank Tivoli and therefore with more profit margin than anyone else, which leads perfectly to your ROE <unk>, yes. Thank you, Peter and do things more scale and continuous cost optimization initiatives.

Speaker Change #115: So with scale, we'll be able to significantly breakdown number one the fixed cost per vehicle.

Speaker Change #116: Excluding deposition of the investment we made in the factory, which is a big part of our cost of goods sold number two labor and overhead and you get more efficient when you look at the optimum capacity.

Speaker Change #116: Number three also the bond costs as volume provides a significant cost leverage.

Speaker Change #116: Now, let me add to the cost optimization initiatives that we've been working very aggressively and I am personally leading this on a daily basis with big support from Peter Allen.

Speaker Change #116: In the prepared remarks, we were able to reduce the bill of materials, which is the cost of the parts that go into the car and also logistics costs significantly this quarter.

Speaker Change #116: We have also identified additional opportunities to execute throughout the year.

Speaker Change #117: Thanks. Our next question is from the platform is Jason the stock price keeps dropping what measures will you be employing to bring the price up considerably. It seems product output is extremely low now.

Maynard Um: Oh, thanks, Jason. Now, look, I share price again. Again, it's all about volume.

Jason: Thanks, Jason.

Jason: Share price again, it's again, it's all about volume so forgive me because the share price and the path to profitability are interwoven.

Jason: Against our broader EV market, where other automakers products, so really down were up 40% on deliveries year on year. We are bucking that trend. It's all about scale. It's about recognition on the brand and I believe we're getting there.

Jason: Gravity coming just just just to put this in perspective in Q1 for the first time ever lucid al So sold who should tie can weave.

Jason: So the Mercedes Benz <unk> for the third consecutive quarter, we've outsold the Mercedes Benz EQ U S as well for third consecutive quarter, we've sold the new BMW <unk> seven and <unk>.

So the Audi E Tron GT for the fifth consecutive quarter.

Jason: I want to also explain another matter here, we know manufacturing constrained this isn't to ramp up situations. We can link for me, it's very much an economy situation. It's about growing awareness of just how the product is and the sales will follow and that's that's the trajectory we're on.

Peter Dore Rawlinson: We can make them. It's very much an economic situation. It's about growing awareness of just how awesome the product is, and sales will follow. And that's the trajectory we're on. It's all about the sales and volumes. And I also want to just put, as a final point, I would like to put, you know, Lucid's stock price in context for this year. Just for context, Tesla's shares are down about 25.6 percent. Rivian's down about 56 percent. We're down 27 percent.

Jason: It's all about these sales and volumes.

Speaker Change #119: I also want to just put a final point I would like to put it.

Speaker Change #119: <unk> stock price in context for this year just for context casual is down about 25, 6% Libyans down about 56% were down 27%. So really there is a trend here in this sector.

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

Speaker Change #119: But clearly we've got a path to get out of it.

Gagan Dhingra: Yeah, thank you, Peter. And again, you know, we are also very focused on execution and optimization of costs. We have the most efficient regal, but it's not just about the sustainability story. It's about growth, it's about scale, and it's about profitability. I expect it will show in our margins over time as we scale. Thanks. The third question is from Justin.

Speaker Change #120: And again can do you want to add some color yes. Thank you Peter.

Speaker Change #121: Again, we are also very focused on execution and optimization of our cost.

Speaker Change #122: The most efficient vehicle.

Speaker Change #123: <unk> is not just about the sustainability story, it's about growth, it's about scale and it's about the profitability.

Speaker Change #123: I expect it will show in our margins over time as we scale.

Speaker Change #123: The third question is from Justin as lucid and thoughts with any of the legacy automakers to provide battery or motors for production.

Speaker Change #123: Justin Thanks for the question you know I can't emphasize enough.

Speaker Change #124: Is absolutely central to the whole vision of the company and Thats when we call Lisa group.

Peter Dore Rawlinson: You know, the vision is to have a meaningful impact upon the planet, upon the environment, to take technological leadership and to use that leadership so that we can travel further with less and be truly sustainable, and then to share that technology and provide that technology to other companies. And we've taken the first step; we've provided the Sapphire technology, a hypercar technology, to no less than Aston Martin. And there's a timescale associated with this, you know. I mean, you know, the technology that we've got in our current lineup of touring Grand Touring is ideally suited to a luxury performance car from another automaker.

Justin: We've taken the first step.

Justin: Providing the Sapphire technology, a hypercard technology to no less than Aston Martin and does a timescale associated with this you know I mean the.

Justin: The technology that we've got in our current lineup of touring Grand touring with ideally suited to a luxury performance comp from another automaker, but what really excites me is the potential for the technology that we're currently developing right here in this building illicit headquarter.

Peter Dore Rawlinson: But what really excites me is the potential for the technology that we're currently developing right here in this building at Lucid headquarters, where I speak for a midsize tech platform. This is the tech that really is going to suit a high-volume family car of the future.

Justin: It is where I speak for mid sized technology platform. This is the tank that really is going to suit.

Justin: Any volume family car of the future and that's what that's what's going to create the multiplier effect. So.

Speaker Change #125: As you can appreciate we can't really talk about specifics, but indeed, we are in talks there are large Oems that appreciate the value of amtech and they are certainly interested in working together with US again would you like to add anything to that.

Gagan Dhingra: Absolutely. And I think therein lies another misunderstanding. Because of our current finances, there's this myth, this is complete misinformation, that our tech is so expensive. And it's completely the opposite.

Speaker Change #126: Under the right economics, as absolutely and I think therein lies another misunderstanding because of our current finances does this meet this is complete misinformation.

Gagan Dhingra: Our tech is made for affordability at scale. It's designed around reducing the need for batteries, which is the biggest cost item of making an EV. So actually adopting Lucid's technology is a route to significantly reducing the cost of making an EV, and this is simply not sufficiently appreciated. But we're in the sewing process. Great. And our last question is from Robert. Will Lucid make an affordable car to compete with Tesla? Well, I've got an answer for that.

Speaker Change #126: <unk> is so expensive and it's completely the opposite our attack is made for affordability at scale H designed around reducing the need for battery, which is the biggest cost item or.

Speaker Change #126: Making an EV so actually adopting loosest technology is a route to significantly reducing the cost of making an EV and this is simply just not sufficiently appreciated.

Speaker Change #126: Well remember soon.

Speaker Change #126: Great and our last question is from Robert will lucid make an affordable car to compete with Tesla.

Robert: Well I've got a.

Speaker Change #128: And answer to that we already are.

Speaker Change #129: The lucid.

Speaker Change #129: Oh Railroad drive finance machine on the Planet 69900, <unk> promised back in September 2020, we're already competing with Tesla, but.

Robert: Wait till a midsize comes out late 'twenty, six that's when where and how the car.

Maynard Um: That's when we'll have a car, $48,000, $50,000. And that is the big one, the one that's going to be really exciting. Great. Now we'd like to take questions from the phone lines. Tawanda, can we take the first question, please? Yes, thank you. Please stand by. Our first question comes from the line of Adam Jonas. Your line is open. Hey, uh, everybody.

Robert: 4800, $50000 and that is the big one the one that's going to be really exciting.

Speaker Change #130: Great now, we'd like to take questions from the phone lines to wonder can we take the first question. Please.

Speaker Change #131: Yes. Thank you.

Speaker Change #132: Please standby.

Our first question.

Speaker Change #132: Comes from the line of Adam Jonas.

Adam Michael Jonas: Your line is open.

Adam Michael Jonas: Okay.

Adam Michael Jonas: Hi, everybody Hi, Peter you said in your.

Adam Michael Jonas: Prepared remarks and in the statements.

Adam Michael Jonas: That sales momentum is building.

Speaker Change #134: Can you quantify what supports that statement and over what period. It wasn't measured where you were you talking year on year or Youre talking about momentum building kind of more during the quarter and sequentially.

Peter Dore Rawlinson: Were you talking year on year, or were you talking about momentum building kind of more during the quarter and sequentially? Okay, yes. Hi Adam.

Peter Dore Rawlinson: So if we look at 2023 versus 22, I believe we were up by 37%, or close to 37% in memory. And if you compare Q1 24 to Q1 23, that's where we have the 39.9%. Very, very close to 40% growth. So we're bucking the trend of the market quite nicely. Okay, and this is a follow-up. You said that your focus remains on cost or relentless attention to cost, and you mentioned some big improvements this quarter on bomb costs specifically. Can you give some examples of this improvement in bomb cost within the quarter? And who are you benchmarking for the bomb cost for gravity?

Peter: Okay, Yes, hi, Adam So if we look at 2023 versus 22, I believe we were up by 37% or close to 37% on memory and if you compare Q1 'twenty four to Q1 'twenty three that's where we had the 39, 9%.

Speaker Change #136: Very very close to 40% growth. So we're bucking the trend of the market quite nicely.

Okay.

Speaker Change #137: And just as a follow up you said that your focus remains on cost our relentless attention to cost and you mentioned some big improvements.

Adam Michael Jonas: Quarter on Bom cost specifically can you give some examples of this improvement and bomb.

Within the quarter and who are you benchmarking for the bomb cost for the gravity. Thank you.

Adam. Thank you for your question. So yes in this quarter. Despite the pricing actions, our gross margin improved and is mainly due to cost optimization initiatives, including bump cost reduction and we didn't bump cost there are various component and.

We are working hard with both the supplier side of things and internally and internally more on the technology side of it where we are bringing.

Adam Michael Jonas: The battery cost down our car is the lowest vehicle range.

Adam Michael Jonas: But also then on the logistics side of it.

We are able to bring our cost down significantly quarter over quarter and in addition, we identified a few other initiatives that we want to execute throughout the year.

Adam Michael Jonas: We're also managing our inventory very effectively.

Adam Michael Jonas: <unk> helps bringing the cost down.

Adam Michael Jonas: Okay.

Operator: Great. We'll take our next question, Tawanda. Please stand by for our next question. Our next question comes from the line of John Murphy with Banks America. Your line is open. Good evening, everybody.

Speaker Change #138: Great. We will take our next question Joana. Please standby for our next question.

Joana: Our next question comes from the line of John Murphy with Bank of America. Your line is open.

John Murphy: Peter, I don't necessarily mean to conflate the company that started with Tesla for many reasons. But I mean, as we look at the S and X, the company was struggling, and it wasn't until the three and the Y launch that there was kind of an escape velocity from self-funding. And it seems like, you know, we're looking at sort of a parallel here, right? And I don't mean to make an explicit direct comparison, but it does seem like the space or the smaller vehicle launching in late 26 will be sort of where you potentially reach that escape velocity similar to when they hit the three and the Y.

John Murphy: Hi, good evening everybody.

John Murphy: Peter.

John Murphy: I don't want to me to conflate the company that's already with Tesla for.

John Murphy: Any reasons, but as we look at the <unk>.

John Murphy: The company was struggling and it wasn't until the three in Hawaii launch that there was kind of escape velocity on self funding and it seems like we're looking at sort of somewhat of a parallel here when I don't mean to us.

John Murphy: You make it explicit direct comparison, but it does seem like the.

Peter Dore Rawlinson: So I was wondering if you would maybe kind of concur with that, to some degree, right? I hope you don't take offense to that, but to some degree, and then also, as we think about that, we're seeing sort of these dribs and drabs, and I wouldn't say, you know, a billion dollars is a drib and a drab. It's a lot of money, but, you know, sort of this question from investors. Will you be able to get the funding sort of guaranteed to get to the launch of that Escape Velocity, or maybe it's the space, in 2026? So, I mean, one, do you kind of agree with that logic that that's when you reach Escape Velocity, and will you have the funding to get there? Thank you, John.

Speaker Change #139: To some degree right I hope you don't take offense to that but it would take you to some degree and then also as we think about that.

We're seeing sort of these dribs and drabs and I wouldn't say $1 billion is attributed Rab, it's a lot of money, but sort of this question from investors.

Speaker Change #139: Will you be able to get the funding sort of guaranteed to get to the launch of that escape velocity or maybe it's the space.

Speaker Change #139: In 2026, so I mean, when do you kind of agree with her that logically. That's when you reach escape velocity and will you have the funding to get there.

Peter Dore Rawlinson: An interesting parallel on a very thoughtful question from you, as always. I mean, look, the vision is to get to very significant volume, and clearly that comes in two steps. Well, there are three steps. First of all, scale the air more with brand awareness. Step two, go for about six times the term with gravity.

Speaker Change #140: Thank you John an interesting parallel in a very thoughtful question from you all as always.

Speaker Change #141: I mean look.

Speaker Change #141: The position is to get to very significant volume and clearly that comes in two steps and while the three steps first of all scale ammo with brand awareness step to go for about six times, the Tam with gravity and I really believe is a very big significant.

Speaker Change #141: Opportunity with gravity the model X didn't capture because model X was a big call like a bit see UV like whereas gravity is a proper SUV and it's a seven seat three row and we've got this unique secret weapon that we can go further with less battery and address the critical.

Speaker Change #141: Cost of making these products and which you'll see.

Speaker Change #141: See unfold as we get to a degree of scale, which gravity will enable but it's true to say that we want food that full fruition of all that until we get the mid sized platform into production schedule pool started production late 'twenty six now regarding a partnership.

Speaker Change #141: It really makes sense as lucid apart is the combination of two things a unique world class technology combined with our special relationship with the Pis and that relationship with the Pis and <unk> immediately financial one because they are invested in us.

Cornerstone of transitioning the economy of Saudi Arabia to our sustainability model with their audacious vision 2030, and they are there.

Speaker Change #141: We are in this together, they're equally incentivized for success right now running in Saudi Arabia is the first car plant they've ever had operating in its elusive plants right now we're laying the foundations literally pouring the concrete.

Speaker Change #141: Complete business unit, our CPU factory, which is schedule to sync with the advent of the arrival of the mid size Z in Saudi Arabia. They are incentivized for success, we are mutually incentivized for success nothing less than <unk> is.

Speaker Change #141: Acceptable here.

Peter Dore Rawlinson: Just one, one second follow up. 9000 vehicles produced or airs produced this year. You've already delivered more than you produced. I think there are, you know, well over 5000 units, or I think there are over 5000 units in inventory. Could we see deliveries significantly above that 9000 production number? I think you did 239 deliveries greater than production this quarter. Should we expect something similar to that to go through the rest of the year, or could it actually be higher? Well, we haven't guided on that. Naturally, I'd love to see it.

Speaker Change #142: Okay. That's very helpful. Just one follow up.

Speaker Change #142: <unk> 9000 vehicles produced <unk> produced this year.

Speaker Change #142: Ready delivered more than you produced I think theirs.

Speaker Change #142: Well over 5000 units or I think there are over 5000 units.

Speaker Change #142: Inventory could we see deliveries significantly above that 9000 production number I think you did $2 39 deliveries greater than production. This quarter should we expect something similar that go through the rest of the quarter the euro.

Speaker Change #142: Higher.

Speaker Change #142: Well.

Speaker Change #143: We haven't guided on that naturally I'd love to see it what is crucial here is the key messages that management is taking prudent steps in balancing.

Speaker Change #143: Net.

Speaker Change #143: <unk> with deliveries so that we don't get an undue amount of inventory and have that working capital tied up this is prudent from management.

Operator: We'll take our next question, please. Our next question comes from the line of Itay Michaeli. City, Yolanda.

Speaker Change #146: Thanks to our now we'll take our next question. Please.

Speaker Change #144: Our next question comes from the line of.

Speaker Change #145: Okay Michael.

Michael: <unk> with Citi. Your line is open.

Itay Michaeli: Ah, great, thanks, uh, hi everyone. Um, just two questions for me. First, Peter, can you just give us an update on, uh, supplier readiness for the gravity launch, you know, what the progress you're making there, and just how you're feeling about that. And then maybe a second question, just going back to the gross margin. I know there's a lot of noise in that number. I was hoping you could talk a little bit about what you're seeing across trends for kind of variable, you know, margins, just kind of looking at parts, material, freight, and warranty, excluding kind of labor and overhead costs. If you can give us a little bit of a sense of how that's trending, that would be helpful too. Thank you. Thanks, Itay. Yeah, so I'm personally overseeing the march towards the gravity start of production. Literally in this room every morning; my morning starts with a review of the status.

Michael: Great. Thanks, Hi, everyone.

Peter Dore Rawlinson: And in order to ready the program, we need to sync three activity streams, the readiness of the gravity product, the readiness of the factory, the Arizona factory, and the build out of that, and the installation of all the equipment. And the third thing you covered in your question was the readiness of the supply base. And absolutely, we're all over this. We have literally a few hundred suppliers with thousands of parts, truly drawn from some of the best suppliers right around the world. And that is something we're managing very closely. And to that aim, I want this process to be really, super transparent.

Michael: Just two questions for me first Peter can you just give us an update on.

Michael: Supplier readiness for the gravity launch what would the progress youre, making there and just overall, how you're feeling about that and then maybe a second question just going back to the gross margin I know, there's a lot of noise in that number I was hoping you could talk a little bit to what youre seeing.

Michael: Cross trends for kind of variable margins to just kind of looking at parts material freight and warranty excluding kind of labor and overhead costs. If you can give us a little bit of sense of how that's trending that would be helpful. Too. Thank you.

Thanks, Jose yes so.

Jose: I'm personally.

Jose: And overseeing the March towards the gravity start of production are literally in this room every morning. My mind My morning starts with a review of the status and in order to ready the the program, we need to sync spree activity streams, the readiness of the gravity product the readiness of the fab.

Jose: <unk>, Arizona factory and the build out of that and the installation of all equipments and the third thing you cover. Your question was the the readiness of the supply base and absolutely. We're all over this we have literally a few hundred suppliers with thousands of parts truly drawn from some.

Jose: The best suppliers right round the world and that is something we are managing very closely and to that aim I want this process to be really super transparent. So I personally commission the team to make a series of videos, which will tell the tale, but everybody is following the company the path to gravity.

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

Jose: Ready to gravity to series is our launch that just last week and Thats going to price those three connect.

Jose: Connecting our pillars, the product the factory readiness and supply chain readiness, but we've got a major advantage at this time with this product because we're not trying to do it coming out of a pandemic. So there should be a lot more opportunity for us to do SQL.

Peter Dore Rawlinson: So there should be a lot more opportunity for us to do SQA, which is Supplier Quality Awareness and Audit. And we have our supplier quality engineering teams visiting those suppliers and checking, verifying, and validating the readiness for starter production late this year. Now, regarding margins, I would like to defer the question to Gagan, please. Yeah, thanks, Peter. So on the gross margin, we have been working very hard with both the supplier side of things and then taking costs out of the business. And, you know, looking at the bomb cost first, it is a significant effort.

Jose: As supplier quality awareness audits.

Jose: And we have a supplier quality engineering teams visiting those suppliers and checking and verifying and validating their readiness who started production late this year now regarding margins I would like to add.

Jose: Further question too.

Jose: To Gagnon please yes, thanks Peter.

Gagnon: On the gross margin, we have been working very hard with both the supplier side of things and then taking cost out of the business.

Gagnon: And looking at the bond costs first.

Gagnon: It is a significant effort we are continuously bringing thousands of dollars out from the cost.

Gagnon: One thing this quarter, specifically I want to call about technology.

Gagnon: Our car also has its lowest cost of ownership and if you look at in the Investor deck, we added slides seven and slide eight explaining how our card has a lowest cost and.

Gagan Dhingra: And if you look at the investor deck, we added slides seven and eight explaining how our car has the lowest cost. And it will be good for you to look at that. And then in parallel, you know, our cost optimization team, this team is challenging each and every one and also for every dollar value. And I'm personally leading this initiative with support from Peter. But what does that mean to us?

Speaker Change #148: It could be good for you to look at that.

Speaker Change #148: And then in parallel.

Speaker Change #148: Our the cost optimization team.

Speaker Change #148: This team is challenging each and every one and also for every dollar value and I am personally leading this initiative with support from Peter.

Gagan Dhingra: We're able to significantly bring the logistics cost down. We are looking for more and more opportunities. Now, it's a matter of scale because we today are spending a significant amount of money on the fixed cost. Even on the variable cost, we identify more opportunities, and it will help us because we look at it from the suppliers' perspective also. They also allocate their fixed overhead to the volume they deliver. But we have a part to go there too. And with gravity coming late 2024, we're getting close and close to our capacity, and that will give us enough operation or operating leverage. Thanks, Tawanda.

Speaker Change #148: What does that mean to us we are able to significantly bring the logistic cost down.

Speaker Change #148: Looking more and more opportunities now it's a matter of scale because we are spending significant amounts of money on the fixed cost.

One on the variable costs, we identified motive, which entities and it will help us because look at from suppliers perspective also they're also allocate their fixed.

Speaker Change #148: <unk> fixed overhead to the volume that deliver but we have got to go there and with gravity coming late 'twenty 'twenty, four we're getting closer and closer to our capacity and that will give us and flip operation operating leverage.

Operator: Can we move to our next question? Thank you. Our next question comes from the line of Andres Sheppard with Canada Fitzgerald. The line is open. Hey, everyone. Good afternoon.

Speaker Change #149: Thanks, Melinda can we move to our next question. Thank you. Our next question comes from the line of Andrew Shepherd with Cantor Fitzgerald. Your line is open.

Andres Juan Sheppard: Congratulations on the quarter and thanks for taking our questions. Um, Peter, I wanted to follow up on maybe deliveries to Saudi Arabia, trying to get a sense if it's possible to maybe quantify it a little bit as to how that agreement will develop, you know, later this year, next year and onwards. I think it has in the past.

Andres Sheppard: Hey, everyone. Good afternoon, congratulations on the quarter and thanks for taking our question.

Andres Sheppard: Peter I was just I wanted to follow up on maybe deliveries to Saudi Arabia.

Andres Sheppard: Trying to get a sense is it possible to maybe quantify it a little bit as to how that agreement will develop later this year next year and onwards, I think in the past.

Peter Dore Rawlinson: You had mentioned that, uh... Please correct me if I'm wrong, but that a lot of these deliveries, including the gravity and the midsize high volume model, have yet to reach their SOP. So, just wondering.

Andres Sheppard: You had mentioned that.

Andres Sheppard: And please correct me, if I'm wrong, but that a lot of these deliveries would include the gravity and the mid size high volume model, which have yet to reach their <unk>. So just wondering.

Andres Sheppard: Are we able to quantify what these deliveries to Saudi Arabia will be this year next year as you work your way up to the gravity and yet.

Andres Sheppard: Yes.

Speaker Change #150: We're not planning to guide on the split in the future, but our deliveries in Q1 exceeded.

Speaker Change #150: 500 units.

Speaker Change #150: <unk>.

Speaker Change #150: I mean, I'm very confident that we've got equal demand for for our products in Saudi particularly for the SUV, that's going to be quite an interesting market.

Peter Dore Rawlinson: That's going to be quite an interesting market. But again, I'm not in a position to guide right now on these. And we haven't decided yet whether we'd guide on that specific split either, Andrew. Okay, got it. That's a whole lot. So over 500 deliveries into one were to Saudi Arabia.

Speaker Change #150: But again.

Speaker Change #150: Yeah.

Speaker Change #150: I'm not in a position to guide right now on lease.

Speaker Change #151: We haven't decided yet with regard on that specific splits either Andrew.

Peter Dore Rawlinson: Yeah, so that's helpful. Okay. And then just a question on liquidity. You know, you touched on the updated liquidity, obviously, the $1 billion Capital Race fortifies the balance sheet. In your presentation, you mentioned that liquidity on hand is sufficient to fund a business. I believe it's until the second quarter of next year.

Andres Sheppard: Okay got it thats helpful. But go over 500 deliveries in Q1 award.

Andres Sheppard: Saudi Arabia.

Andres Sheppard: Yes.

Speaker Change #152: That's helpful. Okay.

Speaker Change #152: And then just quick question on <unk>.

Speaker Change #152: Liquidity.

Speaker Change #152: You touched on.

Speaker Change #152: The updated liquidity, obviously, the $1 billion recent capital raise fortifies the balance sheet in your presentation. You mentioned that liquidity on hand is sufficient to fund the business I believe it until second quarter of next year. So I guess my question is.

Peter Dore Rawlinson: So I guess my question is, you know, as you're thinking about your next capital race, do you. The extent of the ability you can answer, do you foresee that coming from the PIF, or perhaps would that be from external capital? I guess what I'm asking is, with $6.4 billion in funding from the PIF so far this year to date, do you foresee a situation where the next race may also be with them or elsewhere?

Speaker Change #152: As Youre thinking.

Speaker Change #152: For your next capital raise do you.

Speaker Change #152: To the extent an ability you can answer do you foresee that.

Speaker Change #152: Coming from from the TIAA F or perhaps with Abbvie from external capital I guess, what I'm asking is with $6 4 billion in funding from the Piaf's, so far year to date.

Speaker Change #152: You foresee situations, where the next race may also be with them or elsewhere. Thank you.

Peter Dore Rawlinson: Thank you. Well, look, we're a technology company. We're on a growth trajectory, and it's a capital-intensive endeavor. We know that.

Speaker Change #153: Well look.

Speaker Change #153: We're a technology company, we're on a growth trajectory and it's a capital intensive endeavor, we noted that and so all I can I can say is that we will take an entrepreneurial opportunistic view of raising capital when the business requires it we.

Speaker Change #153: It's very very.

Speaker Change #153: Aware and appreciative of the very special relationship.

Speaker Change #153: And the steadfast support that the public investment fund has shown us and gone every single round supporting us to date.

Speaker Change #153: And I think that puts us in a very strong position. It takes us past the start of production of gravity and well into next year and I think that's an enviable position it puts us in a very strong.

Speaker Change #153: Positioned financially.

Speaker Change #154: Thanks, Tania can we move to the next question. Please.

Speaker Change #154: Our next question comes from the line of Tobias Beth with waiver on Atlantic Your line is open.

Tobias Beith: Hi, good evening and thanks for your time I have two questions, please and I'll ask them separately.

Tobias Beith: Through 2024 on the.

Tobias Beith: The expectation is that production processes will become more vertically integrated as you continue to build out the phase two expansion of <unk>.

Tobias Beith: Can you confirm whether this will increase losses in the near term while volumes are subscale.

Yes, so as I said in the prepared remarks, we typically don't guide gross margin because of certain controllable and non controllable factors. However.

Tobias Beith: In Q2, I expect that gross margin will remain flat, despite the impact of the full quarter impact of pricing actions we took in Q1. In Q1, the impact was only for part of the quarter. Scaling back to the second half of the year, now purchasing gravity components ahead of production, which will result in an increase in inventory, i.e., result in LCNRV, and also higher depreciation as a result of phase two activation, we expect to have some negative impact on the gross margin. But then, you know, we have Gravity scheduled for production late this year.

Tobias Beith: I can provide some directional color.

Tobias Beith: In Q2.

Tobias Beith: I expect that gross margin will remain flat.

Tobias Beith: Despite the impact the full quarter impact of pricing actions. We took in Q1 in Q1, the impact of asphalt part of the quarter.

Tobias Beith: Scaling back the second half of the year now, but case of gravity components ahead of production.

Tobias Beith: Which will result in increase in inventory a result in <unk> and also higher depreciation as a result of phase two activation, we expect to have some negative impact on the gross margin, but then we have greater scheduled for production late this year as we move to next year we.

Gagan Dhingra: As we move to next year, we expect things to change significantly. Okay, but, sorry, just to ask my question slightly differently. On a variable margin basis, do expect higher vertical integration. Decrease the Variable Mod, on both air and gravity.

Tobias Beith: Expect tanks to change significantly.

Speaker Change #155: Okay, but sorry, just to ask my question slightly differently on a variable margin basis do you expect the higher vertical integration to decrease the variable margins in the near term.

On both and gravity.

Gagan Dhingra: Yeah, that's a great question. Now, it is a game of scale. We're getting better at contribution margin, trim by trim. Now, the bomb cost, freight, and certain overhead. Part of contribution margin gets significantly impacted when you have a low volume, and with scale, it significantly improves because suppliers also amortize their fixed costs based on the volume they deliver. It's a matter of scale.

Speaker Change #156: Yes, that's a great question now it is a game of scale.

Speaker Change #156: We're getting better on contribution margin trimmed by trim.

Speaker Change #157: Now the Bom cost.

Speaker Change #158: And certain overheads.

Speaker Change #158: A lot of contribution margin get significantly impacted when you have a low volume.

Speaker Change #158: And with scale it significantly improves.

Speaker Change #158: Nickel suppliers also amortize the fixed cost based on the volume they deliver.

Gagan Dhingra: The more we get close to our capacity, our margins get much better. Okay, understood. And then, Just to return to the question that Adam and Itay asked, if I exclude the impairment charge from your cost of goods sold and make a simplistic assumption that all of the DNA charge is within COGS, then in the first quarter of this year, underlying costs per unit delivered actually increased 5% sequentially. And given that delivery volume was 13% higher, with some of these cars presumably benefiting from last year's overproduction. I was wondering if you could comment on what happens. Yeah, it is; it is a factor of incentive as well.

Speaker Change #158: It's a matter of scale.

Speaker Change #158: More we get close to our capacity our margins got much better.

Speaker Change #159: Okay understood and then.

Speaker Change #159: Just to turn back to the question that at the minute towns asked if I exclude the impairment charge from your cost of goods sold and make a simplistic assumption that all of the D&A charges within Cogs than in the first quarter. This year underlying costs per units delivered.

Speaker Change #159: Actually increased 5% sequentially.

Speaker Change #159: And given the delivery volume was 13% higher with some of these costs, presumably benefiting from last year's over production.

Speaker Change #159: I was wondering if you could comment on what happened.

Gagan Dhingra: So if you look at, we took some pricing actions in the current quarter. So it's because of the pricing actions, which were largely offset by the cost reduction in activity. Okay, but the, sorry, the pricing actions. Surely they're not in your cogs anymore because I've excluded the impairment chart. Yes, but you know, there are multiple things that go into that factor.

Speaker Change #160: Yes. It is it is a factor of incentive as well. So if you look at where it took some pricing actions in the current quarter.

Speaker Change #160: So it's because of the pricing actions, which were largely offset by the cost reduction activities.

Speaker Change #160: Okay.

Alright, the pricing actions.

Speaker Change #160: Surely there or not in your Cogs anymore, because I've excluded the impairment charge.

Gagan Dhingra: So when we say pricing action, you know, we basically, like for Pure and Turing, the pricing that we offered, and plus Mix, both together play a significant role in that component. Alright, this has been most helpful. Thank you very much. Thanks, Tawana.

Speaker Change #160: Yes, but it'll it's multiple things that go in that factor so when we say pricing actions.

Speaker Change #160: We basically.

Speaker Change #160: Like for pure and curing.

Speaker Change #160: Pricing that we offered.

Speaker Change #160: <unk> plus mix, both together play a significant role in that component.

Speaker Change #161: Alright. This has been most helpful. Thank you very much for your time.

Speaker Change #162: Thanks to them that can we move to the next question. Please.

Operator: Can we move to the next question, please? Our next question comes from the line of Stephen Fox with Fox Advisors. Your line is open. Hi. Thanks for all the color this evening.

Speaker Change #162: Our next question comes from the line of Steven Fox with Fox Advisors. Your line is open.

Steven Fox: I just had a question on the push to have more third-party related sales of hardware and software. I guess I was wondering if, over the last few quarters, there's been an increasing number of bottlenecks in getting to the finish line on some of these deals. I'm curious just because it seems like you've proven out some cost advantages that you can provide as a third party from a third-party standpoint, and the pressures on OEMs to get their bomb costs down have only increased in the last, you know, year to date.

Steven Fox: Hi, Thanks for all the color. This evening I just had a question on.

Steven Fox: The push to have more third party related sales of hardware and software.

Steven Fox: I guess I was wondering if you would say over the last few quarters, whether there has been an increasing number of bottlenecks and getting to the finish line on some of these deals.

I'm curious just because it seems like you've proven out some cost advantages that you can provide as a third from a third party standpoint, and the pressures on Oems to get their bom costs down if only increase in Alaska.

Steven Fox: Year to date.

Steven Fox: Any color on that and your progress going forward it would be helpful. Thanks.

Speaker Change #163: That's an interesting point.

Speaker Change #163: I would say this that this is a timescale as a cadence because a chronology associated with any such arrangement with the traditional <unk>.

Peter Dore Rawlinson: There's a natural cadence to the pace they work and operate, and also, there's this sort of impending regulatory overhang in terms of the drivers for their transition to the sustainable mobility model. So all I can say is just watch this space. We need patience when we're talking to large automakers. Okay, thank you very much. Please stand by for our next question. Our next question comes from the line of James Picariello with BNP Paribus. Your line is open. Hey everyone, this is Jake on for James.

Speaker Change #163: There's a natural cadence to the pace, they work and operate and own so.

Speaker Change #163: Does this sort of impending regulatory overhang in terms of the drivers for that transition to sustainable mobility model. So all I can say is just watch this space, we need patients when we're talking to launch automakers.

Speaker Change #164: Okay. Thank you very much.

Speaker Change #165: Please standby for any question.

Speaker Change #165: Our next question comes from the line of James <unk> with BNP Paribas. Your line is open.

Speaker Change #165: Hello, everyone. This is Jake on for James.

Operator: Uh, so if I just look at your liquidity and the implied cash burn with the five billion dollars last... second quarter of 2025, it looks like the implied cash burn has stepped up from roughly $900 million in the previous commentary to over $1 billion now. So how should everyone think about cash burn really through next year once you get through the launch of the grant? Yeah, so if you look at, you know, the multiple things that go into cash. One is the capital investment that we're making. As we're guided, we expect to spend around $1.5 billion on our investments, which is an expansion in Arizona, taking from 30,000 installed capacity to 90,000 because of paint shops, stamping, body, and white And then M2, which is in Saudi Arabia, where we are making a significant investment, building our CBU facility. So that capital expenditure plays a significant role there.

Jake: So let's look at your liquidity.

Jake: Cash burn with a $5 billion lasting into the second quarter of 2025.

Jake: It looks like the implied cash burn stepped up from roughly $900 million in your previous commentary to over.

Jake: $1 billion now so how should everyone to think about.

Jake: Cash burn.

Jake: From next year once you get through the one once the gravity.

Speaker Change #166: Yes. So if you look at the multiple things slow in the cash one one is the capital investment that we're making.

Speaker Change #166: As we have guided.

Speaker Change #166: We expect to spend around $1 5 billion.

Speaker Change #166: In our investments which is.

Speaker Change #166: Expansion in Arizona, taking from 30000 installed capacity to 90000.

Speaker Change #166: Because of paint shops tamping body in white coming later this year.

James Picariello: And also in the next year, we have a significant amount of capital expenditure that will continue. Got it. It's very helpful.

Speaker Change #166: And then <unk>, which is in Saudi Arabia.

Speaker Change #166: We are making significant investment building, our CPU facility. So net capital expenditure of play a significant role there and also in the next year, we have significant amount of capital expenditures that will continue.

Gagan Dhingra: And then just following up on John's question about the midsize, more mass market model. Have you guys thought about providing some more? Thank you. Well, that's an interesting point.

Speaker Change #167: Got it that's very helpful. And then just following up on John's question about the mid size more mass market model have you guys thought about I'll provide more.

Speaker Change #167: Just detail on it maybe teaser pictures, a little earlier to try to draw from.

Speaker Change #167: Just some more interest from a broader consumer base.

Speaker Change #167: You can potentially opening the door reservation to.

Speaker Change #167: Just starting tomorrow liquidity. Thank you.

Speaker Change #168: Well, that's an interesting point I actually think that the consumer.

Speaker Change #169: Has been ill served by some players in this space.

Speaker Change #169: Bye.

Taking reservations way way ahead of time and a very artificial manner. What we believe is a much greater degree of transparency.

Speaker Change #169: And.

Speaker Change #169: Really getting closer to that product being an absolute reality.

Speaker Change #169: Remember goods.

And any such reservations and money taken is a false form of liquidity because it's something we would have to put in escrow anyway. It doesn't really it's not it's not true liquidity and we believe an absolute transparency and showing the product.

Speaker Change #169: A realistic specification as were doing say with gravity, we've not taken reservations deliberately until we get closer to the start of production. This is.

Speaker Change #169: I'll also say that we've adopted and we will let you know that time.

Speaker Change #169: In the future when we open a waiting list for gravity and we're not even close to I don't think it's right to be opening up reservations on a product that is over two years out.

Speaker Change #169: I just don't think I think it serves the consumer and it's something that I think there's a transparency that's lacking from that.

Operator: Thank you. Our next question comes from the line of Stephen Gengaro with Steeple. Your line is open.

Speaker Change #170: Thank you.

Speaker Change #170: Our next question comes from the line of Stefan Kingara with Stifel. Your line is open.

Stephen David Gengaro: Uh, thanks. Thanks for taking my question. Just going back to a question about cash burn, can you give us any sense as to getting to the midsize launch, sort of the cadence of CapEx necessary in 25, 26 times.

Speaker Change #170: Yes.

Stefan Kingara: Thanks, Thanks for taking my question.

Stefan Kingara: Just going back to a question about the cash burn.

Stefan Kingara: Can you give us any sense as we think.

Stefan Kingara: Getting to the midsized launch.

Stefan Kingara: Sort of the cadence of <unk>.

Stefan Kingara: Capex necessary.

Stefan Kingara: 25 26 timeframe.

Peter Dore Rawlinson: Well, I mean, it's interesting; we haven't guided on that. But I mean, we are in a very good position, which will see us beyond gravity starter production. We have some amazing incentives from the Kingdom of Saudi Arabia for the establishment of our factory there, our AMP2 facility.

Speaker Change #172: Well I mean, it's interesting when we haven't guided on that.

Speaker Change #172: But.

Speaker Change #172: I mean.

Speaker Change #172: We are in a in a very good position, which will see us beyond gravities stone to production, we have some amazing incentives from the kingdom of Saudi Arabia for a center of our factory that are empty facility and that's where we're going to put in the mid size.

Peter Dore Rawlinson: And that's where we're going to put in the mid-sized product to start with. Great. Thank you. And just a quick follow up on the gravity order question. How soon before production begins? Do you open up gravity orders? Um, it's an interesting point. I think that, as I say, we can look forward to us opening a waiting list when we feel that, in absolute transparency, we can release more specific details of the trim and specifications of that vehicle. I don't want to do it in an environment of uncertainty.

Product to start with.

Speaker Change #173: Great. Thank you and just a quick follow up on the gravity order question.

Speaker Change #173: How soon before production begins.

Speaker Change #174: You open up gravity orders.

Speaker Change #175: It's an interesting point I think that as I say.

Speaker Change #175: We can look forward to opening a waiting list when we feel that an absolute transparency. We can release more specific details of the trim and specifications of that vehicle I don't wanted to do it.

Peter Dore Rawlinson: Gravity is scheduled for the start of production later this year, and we're on that runway now. Every day counts as we build up a crescendo to that launch, and we will let you know. Watch this space. Great. Thank you, Peter. Thank you. Thank you. So this concludes Lucid's first quarter 2024 earnings conference call. Thank you all for joining us today, and you may now disconnect.

Speaker Change #175: In an environment of our pass its a gravity is schedule for startup production later this year and.

Speaker Change #175: We're on runway now everyday counts as we build up a crescendo to that launch and we will let you know watch this space.

Speaker Change #176: Great. Thank you Peter.

Speaker Change #177: Thank you.

Speaker Change #178: Okay. Thank you. So this concludes <unk> first quarter 2024 earnings conference call. Thank you all for joining US today and you may now disconnect.

Q1 2024 Lucid Group Inc Earnings Call

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