Q4 2024 Lucid Group Inc Earnings Call

A question and answer session.

To ask the question during the session you will need to press star one on your telephone.

But then her automated message advising your hand is raised.

To withdraw your question. Please press star one again.

I would now like to turn the conference over to Maynard, Sir you may begin.

Maynard: Thank you and welcome to lucid group's fourth quarter 2024 earnings call. Joining me today are Mark Winter Hoff, our interim CEO, Doug <unk> Senior Vice President of Finance and principal accounting officer, and <unk> <unk> CFO.

This is going to be a song...

Speaker Change: Before handing the call over to Mark Let me remind you that some of the statements on this call include forward looking statements under Federal Securities Laws. These include without limitation statements regarding the future financial performance of the company production and delivery volumes vehicle and products Studios and service networks financial and operating outlook and guidance.

Speaker Change: Ohmic policy and industry trends company initiatives and other future events. These statements are based on our predictions and expectations as of today and actual events of results may differ due to a number of risks and uncertainties. We refer you to the cautionary language in the risk factors in our most recent filings with the SEC and.

Speaker Change: Forward looking statements on page two of our investor deck available on the Investor Relations section of our website at IR Dot lucid motors Dot com and.

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 the Investor deck.

Mark: With that I'd like to turn the call over to <unk> interim CEO Mark <unk> Mark. Please go ahead.

Without limitation statements regarding the future financial performance of the company production and delivery volumes vehicle and products Studios and service networks financial and operating outlook and guidance macroeconomic policy and industry trends company initiatives and other future events. These statements are based on our predictions and expectations as.

Speaker Change: Thank you May note and thank you everyone for joining us in our 2024 and fourth quarter earnings call.

Speaker Change: This is my first time speaking to you as interim CEO I am honored the board has named me to this role a pivotal and exciting time in the company's journey.

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 in the risk factors in our most recent filings with the SEC and the forward looking statements on page two of our investor deck available on the Investor Relations section of our website at IR Dot lucid motors.

Speaker Change: It's a true pleasure to be here.

Speaker Change: Our vision progress and the remarkable strides we have made in 2024.

Speaker Change: Before I get to my prepared remarks, I'd like to first thank Peter.

Com in.

In addition management will make reference to non-GAAP financial measures during this call.

Peter founded lose it as you know it today, helping to bring the world and most advanced <unk>.

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 the Investor deck.

Speaker Change: Knowledge, even lucid air.

Speaker Change: The world's best for them and the lucid gravity and SUV was truly no compromise.

Speaker Change: Under his leadership.

Mark: With that I'd like to turn the call over to lucid interim CEO Mark <unk> Mark. Please go ahead.

Speaker Change: <unk> built the most advanced Greenfield EV manufacturing plant in the U S.

Speaker Change: Built assurance Copland in Saudi Arabia.

Mark: Thank you May note and thank you everyone for joining us in our 2024 and fourth quarter earnings call.

Speaker Change: The company's first technology supply agreement with an OEM.

Speaker Change: And put us on a determined path to further advance the state of the art of electrical cars.

Mark: This is my first time speaking to you as interim CEO I am honored the board has named me to this.

Speaker Change: With our next generation advanced powertrain and the mid sized platform.

Mark: Pivotal and exciting time in our company's journey.

Speaker Change: I could probably spend entire or speaking to his accomplishments, but above all.

Mark: It's a true pleasure to be here and share our vision progress and the remarkable strides we have made in 2024.

Speaker Change: Peter put together an incredible team to advance the company's mission and I'm honored to lead this team into the next phase of its journey.

Mark: Before I get to my prepared remarks, I'd like to first thank Peter.

Speaker Change: This six nicely into my delight to introduce today lucid CFO to sequencing.

Peter: Peter founded lose it as you know today, helping to bring the world's most advanced keep click technology lucid air.

Speaker Change: To fit brings very strong financial experience as a CFO that aligns very well with our long term strategy.

Mark: The world's best for them and.

Mark: And the lucid gravity and SUV with truly no compromise.

Speaker Change: He has decades of experience in strategic finance and operational transformation with a proven ability to align financial strategy with business objective as.

Mark: Under his leadership.

Mark: <unk> built the most advanced Greenfield EV manufacturing plant in the U S.

Mark: Built assurance car plant in Saudi Arabia.

Mark: The company's first technology supply agreement with an OEM.

Speaker Change: As we scale our operations efficiently.

Speaker Change: Joined us a few weeks ago, but it is already getting into the thick of it.

Mark: And put us on a determined path to further advance the state of the electrical cars.

Speaker Change: Would you like to give a brief introduction.

Mark: With our next generation advanced powertrain and the mid size platform.

Speaker Change: Thanks, Mark and Hello, everyone I couldnt be more excited to be here at Youll see that such reports enrollment not just for the company, but for the <unk>.

Mark: Yeah.

Mark: I could probably spend the entire hour speaking to his accomplishments.

Mark: By industry, we are in the middle of a once in a generation shift towards electrification. This is a secular shift and lease it is at the leading edge of that transformation.

Peter: Well Peter put together, an incredible team to advance the company's mission and I'm honored to lead this team into the next phase of its journey.

Speaker Change: This six nicely into my delight to introduce today <unk> CFO <unk> <unk>.

Mark: What immediately struck me about lucid is that this isn't just another company. It's a company built on engineering excellence modernization and a clear vision to redefine the future of sustainable mobility and Thats exactly one of them here.

Speaker Change: Two brings very strong financial experience as a CFO and aligns very well with our long term strategy.

Speaker Change: He has decades of experience in strategic finance and operational transformation of the proven ability to align financial strategy with business objectives.

Mark: Throughout my career I've had the companies navigate through complex transformation growth expansions and large scale operational turnarounds.

Mark: Work in industries, where disruption competition, a rapid change where constant realities and I've seen firsthand what it takes for a company to go from a visionary I'd to financially strong globally scaled business. The key to the success is about smart capital allocation operational efficiency and making sure.

Speaker Change: We scale our operations efficiently.

Speaker Change: He joined US a few weeks ago, but it is already getting into the thick of it too.

Speaker Change: Do you like to give a brief introduction.

Speaker Change: Thanks, Mark and Hello, everyone I couldnt be more excited to be here at Youll see that such with pivotal enrollment not just for the company, but for the entire industry.

Mark: We set up for long term profitable growth.

Speaker Change: We are in the middle of a once in a generation shift towards electrification. This is a secular shift and lucid is at the leading edge of that transformation.

Mark: At lucid, we have world class technology industry, leading efficiency and a brand that stands for performance and luxury.

Mark: But as we move into the next phase.

Speaker Change: What immediately struck me about <unk> is that this isn't just another company. It's a company built on engineering excellence more innovation and a clear vision to redefine the future of sustainable mobility and Thats exactly what im here.

Mark: <unk> production optimizing operations and accelerating growth, bringing financial discipline will be more critical than ever.

What really excites me is the opportunity ahead, the easy market is still in its early days and as demand continues to grow the real challenge is scaling scaling efficiently operating smartly and driving sustained financial performance, that's where my focus will be ensuring we scale.

Speaker Change: My career I've had the companies navigate through complex transformation growth expansions and launched and operational turnarounds.

Speaker Change: I have worked in industries, where disruption competition rapid change where constant realities and I've seen firsthand what it takes for a company to go from a visionary IV to.

Mark: Efficiently balancing growth with operational excellence driving financial discipline on smart capital allocation, while making sure we invest in the right areas to maximize long term value and strengthening our financial strategy. So that we're not just building great cost, but also building a sustainable.

Speaker Change: Two financially strong globally scaled business.

Speaker Change: The key to the success is about smart capital allocation operational efficiency and making sure we set up for long term profitable growth.

Speaker Change: Lucid, we have world class technology industry, leading efficiency and a brand that stands for performance and luxury.

Mark: Profitable company that delivers for our investors and stakeholders.

Mark: I've had the chance to drive the lucid and experienced a new CD gravity and I can confidently say that these are game changing vehicles, but great projects alone don't make a great company. It takes strong execution, a clear financial roadmap and the right leadership to turn potential into sustain.

Speaker Change: But as we move into the next phase scaling production optimizing operations and accelerating growth, bringing financial discipline will be more critical than ever.

Speaker Change: What really excites me is the opportunity ahead. The EV market is still in its early days and as demand continues to grow the real challenge is scaling scaling efficiently operating smartly and driving sustained financial performance, that's where my focus will be ensuring we scale.

Mark: <unk> success.

Mark: That's why I'm here and Thats, why I am committed to delivering over the coming weeks and months I look forward to engaging with our investors analysts and key stakeholders sharing more about our strategy and working with this incredible team to make lucid a true powerhouse engine industry.

Speaker Change: Efficiently balancing growth with operational excellence, driving financial discipline, and smart capital allocation, while making sure we invest in the right areas to maximize long term value and strengthening our financial strategy. So that we're not just building great cars, but also building a sustainable.

Mark: I am honored to be here and I can't wait to get started thank you.

Mark: Thank you terrific.

Mark: I also want to take a moment to give a special thank you to guidance and growth for.

Mark: For his great work as our interim CFO.

Speaker Change: Profitable company that delivers for our investors and stakeholders.

Mark: <unk> is an incredible example of lucid experienced internal talent that we can utilize to maintain seamless continuity.

Speaker Change: I've had the chance to drive the lucid and experienced a new CD gravity and I can confidently say that these are game changing vehicles, but great products alone don't make a great company. It takes strong execution clear financial road map and the right leadership to current potential into sustain.

Mark: I'd also like to congratulate him on his promotion and expanded role as senior Vice President of Finance and accounting. In addition to his role as principal accounting officer.

Mark: We look forward to your continued contributions to loosen I believe to fix edition and Gergen's promotion set the finance organization up for continued success in accelerating our strategic priorities that lucid.

Speaker Change: <unk> success.

Speaker Change: That's why I'm here and Thats, why im committed to delivering over the coming weeks and months I look forward to engaging with our investors analysts and key stakeholders sharing more about our strategy and working with this incredible team to make lucid a true powerhouse engine industry.

Mark: Now turning to the business.

Mark: 2024, it wasn't incredible year for lucid.

Mark: We established ourselves as the preeminent leader in EV technology, producing the longest range for office charging most efficient sedans on the market achieving a market leader five miles per kilowatt hour.

Speaker Change: I am honored to be here and I can't wait to get started thank you.

Speaker Change: Thank you terrific.

Speaker Change: I also want to take a moment to give a special thank you to guidance and growth for.

Speaker Change: We saw four consecutive quarters of record deliveries Cigna.

Speaker Change: For his great work as our interim CFO.

Speaker Change: <unk> is an incredible example of lucid experienced internal talent that we can utilize to maintain seamless continuity.

Speaker Change: Significant year over year improvements in gross margin at our working capital delivered our first lucid gravity Suvs and strengthened our balance sheet.

Speaker Change: I'd also like to congratulate him on his promotion and expanded role as senior Vice President of Finance and accounting. In addition to his role as principal accounting officer.

Speaker Change: I think it's fair to say that our say do ratio was very good.

Speaker Change: These accomplishments are a testament to the hard work and the support of the <unk> team, our supply chain partners and our strategic partner <unk>.

Speaker Change: We look forward to your continued contributions to loosen I believe two fixed position and guidance promotion sent the finance organization up for continued success in accelerating our strategic priorities that lucid.

Speaker Change: We are grateful for all of their continued support.

Speaker Change: Now to the numbers.

Speaker Change: In 2024, we produced 9000 and 2009 vehicles with deliveries of 10241.

Speaker Change: Now turning to the business.

Speaker Change: 1024, it wasn't incredible year for lucid with.

Speaker Change: We established ourselves as the preeminent leader in EV technology, producing the longest range for us the strategy most efficient sedans on the market achieving a market lead at five miles per kilowatt hour.

Speaker Change: Our record year.

Speaker Change: But let me put this in context for you.

Speaker Change: In 2024, the lucid air was the third best selling <unk> in its segment in the U S. According to <unk> intelligence.

Speaker Change: We saw four consecutive quarters of record deliveries Cigna.

Speaker Change: But that does not reflect the momentum begin because we were the number one best selling EV in the back half of 2024 Ford segment.

Speaker Change: Significant year over year improvements in gross margin in our working capital delay.

Speaker Change: <unk> delivered our first lucid gravity, Suvs and strengthened our balance sheet.

Speaker Change: And the third best selling vehicle when including all gas powered vehicles in the segment.

Speaker Change: I think it's fair to say that our say do ratio was very good.

Speaker Change: I think business worth repeating.

Speaker Change: These accomplishments are a testament to the hard work and to support the looser team our supply chain partners and our strategic partner the PAF we.

Speaker Change: The lucid air was the number one best selling even in the second half of 2020 for fourth segment.

Speaker Change: And the third best selling vehicle among all vehicle in its class, including gas powered vehicles.

Speaker Change: We are grateful for their continued support.

Now to the numbers and.

Speaker Change: Okay.

Speaker Change: In 2024, we produced 9000 and 2009 vehicles with deliveries of 10241.

Speaker Change: Think about that for a second.

Speaker Change: We outsold many of the most storied and well known brands in the automotive industry in both the EV and the gas market.

Speaker Change: Our record year.

Speaker Change: But let me put this in context for you.

This is a testament to how much customers low looser there.

Speaker Change: In 2024, the lucid air was the third best selling event in its segment in the U S. According to <unk> intelligence.

Speaker Change: I love, how it drives performance, it's drive ability the design the charging speed the interior space and the range of course.

Speaker Change: But that does not reflect the momentum begin because can be where.

Speaker Change: Now I'll tell you why this is so important as we enter 2025.

Speaker Change: The number one best selling even in the back half of 2024 Ford segment.

Speaker Change: Because everything that customers love about the air we brought to the lucid gravity.

Speaker Change: And the third best selling vehicles, when including all gas powered vehicles in the segment.

Speaker Change: This is why we are tremendously optimistic about the looser gravity in the SUV segment.

Speaker Change: I think this is worth repeating.

Speaker Change: The lucid air was the number one best selling even in the second half of 2020 for fourth segment.

Speaker Change: In the coming weeks, we expect virtually all of our studios to have showroom and test drive cars.

Speaker Change: And the third best selling vehicle among all vehicle in its class, including gas powered vehicles.

Speaker Change: Some buyers can see and feel just how great. It is for themselves.

Speaker Change: Turning to the lucid gravity demand.

Speaker Change: Think about that for a second.

Speaker Change: We opened numerous orders for Duluth of gravity Grand touring in November of last year and orders have exceeded my expectations. We've opened the orders for the Grand tour in the U S and the order before the gravity Grand touring are exceeding the air Grand touring by far in the same timeframe.

Speaker Change: We outsold many of the most storied and well known brands in the automotive industry in both the EV and the gas market.

Speaker Change: This is a testament to how much customers love the looser there.

Speaker Change: I love, how it drives performance.

Speaker Change: <unk> ability the design to charging speed the interior space and the range of course.

Speaker Change: And this is with an intentionally very limited marketing push which you can expect us to significantly ramp up throughout 2025.

Speaker Change: Now I'll tell you why this is so important as we enter 2025.

Speaker Change: Mark late Q1 in your calendars, we are working on something truly special.

Speaker Change: Because everything that customers love about the air we brought to the lucid gravity.

Speaker Change: This is why we are tremendously optimistic about the Luther gravity in the SUV segment.

Speaker Change: And we expect to open orders for the Turing to emulate this year. So we feel very optimistic about the large market opportunity ahead.

Speaker Change: In the coming weeks, we expect virtually all of our studios to have showroom and test drive cars.

I'd also highlight that will more than three quarters of the lucid gravity orders are new customers to use it.

Speaker Change: Some buyers can see and feel just how great. It is for themselves.

Speaker Change: Gravity is attracting new people to the brand again, despite very limited marketing.

Speaker Change: Turning to the Lewis geographic demand.

We opened U S orders for Duluth of gravity Grand touring in November of last year and orders have exceeded my expectations. We've opened the orders for the Grand tour in the U S and the.

Speaker Change: As we ramp up the number of lucid gravities on the road.

Speaker Change: And our marketing campaigns, we anticipate seeing a strong growth trajectory like we saw with the lucid air but in a much larger market opportunity.

Speaker Change: Order before the gravity Grand touring are exceeding the air Grand touring by far in the same timeframe.

Speaker Change: I'd like to add.

Speaker Change: And this is with an intentionally very limited marketing push which you can expect us to significantly ramp up throughout 2025.

Speaker Change: That so far while we priced the risk property Grand touring attractively, starting at $94900, we're seeing customers ordering highly optioned equipped configurations.

Speaker Change: Mark late Q1 in your calendars, we are working on something truly special.

Speaker Change: And we expect to open orders for the Turing to emulate this year. So we feel very optimistic about the large market opportunity ahead.

Speaker Change: A significant portion of the orders have a configured price of above $120000.

Speaker Change: And more than two thirds opening four to seven seater.

Speaker Change: Okay.

Speaker Change: And also highlights that well more than three quarters of the elusive gravity orders on new customers to use it.

Speaker Change: We would expect this trend to go down over time, as we mix in less liquid concentrations for inventory.

Speaker Change: Duluth gravity is attracting new people to the brand again, despite very limited marketing.

Speaker Change: Others are moving away from larger three row SUV because.

Speaker Change: It's challenging to create an SUV with lots of space without sacrificing range, where having a large battery pack that makes it less financially attractive to make.

Speaker Change: As we ramp up the number of Lucy Gravities on the road.

Speaker Change: And our marketing campaigns, we anticipate seeing a strong growth trajectory like we saw with the lucid air but in a much larger market opportunity.

Speaker Change: But we felt that problem.

Speaker Change: With our technology and I think customers will be really happy with the lucid gravity I.

Speaker Change: I believe it is very unique in the industry.

I'd like to add.

Speaker Change: That so far while we priced that gravity Grand touring attractively, starting at $94 $900, we're seeing customers ordering highly op sheet equipped configurations.

Speaker Change: Customers have been telling me that it has every feature they wanted an SUV and it's underpinned by our industry, leading technology that customers can only expect from lucid.

Speaker Change: In December we launched compromise nothing is our brand promise with the hero video and a campaign.

Speaker Change: A significant portion of the orders.

Speaker Change: Figured price of above $120000.

Speaker Change: I have to say I am impressed by the response of the positive feedback.

Speaker Change: More than two thirds opening four to seven seater.

Speaker Change: I think we found the perfect way of expressing what Louis It is all about.

Speaker Change: We would expect this trend to go down over time, as we mix in less liquid concentrations for inventory.

Speaker Change: And what the customers can expect from joining the lucid family.

Speaker Change: Others are moving away from larger three row, SUV, because it's challenging to create an SUV with lots of space without sacrificing range, where having a notch better repack that makes it less financially attractive to make.

Speaker Change: We once again achieved the highest level of brand awareness among customers intending to purchase Evs and.

Speaker Change: And we're just getting started.

Speaker Change: We have a long list of exciting and creative concepts. We are working on stay tuned in 2025, we will take a much bolder approach on marketing than ever before at lucid starting with the lucid gravity and in just a few weeks' time in New York City.

Speaker Change: But we felt that problem.

Speaker Change: With our technology and I think customers will be really happy with the lucid gravity.

Speaker Change: I believe it's very unique in the industry.

Speaker Change: Customers have been telling me that it has every feature the London in SUV and it's underpinned by our industry, leading technology that customers can only expect from lucid.

Speaker Change: Yes.

Speaker Change: Now, we're going to put a lot of focus on quality and ensure customers get what they expect from the <unk> brand.

Speaker Change: As mentioned last quarter. This means we will have more gradual delivery ramp in the first quarter.

Speaker Change: In December we launched compromise nothing is our brand promise with a hero video and the campaign.

Speaker Change: We will prioritize Louis' gravities four showrooms in test drive.

Speaker Change: I have to say I am impressed by the response of the positive feedback.

Speaker Change: I think it's the right strategy and one of the key learnings from the lucid Air launch, we want our customers to be able to experience solicit gravity.

Speaker Change: I think we found the perfect way of expressing what Louis It is all about.

Speaker Change: And the customers can expect from joining the <unk> family.

Speaker Change: We are also working with our suppliers to ensure they can ramp with high quality parts and support our production ramp in Q2.

Speaker Change: We once again achieved the highest level of brand awareness among customers intending to purchase evs.

Speaker Change: And we're just getting started.

Speaker Change: We have a long list of exciting and creative concepts. We are working on stay tuned in 2025, we will take a much bolder approach on marketing than ever before at lucid starting with the lucid gravity in just a few weeks' time in New York City.

Speaker Change: We also opened orders in Saudi Arabia in early February and we expect to start producing a number of looser gravities for customers there.

Speaker Change: These vehicles will be in transit in the first quarter for final production at our <unk> factory in the second quarter. So youll see those in our Q2 production numbers.

Speaker Change: Yes.

Speaker Change: Now, we're going to put a lot of focus on quality and ensure customers get what they expect from them towards the brand.

Speaker Change: Now turning to Europe.

Speaker Change: As mentioned last quarter. This means we will have more gradual delivery ramp in the first quarter.

Speaker Change: Still early but we continue to see traction and thats. Despite the very tough market for is eastern Europe. These days, especially in our segment.

Speaker Change: We will prioritize lucid gravities four showrooms in test drive.

Speaker Change: And we have our eyes set on accelerating our progress we have added additional sales to adjacent service centers for example in Germany.

Speaker Change: I think it's the right strategy and one of the key learnings from the lucid Air launch, we want our customers to be able to experience solicit gravity.

Speaker Change: And we are accelerating the growth of our retail footprint and market coverage in Europe by introducing additional distribution channels like importers and the agency models for select countries. In addition to our existing direct to consumer model.

Speaker Change: We are also working with our suppliers to ensure they can ramp with high quality parts and support our production ramp in Q2.

Speaker Change: We also opened orders in Saudi Arabia in early February and we expect to start producing a number of Luther gravities from customers there.

Speaker Change: Yeah.

Speaker Change: We are very excited about 2025 and expect another big year.

Speaker Change: We expect to produce approximately 20000 vehicles.

Speaker Change: These vehicles will be in trended in the first quarter for final production at our <unk> factory in the second quarter. So youll see those in our Q2 production numbers.

Speaker Change: With continued growth in 2026, as we get a full year of lucid gravity further brand awareness growth had more maturity in the business and markets.

Speaker Change: This will take us to mid size with scheduled start of production in late 2026.

Speaker Change: Now turning to Europe.

Speaker Change: Still early but we continue to see traction and thats. Despite the very tough market for the eastern Europe. These days, especially in our segment.

Speaker Change: I was just down in the studio.

Speaker Change: And I can tell you the vehicles look amazing.

Speaker Change: And we have our eyes set on accelerating our progress.

Speaker Change: I think customers are going to love them and I can't wait to show them to you.

Speaker Change: <unk> added additional sales studio within service centers for example in Germany.

Speaker Change: I don't want to reveal too much but we are currently planning to unveil them late this year or early next year.

Speaker Change: And we are accelerating the growth of our retail footprint and market coverage in Europe by introducing additional distribution channels like importers and the agency models for select countries. In addition to our existing direct to consumer model.

Speaker Change: In closing I'd like to highlight the four strategic priorities I'm focused on first.

Speaker Change: Continue to be laser focused on driving our growth of customer deliveries of our high quality and technology leading vehicles.

Speaker Change: We are very excited about 2025 and expect another big year.

Speaker Change: As mentioned before this includes doubling down on marketing across regions. We are active in.

We expect to produce approximately 20000 vehicles.

Speaker Change: With continued growth in 2026, as we get a full year of lucid gravity further brand awareness growth and more maturity in the business and markets.

Speaker Change: Expanding our retail footprint and distribution channels and.

Speaker Change: And most importantly ramping production of the lucid gravity.

Speaker Change: Second.

Speaker Change: This will take us to mid size with scheduled start of production in late 2026.

Speaker Change: Continue to advance our technology leadership in vehicle, especially powertrain technology, but equally important further advancing our advanced driver assistance system functionality for example by introducing hands free driving which we expect to roll out later this year.

Speaker Change: Was just down in the design studio.

Speaker Change: And I can tell you the vehicle look amazing.

Speaker Change: I think customers are going to love them and I can't wait to show them to you.

Speaker Change: Third.

Speaker Change: I don't want to reveal too much but we are currently planning to unveil them later this year or early next year.

Speaker Change: Bringing our three mid size vehicles to market with the first vehicle scheduled for startup production in late 2026.

Speaker Change: In closing I'd like to highlight the four strategic priorities I am focused on first.

Speaker Change: In fact, we signed off on the advanced engineering phase of two of the midsize variance, which will now move to the development and industrialization phase.

Speaker Change: Continue to be laser focused on driving our growth of customer deliveries of our high quality and technology leading vehicles.

Speaker Change: This includes the ethos powertrain, which is well under development and is all about a lower cost version of our Zeus powertrain in the year.

Speaker Change: As mentioned before this includes doubling down on marketing across regions. We are active in.

Speaker Change: Spending our retail footprint and distribution channels.

Speaker Change: Fourth <unk>.

Speaker Change: Expanding our technology license business and drive forward other new technology monetization options. This.

Speaker Change: And most importantly ramping production of the looser gravity.

Speaker Change: Second.

Speaker Change: This will be a core focus in terms of the discussions that are already well underway as well as examining new opportunities.

Speaker Change: Continue to advance our technology leadership in vehicle, especially powertrain technology, but equally important further advancing our advanced driver assistance system functionality.

Speaker Change: And of course underpinning all of this will be a laser focus on cost and efficiency.

Speaker Change: Example, by introducing hence, we driving which we expect to roll out later this year.

Speaker Change: Which will be enhanced with the partnership with Mr. <unk>.

Speaker Change: Third.

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

Speaker Change: Bringing our three mid sized vehicles to market with the first vehicle scheduled for start of production in late 2026.

Thank you Mark and thank you to those who were taking the time to join us today.

Speaker Change: In fact, we signed off on the advanced engineering phase of two of the mid sensitive areas, which will now move to the development industrialization phase.

Speaker Change: Before I get to my prepared remarks, I wanted to take a moment to X.

Speaker Change: Express my gratitude for Peter's leadership and guidance contributions and for his continued vision to drive the company's success.

Speaker Change: This includes the Aetna powertrain, which is well under development and is all about a lower cost version of our Zeus powertrain in the year.

Speaker Change: I am grateful for the opportunity to learn and grow under his leadership.

Speaker Change: I would also like to take this opportunity to thank the leadership team the board of directors and the entire lucid team for the unwavering support.

Speaker Change: Fourth <unk>.

Speaker Change: Expanding our technology license business and drive forward other new technology monetization options. This.

Speaker Change: This will be a core focus in terms of the discussions that are already well underway as well as examining new opportunities.

Speaker Change: It was an honor and privilege to serve as the company's interim CFO. It was also plaza, telling the lucid facility and getting to know so many of you in the analyst and Investor community.

Speaker Change: And of course underpinning all of this will be a laser focus on cost and efficiency.

Speaker Change: I truly appreciate the thoughtful discussions and insights you have shared.

Speaker Change: Which will be enhanced with the partnership with Mr. <unk>.

Speaker Change: We remain deeply appreciative of the relationships, we have built and the journey, we have taken together over the last several earning calls.

Speaker Change: With that I'd like to turn it over to Gagan Singh Ron to provide an update on our financials.

tawfeeq: As I turn my focus to our new and expanded growth I would like to take this opportunity to officially welcome tawfeeq to Duluth team.

Thank you Mark and thank you to those who were taking the time to join us today.

Speaker Change: Before I get my prepared remarks, I wanted to take a moment.

Speaker Change: Turning to our clinical default and fourth quarter results.

Speaker Change: Express my gratitude for Peter's leadership and guidance contributions and for his continued vision to drive the company's success.

Mark: As Mark mentioned.

Speaker Change: For what.

Speaker Change: Transformational year for lucid were delivered.

Speaker Change: I am grateful for the opportunity to learn and grow under his leadership.

Speaker Change: The consecutive quarters of record deliveries.

Speaker Change: Significant improvement in gross margins nearly carry them on a year over year basis, and we expect significant improvement in 2025.

Speaker Change: I would also like to take this opportunity to thank the leadership team the board of directors and the entire lucid team for the unwavering support.

Speaker Change: We successfully managed operating expenses.

Speaker Change: It was an honor and privilege to serve as the company's interim CFO. It was also plaza, telling the lucid facility and getting to know so many of you in the analyst and Investor community.

Speaker Change: Strategic growth investments delivering on our guidance for operating margin improvement year over year.

Speaker Change: We strengthened our balance sheet with continued strong support from our strategic partner in the PAA.

Speaker Change: I truly appreciate the thoughtful discussions and insights you have shared.

As well as new investors in our last transaction.

Speaker Change: We remain deeply appreciative of the relationships, we have built and the journey, we have taken together over the last several earnings calls.

Speaker Change: And we also significantly improved working capital behind strategic improvement in inventory management and despite mixed headwinds.

Speaker Change: As I turn my focus to win new and expanded growth I would like to take this opportunity to officially welcome tawfeeq to Duluth team.

Speaker Change: We have a lot to be proud.

Speaker Change: In light of the challenges, we and the industry face.

Speaker Change: Turning to our clinical default and fourth quarter results.

Speaker Change: But we recognize that we still have a lot more work to do.

Mark: As Mark mentioned.

Speaker Change: The team is invigorated with the lucid devotee ramp still ahead of us.

Speaker Change: Slide 24.

Mark: Transformational year for lucid were delivered.

Speaker Change: And as we get closer to the launch of our higher volume mid sized platform.

Mark: The consecutive quarters of record deliveries.

Mark: Significant improvement in gross margins nearly Harry.

Speaker Change: Turning to production and deliveries.

Speaker Change: In 2024, we produced 9049 vehicles.

Mark: Year over year basis, and we expect significant improvement in 2025.

Speaker Change: Up 7% year over year and in line with our guidance of approximately 9000 vehicles.

Mark: We successfully managed operating expenses.

Mark: Strategic growth investments.

Speaker Change: While delivering 10200 40 million vehicles up 71% year over year.

Mark: Delivering on our guidance for operating margin improvement year over year.

Mark: We strengthened our balance sheet with continued strong support from our strategic partner the PAA.

Speaker Change: During the fourth quarter.

Speaker Change: We produced 3386 vehicles.

Mark: New investors in our last transaction.

Speaker Change: 42% year over year.

Mark: And we've also significantly improved working capital behind strategic improvement in inventory management and despite mixed headwinds.

Speaker Change: And up 88% sequentially.

Speaker Change: And delivered 399 vehicles up 17, 9% it'll at year end up 11% sequentially.

Mark: We have a lot to be proud of.

Mark: In light of the challenges.

Speaker Change: This was the primary driver of the $234 $5 million in revenue for the quarter.

Industry fit.

Mark: But we recognize that we still have a lot more work to do.

Mark: The team is invigorated with the lucid devotee ramp still ahead of us.

Speaker Change: GAAP gross margin for Protiviti was negative 114% plus.

Mark: And as we get closer to the launch of our higher volume mid size platform.

Speaker Change: Significant improvement from the negative 225% in particularly tree.

Mark: Turning to production and deliveries.

Speaker Change: In the fourth quarter GAAP gross margin was negative 89%.

Mark: In 2024, we produced 9029 vehicles.

Speaker Change: This included a favorable impact related to a net supply recovery, which we were able to successfully negotiate.

Mark: Up 7% year over year and in line with our guidance of approximately 9000 vehicles.

Speaker Change: Excluding this benefit gross margin of negative 108% was similar to the third quarter and in line with the guidance we provided.

Mark: While delivering 10200 40 million vehicles up 71% year over year.

Speaker Change: In 2025, we expect another year of significant gross margin improvement similar to the trend in 2024.

Mark: During the fourth quarter.

Mark: We produced 3386 vehicles.

Mark: 42% year over year.

Speaker Change: We expect this improvement to be driven by a combination of production scale mix and continued focus on cost reductions.

Mark: And up 88% sequentially.

Mark: And delivered 399 vehicles.

Mark: 79% at year end up 11% sequentially.

Speaker Change: Gross margin for the first half of 2025.

Mark: This was the primary driver of the $234 $5 million in revenue for the quarter.

Speaker Change: Expected to be near the levels of Q4 before excluding the one time favorable recovery benefit.

Speaker Change: This is due to onetime incremental costs associated with the <unk> ramp up and then significantly improve with scale in the second half of the year.

Mark: GAAP gross margin for Protiviti was negative 114%.

Mark: A significant improvement from the negative 225% in particular between.

Mark: In the fourth quarter GAAP gross margin was negative 89%.

Speaker Change: We expect Q1 to be more impacted by seasonality and then improve in Q2 with the ramping of the lucid gravity.

Mark: This included a favorable impact related to a net supply recovery, which we were able to successfully negotiate.

Speaker Change: Turning to Opex.

Speaker Change: R&D in 2024 was approximately $1 $1 billion.

Mark: Excluding this benefit gross margin of negative 108% was similar to the third quarter and in line with the guidance we provided.

Speaker Change: Up 26% year over year, driven largely by gravity investments.

Mark: In 2025, we expect another year of significant gross margin improvement similar to the trend in 2024.

Speaker Change: R&D in the fourth quarter of $280 million was down from $324 million in the prior quarter as costs related to gravity diminished with the startup of production.

Mark: We expect this improvement to be driven by a combination of production scale mix and continued focus on cost reductions.

Speaker Change: And can you quantify we expect R&D to steadily increase throughout the year as we ramp up let's say in Atlas and restaurants.

Mark: Gross margin for the first half of 2025 is expected to be near the levels of Q4, 'twenty four excluding the one time favorable recovery benefit.

Speaker Change: SG&A in 'twenty 'twenty, four was $901 million up 13% year over year, and $243 9 million in the fourth quarter.

Mark: This is due to onetime incremental costs associated with a look at that with the ramp up and then significantly improve with scale in the second half of the year.

Speaker Change: Up 4% sequentially.

Brian: Dilutive gravity is an opportunity for lucid to excellent it's Brian.

Mark: We expect Q1 to be more impacted by seasonality and then improved in Q2 with the ramping of the elusive gravity.

Brian: <unk> new product in a much more desirable <unk> market segment.

Brian: We expect to put more muscle behind the lucid gravity the branch sales and brand awareness.

Mark: Turning to Opex.

Mark: R&D in 2024.

Mark: Similarly, one 1 billion.

Brian: We expect to be able to leverage that brand awareness growth into the Midwest market with the midsize vehicles, we expect to start producing in late 2026.

Mark: Up 26% year over year, driven largely by gravity investments.

Mark: R&D in the fourth quarter of $280 million was down from $224 million in the prior quarter.

Brian: We expect operating expenses in 2025, as a percentage of revenue to improve by more than 100 percentage points.

Mark: Cost related to gravity diminished with the startup of production.

Brian: Turning to other income in Q4, we recorded a gain of $292 6 million in.

Mark: And can you quantify we expect R&D to steadily increase throughout the year as we ramp up let's say an uplift in restaurants.

Brian: In other income from a change in fair value of derivative liability and a corresponding total accretion of $239 $7 million associated with our redeemable convertible preferred stock under our line item below net loss.

Mark: SG&A included 24 was $901 million up.

Mark: 13% year over year, and $243 9 million in the fourth quarter.

This was mainly due to the decrease in our share price at the end of the fourth quarter compared to the prior quarter.

Mark: Four 4% sequentially.

Mark: The lithium clarity as an opportunity for lucid to estimate its Brian.

Brian: Adjusted EBITDA in Q4, 24 was approximately negative $577 million.

Mark: <unk> new product in a much more desirable ethylene market segment.

Brian: An improvement of 6% from Q3 'twenty 'twenty four.

Expect more muscle behind the lucid gravity to drive sales and brand awareness.

Brian: Move to the balance sheet.

Mark: We expect to be able to leverage that brand awareness growth into the Midwest market with the midsize vehicles, we expect to start producing in late 2026.

Brian: We ended the quarter with approximately $5 8 billion in cash cash equivalents.

Brian: Investments in equity Securities.

Mark: We expect operating expenses in 2025, as a percentage of revenue to improve by more than 100 percentage points.

Brian: Total liquidity of approximately 6.13 billion.

Brian: This does not include the Mr grants or the FNF loans.

Mark: Turning to other income in Q4, we recorded a gain of $292 6 million.

Brian: Additionally, we also renewed an upsized the share repurchase activity.

Mark: In other income from a change in fair value of derivative liability and a corresponding total accretion of $239 7 million.

Brian: The commitment amount from 1 billion, so the real to $1 9 million Silvio.

Brian: Further improving our liquidity profile by approximately $240 million in U S dollars.

Associated with our redeemable convertible preferred stock under our line item below net loss.

Brian: And demonstrating strong support from our global banking network.

Mark: This was mainly due to the decrease in our share price at the end of the fourth quarter compared to the prior quarter.

Brian: Turning to inventory inventory was $407 8 million in Q4, 44 down <unk>, 5% to $6 8 million in Q3 2024 due to continuous improvement in inventory management.

Mark: Adjusted EBITDA in Q4, 2004 was approximately negative $577 million.

Mark: An improvement of 6% from Q3 2024.

Brian: Capital expenditure for 2024 was $883 8 million.

Mark: Move to the balance sheet.

Brian: Slightly below the $1 billion, we guided to on our third quarter earnings Conference call.

Mark: We ended the quarter with approximately five zero.

Mark: <unk> cash cash equivalents.

Brian: The lower Capex was primarily related to the deferral of projects into 'twenty quantified.

Mark: Investments in equity Securities.

Mark: Total liquidity of approximately 6.13 billion.

Brian: Before moving to the outlook for 'twenty could be five let me touch on some external factors.

Mark: This does not include the Mr grants or the FNF loans.

Brian: The industry faces a number of uncertainties with regard to potential policy and regulation changes in the U S.

Mark: Additionally, we also renewed an upsized that TWD 30 facility.

Brian: We have been working tirelessly to find ways to mitigate some of these impacts.

Mark: Using the commitment amount from 1 billion, so the real to $1 9 billion <unk>.

Brian: For example, we have been taking steps to localize supply.

Mark: Further improving our liquidity profile by approximately $240 million in U S.

Brian: We have also exited certain supply chain optimization efforts that we think could help mitigate some of the tariff impacts.

Mark: And demonstrating strong support from our global banking network.

Turning to inventory inventory was $407 8 million in Q4, 44 down <unk>, 5% to $6 8 million in Q3 2024 due to continuous improvement in inventory management.

Brian: As we understand them today.

Brian: And we expect some of these actions should also benefit us from a cost perspective.

Brian: Of course, we don't expect to be immune from potential policy changes and understanding precise impact has a number of dependencies.

Mark: Capital expenditure for particularly for was $883 8 million.

Mark: Slightly below the $1 billion, we guided to on our third quarter earnings Conference call.

Brian: We're closely monitoring the situation and we'll continue to work with our government partners.

Brian: Our production outlook Embeds, our best understanding of the possible impacts as we comprehend it today.

Mark: The lower Capex was primarily related to the deferral of projects into particularly fiber.

Mark: Before moving to the outlook for political would be five let me touch on some external factors.

Brian: We forecast production of approximately 20000 vehicles in 2025.

Mark: The industry faces a number of uncertainties with regard to potential policy and regulation changes in the U S.

Brian: With regard to our liquidity position.

Brian: Ended the quarter with total liquidity of approximately $6 1 billion.

Mark: We have been working tirelessly to find ways to mitigate some of these impacts.

Brian: Due to our cost transformation efforts and cash management, we expect our current liquidity will now give us runway into the second half of critical defects. In addition to the recent upsizing of the JV facility.

Mark: For example, we have been taking steps to look like a flight.

Mark: We have also exited certain supply chain optimization efforts and equity.

Mark: To get some of the tariff impacts.

Mark: As we understand them today.

Brian: I would also highlight that this does not include future FHA loan.

Mark: And we expect some of these actions should also benefit us from a cost perspective.

Brian: These agreements.

Brian: Moving to Capex.

Mark: Of course, we don't expect to be immune from potential policy changes and understanding precise impact has a number of dependencies.

Brian: Our focus is increasing investments in our future growth initiatives and we expect capital expenditures for 225 to be approximately $1 4 billion.

Mark: We are closely monitoring the situation and we'll continue to work with our government partners.

Brian: Reflecting ample expansion for our completely buildup unit factory.

Mark: Our production outlook Embeds, our best understanding of the possible impacts as we comprehend it today.

Brian: Plus both in manufacturing and Antoine.

Brian: Certain efforts and our capital outlay from 2024, and our continued investments and retail infrastructure.

Mark: We forecast production of approximately 20000 vehicles in 2025.

Brian: From a product perspective, we are scheduled for start up production of our high volume mid size platform in late 2026.

With regard to our liquidity position.

Mark: <unk> ended the quarter with total liquidity of approximately $6 $1 billion.

Brian: As we close our protocol before and look ahead to particularly five <unk>.

Mark: Due to our cost transformation efforts and cash management, we expect our current liquidity will now give us runway into the second half of 'twenty 'twenty fixed.

Brian: I couldnt be more excited about the opportunities that lie ahead for our company.

Brian: Robert a strong financial foundation established ourself as the EV technology leader.

Mark: In addition to the recent upsizing of the JV facility.

Brian: Positioned ourselves for significant growth in the coming year, we will continue to focus on driving efficiency invest strategically and creating value for our stakeholders.

Mark: I would also highlight that this does not include future FHA loan or Mr grants.

Mark: Moving to Capex.

Mark: Our focus is increasing investments in our future growth initiatives and we expect capital expenditures for 2025 to be approximately $1 4 billion.

Brian: We thank you for your continued trust and support redact liquid turning back to manner to get to your questions.

Mark: Reflecting ample expansion for our completely buildup unit factory.

Mark: Atlas both in manufacturing and <unk>.

Mark: Certainly the effort and our capital outlays in 2024, and our continued investments and retail infrastructure.

Brian: Ladies and gentlemen, as a reminder to ask a question. Please press star one on your telephone.

Mark: From a FERC perspective, we are scheduled for startup production of our high volume metric platform in late 2026.

Brian: And wait for your name to be announced to withdraw your question. Please press star one again please.

Mark: As we close out, particularly before and look ahead to 30 25.

Brian: Please standby, while we compile the Q&A roster.

Mark: Couldn't be more excited about the opportunities that lie ahead for our company.

Linda: Hi, Linda so before we get to the.

Linda: The calls on by phone I would like to take some retail questions from investors on the same technology platform.

Mark: With a strong financial foundation established ourself as the.

Mark: EV technology leader at.

Speaker Change: Our first question comes from Patrick <unk>.

Mark: In addition, our self with significant growth in the coming year, we will continue to focus on driving efficiency invest strategically and creating value for our stakeholders.

Speaker Change: Peter mentioned houses and aims to be 80% Tech company and 20% car company. One is revenue from tech play as expected one categories products do you see making up that 80% of revenue.

Mark: We thank you for your continued trust and support for that liquid turning back a minute to get to your questions.

Speaker Change: Yes, let me take this.

Patrick: Well thanks for the question Patrick.

Speaker Change: Thank you.

Speaker Change: Statements by Peter was taken out of context I want to stress.

Speaker Change: That doesn't mean <unk>.

Speaker Change: Deep prioritizing our automotive car business.

Speaker Change: Quite the opposite is perfect.

Mark: Ladies and gentlemen, as a reminder to ask a question. Please press star one on your telephone.

Speaker Change: Very excited about the growth potential that we have with the particularly with the gravity coming to market.

Mark: Wait for your name to be announced to withdraw your question. Please press star one again.

Speaker Change: 80% Tech company and 20% of the car company basically means that we see ample opportunity to leverage our technology and with.

Mark: Please standby, while we compile the Q&A roster.

Rhonda: Hi, it's Rhonda so before we get to the.

Speaker Change: The calls on my phone I would like to take some retail questions from investors on the same technology platform.

And with external customers beyond our core business, but it doesn't mean like one of the articles and a ramp in the headline Josef wants to become a supplier and do cars on the site not months of planning to do because we wanted to make this very clear.

Patrick: Our first question comes from Patrick <unk>.

Patrick: Peter mentioned houses that aims to be 80% Tech company and 20% car company. One is revenue from Tech plays an expected one categories products do you see making up that 80% of revenue.

Speaker Change: We are in constant discussions with that additional.

Speaker Change: Partners to yields.

Speaker Change: Yes, let me take this.

Speaker Change: And we are expecting.

Patrick: Thanks for the question Patrick.

Speaker Change: To close soon but I cannot go into into further detail.

Speaker Change: Thank you.

Speaker Change: Statements by Peter was taken out of context I want to stress.

Speaker Change: Types of products and revenues.

Speaker Change: That doesn't mean deepa.

Speaker Change: Right now, it's definitely vehicle technology related but we are exploring other means of monetization and other technologies going forward.

Speaker Change: Deep prioritizing our automotive car business.

Speaker Change: Quite the opposite is perfect.

Speaker Change: Excited about the growth potential that we have with the particularly with the gravity coming to market.

Mark: Thanks, Mark will go into our second question is on policy.

Speaker Change: 80% Tech company and 20% of the car company basically means that we see ample opportunity to leverage our technology and.

Mark: We mentioned that discussions are ongoing regarding potential tech deal since 2021 with one deal made while the recently mentioned discussing the same or different manufacturers do you see a deal being made before the Atlas model is ready.

Speaker Change: With external customers beyond our core business, but it doesn't mean like one of the articles and a ramp in the headline news that wants to become a supplier and do cost on the site not planning to do kind of wanting to make this very clear.

Mark: And recently mentioned discussion or not with the same.

Mark: Potential partners have you talked to in 2021 as a matter of fact, this is getting longer and longer.

Speaker Change: We are in constant discussions with additional.

Mark: This week, we had additional very large Oems, reaching out to us in order to have discussions.

Speaker Change: Partners to put yields.

Speaker Change: And we are expecting.

Mark: As a matter of fact regarding the second question regarding the Alpha motor is not immediate.

Speaker Change: To close soon but I cannot go into further detail.

Speaker Change: Types of product and revenues.

Mark: Most of our radio are a matter of fact some of the current discussions are about the powertrain and not about the Atlas.

Speaker Change: Right now its staff on the vehicle technology related but we are exploring other means of monetization and other technologies going forward.

Mark: On future discussions definitely around our on the Atlas of Mordor, but we don't have to wait until their mortgage ready by now we are established.

Mark: Thanks, Mark will go into our second question is on policy.

Mark: The technology leader. So we don't we don't have to sell it for us anymore.

Mark: We mentioned that discussions are ongoing regarding potential tech deal since 2021 with one deal made or the recently mentioned discussing the same with different manufacturers.

Mark: Thanks, and our last question is from policy with gravity deliveries being low volume manufacturing ramp up quality mindset constrained are you concerned that you will lose a lot of customers who have preordered due to long wait times similar to what happened with air.

Mark: See a deal being made before the Atlas model is ready.

Mark: And recently mentioned discussion or not with the same.

Mark: Let's put long wait times into perspective, we opened orders in November for a few months ago, and we are starting to ramp up our deliveries over the next coming weeks. So it's not really in comparison to what we've seen that.

Mark: Potential partners that we talk to in 2021 as a matter of fact and is getting longer and longer.

Mark: This week, we had additional very large Oems, reaching out to us in order to have discussions.

Mark: Long wait times and also have not make a mistake every automotive OEM has a gradual ramp in the beginning when they launch a new product. So it's not it's not a normal one.

Mark: As a matter of fact regarding the second question regarding the Alpha motor is not immediate.

Mark: Most of our radio are a matter of fact some of the current discussions are about the powertrain and not about the aetna on future discussions definitely around R&R on the Atlas of Mordor, but we don't have to wait until there are more goods.

Mark: We're experiencing here, so and even beyond that.

Mark: There might be some customers have changed their mind, because it doesn't fit the timing with our order intake right now is healthy actually very healthy without any marketing and when we said that in the in the earnings call.

Mark: Ready by now we are established.

Mark: <unk>. So we don't we don't have to sell it for us anymore.

Thanks, and lastly question is from policy with gravity deliveries being low volume manufacturing ramp up quality mindset constrained are you concerned that you will lose a lot of customers who have preordered due to long wait times similar to what happened with air.

Mark: And we expect this to become even healthier going forward.

Mark: Great column that we'd like to now take questions from the phone lines.

Mark: Thank you.

Mark: As a reminder, ladies and gentlemen that star one to ask a question and wait for your name to be announced.

Mark: Well, let's put long wait times into perspective, we opened the <unk>.

Mark: <unk> in November.

Mark: Few months ago, and we are starting to ramp up our deliveries over the next coming weeks. So it's not really in comparison to what we've seen that.

Mark: Please standby for your first question.

Speaker Change: Our first question comes from the line of John Murphy with Bank of America Securities. Your line is open.

Mark: Wait time.

Mark: Let's not make a mistake every automotive OEM as a gradual ramp in the beginning when they launch a new product. So it's not it's not unknown.

John Murphy: Good evening everybody.

John Murphy: Just wanted to go kind of breakthrough that you are at the heart of I think what a lot of people are questioning right now is peters.

Mark: What we are experiencing here, so and even beyond that.

Peter is not on the call. It's a beta on traditional to make a change let's say it like this without having sort of the founder Youre involved with the transition call I'm just curious why Peter isn't present, and why you would make an announcement like this without.

Mark: Yes, there might be some customers have changed their mind, because it doesn't fit their timing, but our order intake right now is healthy actually very healthy without any marketing when we said that in the.

Speaker Change: Our success or why you wouldnt stick around until a successor weight was chosen I know, it's a tough question, but I mean, it's the one that everybody is thinking right now.

Mark: On the earnings call and we expect this to become even healthier going forward.

Speaker Change: Yes, I can I can take that obviously.

Mark: Great column that we'd like to now take questions from the phone lines.

Speaker Change: I think incrementally.

Speaker Change: Announced that Peter made the decision that after 12 years now a good time.

Mark: Thank you.

Mark: As a reminder, ladies and gentlemen that start one wants to ask a question and wait for your name to be announced.

Speaker Change: To pass the Baton.

Speaker Change: In that time is extraordinary and he built.

Mark: Please standby for your first question.

Speaker Change: As a company.

Speaker Change: Our first question comes from the line of John Murphy with Bank of America Securities. Your line is open.

Speaker Change: But he also built a very strong team and he felt now a good time after bringing <unk>, establishing our technology leadership and gravity to passengers at home.

John Murphy: Good evening everybody.

Speaker Change: Just wanted to go kind of right to the heart of I think what a lot of people are questioning right now.

Speaker Change: And Thats why we are sitting here right now to take the call.

Speaker Change: I mean, Peter is that on the call. It's a beta on traditional to make a change with it like this without having sort of the founder Youre involved with the transition call I'm just curious why Peter isn't present, and why you would make an announcement like this without.

Speaker Change: Okay.

Speaker Change: Then just a second question I Wonder if you could kind of give us an idea of the the gravity order book.

Speaker Change: And how that's developing I don't I'm not sure you'll be willing to give us the size, but we'd love to hear that but.

Speaker Change: But just kind of the trajectory and how that how that's developing.

Speaker Change: Our success or why you wouldnt stick around until a successor weight was chosen I know, it's a tough question, but I mean, it's the one that everybody is thinking right now.

Speaker Change: Yes.

Speaker Change: I just mentioned that in the in their earnings call.

Speaker Change: We opened the August last November and I was actually positive.

Speaker Change: Yes, I can.

Speaker Change: Can take that obviously.

Speaker Change: Thank you.

Speaker Change: We are really surprised about demand, let's not forget we only opened the orders for the Grand touring trend, which started $94900.

Speaker Change: And clearly.

Speaker Change: Announced that Peter made the decision that after 12 years now a good time.

Speaker Change: To pass the Baton.

Speaker Change: In that time is extraordinary.

Speaker Change: And the vast majority of orders that we get are north of 120000.

Speaker Change: He built.

Speaker Change: Company.

Speaker Change: But you also built a very strong team and he felt now a good time after bringing <unk>, establishing our technology leadership and gravity to passengers at home.

Speaker Change: That limit.

Speaker Change: Actually the numbers, what we see actually very strong.

Speaker Change: Takeoff of orders.

Speaker Change: And I want to repeat.

Speaker Change: We haven't done.

Speaker Change: And Thats why we are sitting here right now to take the call.

Speaker Change: Much marketing I won't actually almost say may have known unknown marketing so far from the gravity, which we are planning towards to increase drastically over the next couple of weeks.

Speaker Change: Okay.

Speaker Change: And just a second question I Wonder if you could kind of give us an idea of the the gravity order book.

Speaker Change: I wanted to see some very interesting things coming.

Speaker Change: And how that's developing I'm not sure you'll be willing to give us the size, but wed love to hear that but.

Speaker Change: Is it marketing is it fair to state that the gravities that you have within the 20000.

Speaker Change: But just kind of the trajectory and how that how that's developing.

Speaker Change: Yes.

Speaker Change: I just mentioned that in the earnings call.

Speaker Change: Guidance.

Speaker Change: Is what you think youre going to sell or is it what you are limited for production there.

Speaker Change: We opened the August last November and most action point of view.

Speaker Change: Just trying to understand because it sounds like order book is not is not is still early days.

Speaker Change: We are really surprised about demand, let's not forget we only opened the orders for the Grand touring trend, which started at $94900 and the vast majority of orders that we get are north of 120000.

Speaker Change: How are you come up with that number and is it in a capacity constrained.

Speaker Change: Yeah, I think Peter said that in previous earnings earnings calls had been expecting to be capacity constrained in the first couple of quarters.

Speaker Change: And that limit.

Speaker Change: And that's the way right now we're projecting this.

Speaker Change: Actually the numbers, but we see actually very strong.

Speaker Change: Have also considered in the 20000.

Speaker Change: Take off for Florida.

Speaker Change: The fact that obviously, there's a lot of uncertainty right now with regulatory changes and.

Speaker Change: I want to repeat.

Speaker Change: I haven't done.

Speaker Change: Much marketing I would actually almost say may have known unknown marketing so far from the gravity, which we are planning to increase drastically over the next couple of weeks.

Speaker Change: And the other part that's why we wanted to be available more prudent.

Speaker Change: With the numbers.

Speaker Change: But yes, we expect to be in the first couple of quarters supply constraint.

Speaker Change: You're going to see some very interesting things coming.

Speaker Change: Okay, and then just one last one on the mid size I mean, it sounds like it's getting close to.

Speaker Change: Mark is it fair to state that the gravities that you have within the 20000.

Speaker Change: Design freeze almost I'm, just curious when that hits when we get to see it because we'd love to see it as most of your vehicles are vehicles, so far pretty good looking.

Speaker Change: Guidance.

Speaker Change: Is what you think youre going to sell or is it what you are limited for production.

Speaker Change: And who is kind of taking the lead on that now appears as I step aside if he is still involved with that product.

Speaker Change: Just trying to understand because it sounds like order book is not it's not it's still early days.

Speaker Change: In the final stages or there or is the rest of the team leading the charge.

Speaker Change: How are you come up with that number and is it in a capacity constrained.

Speaker Change: Yeah, I think Peter said that in previous earnings earnings calls had been expecting to be capacity constrained in the first couple of quarters.

Speaker Change: It's clearly the rest of the teams arena Peter has.

Speaker Change: Handed over the day to day.

Speaker Change: Sponsors ability to the team and we have the head of product we have in our powertrain behalf.

Speaker Change: And that's the way right now.

Speaker Change: <unk>.

Speaker Change: Have also considered in the 20000.

Speaker Change: Net of design all of those people that are with the company for many many years. Some north of 10 years will continue the baton to the finish line.

The fact that obviously, there's a lot of uncertainty right now with regulatory changes and.

Speaker Change: That's why we wanted to be more prudent.

Speaker Change: And when do we get to see the prototypes.

Speaker Change: The numbers.

Speaker Change: But yes, we expect to be in the first couple of quarters supply constraint.

Speaker Change: I think I said that earlier and later this year or beginning next year.

Speaker Change: Okay, and then just one last one on the mid size I mean, it sounds like it's getting close to.

Speaker Change: Okay, great. Thank you very much.

Speaker Change: Thank you.

Speaker Change: Design freeze almost I'm, just curious when that hits when we get to see it because we'd love to see it as most of your vehicles are vehicles, so far pretty good looking.

Speaker Change: Please standby for our next questions.

Speaker Change: Our next question comes from the line of Tom <unk> with RBC. Your line is open.

Speaker Change: Hi, Thanks for taking the question Hey, Mark to fake and congrats to go get in your new role.

Speaker Change: Who is kind of taking the lead on that now appears as I step aside if he is still involved with that product.

Speaker Change: I just had a follow ups to what.

John was asking some of those questions.

Speaker Change: In the final stages or there or the rest of the team leading the charge.

Speaker Change: The first on on the.

John Murphy: On Peter's new role just curious as to what that is exactly you mentioned not day to day, but.

Speaker Change: Clearly the rest of the team that Peter has.

Speaker Change: I handed over the day to day.

Speaker Change: Our responsibility to the team.

John Murphy: As an advisor or what exactly does that mean, it's such a strong presence obviously for all of US I would just love to hear more on that first.

Speaker Change: We have a head of product we have in our powertrain behalf.

Speaker Change: The head of design all of those people that are with the company for many many years some north of 10 years will continue the baton.

John Murphy: Well I mean.

John Murphy: Basically senior technical adviser for the chairman of the board.

Speaker Change: Finish line.

John Murphy: And.

Speaker Change: And when do we get to see the prototypes.

John Murphy: Strategic technical advisors again, we will not be part of the day to day business, but is there a question devising and the chairman.

Speaker Change: I think I said that earlier.

Speaker Change: This year beginning next year.

Speaker Change: Okay, great. Thank you very much.

John Murphy: It is worthwhile to involve better than hone.

Speaker Change: Thank you.

John Murphy: The discretion of the chairman and to have that interaction.

Speaker Change: Please standby for our next questions.

Speaker Change: Our next question comes from the line of Tom Moran with RBC. Your line is open.

John Murphy: Okay.

John Murphy: And then the other follow up.

John Murphy: Again on gravity I.

Speaker Change: Hi, Thanks for taking the question Hey, Mark defeat congrats to her.

John Murphy: I guess, what I understand capacity constrained on the 20000.

Speaker Change: New role.

Speaker Change: I just have follow ups to what.

John Murphy: Yes.

Speaker Change: John was asking some of those questions.

John Murphy: Are you guys still seeing that six times total addressable market for gravity versus a stance or does that that lowered by any chance that you are only doubling the size right now.

Speaker Change: First on on the <unk>.

Speaker Change: On Peter's new role just curious as to what that is exactly you mentioned not day to day, but.

John Murphy: From.

Speaker Change: As an adviser what exactly does that mean, it's such a strong presence obviously for all of US I would just love to hear more on that first.

John Murphy: Basically production year to year.

John Murphy: And it is more production and supply constrained than it is demand constrained.

Speaker Change: Well I mean.

Speaker Change: Basically senior technical adviser for the chairman of the board.

John Murphy: That's really the reason, we're ramping up and want to make sure that we are ramping up with high quality.

Speaker Change: And.

Speaker Change: Strategic technical advisors again, he will not be part of the day to day business, but is there a question devising and the chairman.

John Murphy: And Thats the main reason.

John Murphy: We haven't trained at the time.

John Murphy: For air and <unk> together.

Speaker Change: It is worthwhile to involve Peter then hemo uptick.

Okay.

John Murphy: Final one on the <unk>.

Speaker Change: Up to the discretion of the chairman and to have that interaction.

John Murphy: <unk> credit.

John Murphy: Could you remind us what portion of your demand came from the the lease portion.

Speaker Change: Okay and then the other follow up.

Speaker Change: And then on gravity.

John Murphy: That's I think.

Speaker Change: I guess what.

John Murphy: What folks were thinking might go away just seeing of what headwind that could be for you guys.

Speaker Change: I understand capacity constrained on the <unk>.

Speaker Change: 20000.

Speaker Change: Yes.

Speaker Change: Are you guys still seeing that six times total addressable market for gravity versus a stance or has that been lowered by any chance that youre only doubling the size right now.

John Murphy: I think right now it's no secret that good portion or a big portion of.

John Murphy: All in <unk> sales in North America, our leases.

John Murphy: It also applies to us.

John Murphy: But I wanted to point out earlier, I said already that in our production numbers, and obviously linked and delivery numbers.

Speaker Change: From.

Speaker Change: Basically production year to year.

Speaker Change: That said it is more production and supply constrained than it is demand constrained.

John Murphy: Yeah.

John Murphy: We already anticipated regulatory changes.

That's mainly the reason we're ramping up we want to make sure that we are ramping up with high quality.

John Murphy: And how does that potentially impact our demand.

John Murphy: Maybe additional information on gravity as I've mentioned.

Speaker Change: And Thats the main reason.

Speaker Change: We haven't seen the Tam for Eric gravity together.

John Murphy: We only have orders for the Grand touring.

John Murphy: Hum.

John Murphy: The vast majority of that car right now is configured at prices around $120000.

Speaker Change: Okay and my final one on the <unk>.

Speaker Change: The IRI credit.

Speaker Change: Could you remind us what portion of your demand came from the the lease portion the IRA that's I think.

John Murphy: The price elasticity is not as big as when you talk about $60000 a vehicle $50000 a vehicle.

Speaker Change: What folks were thinking might go away just seeing us what headwind that could be for you guys.

John Murphy: It is not that we have not considered anything we actually did.

John Murphy: But we don't expect.

Speaker Change: I think right now it's no secret that good portion or a big portion of it.

Wayne: Thanks Wayne.

Speaker Change: Okay and last one on the licensing I think you mentioned there is very large Oems reaching out to have discussions.

Speaker Change: On EV sales in North America on leases.

Speaker Change: It also applies to us.

Wayne: I mean.

Speaker Change: But I wanted to point out early I said already that in our production numbers and obviously linked the delivery numbers.

Wayne: Is there any.

Wayne: Any more detail on that is that are they far along or is it just like kind of very introductory level.

Speaker Change: Yeah.

Speaker Change: We already anticipated regulatory changes.

Wayne: For these large Oems.

Wayne: Well I mean, it changes actually because yes for the ones that I just mentioned the 200 <unk> just reached our introductory but we have.

Speaker Change: And how does that potentially impact our demand.

Speaker Change: Maybe additional information on gravity as I've mentioned.

Wayne: Others that are much further along.

Speaker Change: We only have orders for the Grand touring.

Wayne: So and it's not only for upcoming technologies, even for technology as I mentioned for the powertrain that we already have.

Speaker Change: Hum.

Speaker Change: The vast majority of that car right now is configured at prices around $120000.

Wayne: So im not commenting on how far we are.

Speaker Change: The price elasticity is not as big as when you talk about a 60000 ton a vehicle 50000 tomo vehicle.

Wayne: Yes.

Wayne: We hope to surprise everybody.

Wayne: Okay. Okay. Thank you.

Wayne: Thank you.

Speaker Change: It's not that we have not considered anything we actually did.

Wayne: Please standby for our next question.

Speaker Change: But we don't expect.

Wayne: Our next question comes from the line of Stephens and Garo with Stifel. Your line is open.

Wayne: Thanks Wayne.

Speaker Change: Okay and last one on the licensing I think you mentioned theres very large Oems reaching out to have discussions.

Speaker Change: Thanks, Good afternoon everybody.

Two for me can you give us a sense for what we think about.

Wayne: I mean.

Wayne: Is there any.

Speaker Change: 2025.

Wayne: Any more detail on that is that far along or is it just like.

Speaker Change: How the how the mix of gravity mix.

Speaker Change: Impacts the progression on gross margins.

Wayne: Very introductory level for.

Wayne: For these large Oems.

Speaker Change: Yeah, absolutely. So if we look at fone.

Wayne: Well I mean, it changes actually because yes, the ones that I just mentioned the 200 <unk> just reached our introductory.

Speaker Change: Like <unk> five perspective, we said in the prepared remarks.

Wayne: Others that are much further along.

Speaker Change: Expect is significant improvement in gross margin.

Wayne: So and it's not only for upcoming technologies, even for technology as I mentioned for the powertrain that bill maybe half.

Speaker Change: In line with what we see in Q4 compared to <unk>. So we own the right project team.

Wayne: So im not commenting on how far we are.

Speaker Change: During this call we are not sharing the split with the integrity.

Wayne: Yes.

Wayne: We hope to surprise anybody.

Speaker Change: But we it's going to significantly improve.

Wayne: Okay. Thank you.

Wayne: Thank you.

Speaker Change: Okay. Okay.

Wayne: Please standby for our next question.

Speaker Change: And the other question was.

Speaker Change: Our next question comes from the line of Steven <unk> with Stifel. Your line is open.

Speaker Change: It's kind of come up given given sort of a demand expectations for grabbing Howard unfolds.

Speaker Change: Thanks, Good afternoon everybody.

Speaker Change: And could you ballpark for us either what you think like the <unk> production exit rate could be or how we should think about like a 2026.

Two for me can you give us a sense for what we think about.

2025.

Speaker Change: How the how the mix of gravity mix.

Speaker Change: Impacts the progression in gross margins.

Speaker Change: Production capability.

Speaker Change: Ill give more specific numbers of what you expect what kind of capacity would you have in 'twenty six once <unk> kind of rolling at the end of this year.

Speaker Change: Yeah, absolutely. So if we look at fone.

Speaker Change: Like 25 perspective, we've tightened the full 30 months.

Speaker Change: I'm not I'm not prepared to disclose this.

Expect is significant.

Speaker Change: In gross margin.

Speaker Change: Variability, we can add additional shifts for instance, so that's all things that will be going to decide.

In line with what we see in <unk> compared to 40 42 feet. So we own the right project team.

Speaker Change: Throughout 2025 <unk> CEO.

Speaker Change: During this call we are not changing the split with the integrity.

Speaker Change: How their demand evolves.

Speaker Change: And also when we then later in the year as mentioned.

Speaker Change: But we it's going to significantly improve.

Speaker Change: Orders for inventory.

Speaker Change: I think that has to wait a few quarters until we talk about them.

Speaker Change: Okay. Okay.

Speaker Change: And the other question was.

Speaker Change: Okay.

Speaker Change: I mean, it's kind of come up given given sort of a demand expectations for grabbing how it unfolds.

Speaker Change: I appreciate the context. Thank you.

Speaker Change: Thank you.

Speaker Change: Please standby for our next question.

Speaker Change: Could you ballpark for us what you think like the <unk> production exit rate could be or how we should think about like a 2026.

Speaker Change: Our next question comes from the line of Chris <unk> with Needham <unk> Company. Your line is open.

Speaker Change: Oh, Hey, good evening everyone.

I just love to hear why you want to lean into marketing so aggressively right now when you're demand constrained.

Speaker Change: <unk> capability without giving specific numbers of what you expect what kind of capacity would you have in 'twenty six once <unk> kind of rolling at the end of this year.

Speaker Change: Production constrained would it be that you are trying to market to air.

Speaker Change: The family in cars or is it trying to pre seed.

Speaker Change: I'm not I'm not prepared to disclose this I mean, we have variability we can add additional shifts for instance, that's all things that will be going to decide.

Speaker Change: A market for the touring edition I, just kind of want to get a sense of why lean into marketing. So soon.

Speaker Change: No, it's actually not not not really linked to the touring or for the year, but I mean compared to let's say established Oems still behind with brand awareness and we're a gravity coming to market. We have a very great opportunity to not only introduce a new car.

Speaker Change: Throughout 2025, when the CEO.

Speaker Change: Demand evolves.

Speaker Change: And also when we then later in the year as mentioned.

Speaker Change: Orders for inventory.

Speaker Change: I think that has to wait a few quarters until we talk about that.

Speaker Change: Okay.

Speaker Change: <unk>, but also introduce the brand to.

Speaker Change: Appreciate the context. Thank you.

Speaker Change: Our customers much at a much larger states in scale than we were able before and let's not forget.

Speaker Change: Thank you.

Speaker Change: Ladies standby for our next question.

Speaker Change: Our next question comes from the line of Chris <unk> with Needham <unk> Company. Your line is open.

Speaker Change: What we're working towards.

Speaker Change: Thanks.

And we're talking about a much bigger Tam a much bigger pool of.

Speaker Change: Oh, Hey, good evening, everyone I, just love to hear why you want to lean into marketing so aggressively right now when you're demand constrained.

Speaker Change: People that we need to.

Speaker Change: We need to reach and Thats, what we are paving the way for an important of that is.

Speaker Change: Production constraint would it be that you are trying to market to air.

Speaker Change: We continue.

Speaker Change: Continue to build the brands not only market vehicles, but continue to build the brand in order to really then season, you will see the demand.

Speaker Change: Our family of cars or is it trying to pre seed.

Speaker Change: Market for the touring edition I, just kind of want to get a sense of why lean into marketing.

Speaker Change: Soon.

Speaker Change: When the tide comes around.

Speaker Change: No, it's actually not not not really linked to the touring over for the year.

Speaker Change: Okay, and then not to put you on the spot too much but.

Speaker Change: I mean compared to move.

Speaker Change: I guess, if you think about <unk> as sort of the quasi closest comp we see them unable to generate positive gross margins without regulatory credits pick thousand units like.

Speaker Change: That must Oems still behind with brand awareness.

Speaker Change: Our gravity coming to market, we have a very great opportunity to not only introduce a new car, but also introduce the brand.

Speaker Change: Would you guys do you think you'd be ahead of that pace because of your lower battery input costs. So like what's the right way to think about longer term.

Speaker Change: Our customers much at a much larger states in scale than we were able before and.

Speaker Change: <unk>, we can make production of estimates, but like how should your margins kind of line up over time, when we think a little further out.

Speaker Change: Let's not forget.

Speaker Change: Just in terms of advantages and disadvantages versus peers.

Speaker Change: What we're working towards.

Speaker Change: Okay.

Speaker Change: To the extent you can speak to it.

Speaker Change: And we're talking about a much bigger a much bigger pool of.

Speaker Change: Yes, so I can take that.

Speaker Change: So first of all on <unk>.

Speaker Change: People that we need to.

Speaker Change: If we need to reach and Thats, what we are paving the way for an important for that is that.

Speaker Change: What's happening.

Speaker Change: But there are few things, which really don't apply to us.

Speaker Change: Debt.

Speaker Change: Continue to build the brands not only market vehicles, but to continue to build the brand in order to really the in season demand win win midsize comes around.

Speaker Change: And we are making efforts in our supply chain to look like that so let me take one by one so one.

Speaker Change: <unk> is basically when we look at on the manufacturing side of it which is battery in water.

Speaker Change: Okay, and then not to put you on the spot too much but.

Speaker Change: On that one.

Speaker Change: <unk>, we believe is less.

Speaker Change: I guess, if you think about <unk> as sort of quasi closest comp we see them unable to generate positive gross margins without regulatory credits picked out again, it's like.

Speaker Change: Then we are talking about of the 45 W, which is like a like $7500 credit.

Speaker Change: Which mark already covered at this one and then we are talking about <unk> 10.

Speaker Change: Would you guys do you think you'd be ahead of that pace because of your lower battery input costs. So like what's the right way to think about longer term production, we can make production estimates.

Speaker Change: It is related to import from Mexico, or Canada or steam.

Speaker Change: Should your margins kind of line up over time, but we think a little further out just in terms of advantages and disadvantages versus peers to the extent you can speak to it.

Speaker Change: You name it.

Speaker Change: And our production already embedded that in fact, we.

Speaker Change: We have we expect that if all things apply to us today like what is like factor that impact could be in the range of 7% and 12%.

Speaker Change: Yes, so I can take that.

Speaker Change: So first of all on <unk>.

Speaker Change: What's happening.

Speaker Change: But there are few things, which really don't apply to us.

Speaker Change: But we are taking efforts to mitigate and.

Speaker Change: And we are taking efforts, even though our supply chain to look like that so let me take one by one so one.

Speaker Change: I believe we are in much better shape compared to other Oems.

Speaker Change: Okay perfect. Thank you.

Speaker Change: Basically when we look at on the manufacturing side of it which is battery in water.

Speaker Change: Thank you.

Speaker Change: Please standby for our next question.

Speaker Change: On that one.

Speaker Change: <unk>, we believe is less.

Speaker Change: Our next question comes from the line of Andres Sheppard with Cantor Fitzgerald. Your line is open.

Speaker Change: Then we are talking about.

Speaker Change: The 45, W, which is like <unk> like.

Andres Sheppard: Hi, everyone. Good afternoon, and thanks for taking our questions.

Speaker Change: $7500 credit.

Speaker Change: Which mark already covered and disciplined and then we're talking about <unk>.

I think most of our questions have been asked already but maybe.

Andres Sheppard: Just wanted to touch on Asp's and gross margin once more.

Speaker Change: It is related to import from Mexico, or Canada or theme.

Andres Sheppard: How should we think about blended asp's for for 2025, now with the mix, including gravity and I guess on margins you mentioned.

Speaker Change: Nick.

Speaker Change: And our production only and that in fact.

Speaker Change: We have we expect that if all things apply to us today like what is like factor that impact could be in the range of 7% to 12%.

Andres Sheppard: The prepared remarks, you expect Q1 and Q2 to.

Andres Sheppard: To be relatively similar to Q4.

Andres Sheppard: What does the path to just.

Andres Sheppard: Just to build on one of the previous questions. What does the path to profit of profitable gross margins look like from a timeline perspective. Thank you.

Speaker Change: But we are taking efforts.

Speaker Change: To mitigate and I.

Speaker Change: I believe we are in much better shape compared to other Oems.

Andres Sheppard: And I think I mentioned that in my prepared remarks.

Speaker Change: Okay perfect. Thank you.

Andres Sheppard: When we look at the total year continue to fire.

Speaker Change: Thank you.

Speaker Change: Please standby for our next question.

Andres Sheppard: We expect the significant improvement in.

Speaker Change: Our next question comes from the line of Andrew Shepherd with Cantor Fitzgerald. Your line is open.

Matt: In line with what we had in <unk> and I believe you can do that Matt.

Andrew Shepherd: Hi, everyone. Good afternoon, and thanks for taking our questions.

Matt: Coming to light the ear and Iot now you look at that we are guiding basically quantity production last year was 9000 production. So now we have more scale.

Andrew Shepherd: I think most of our questions have been asked already but maybe.

Just wanted to touch on Asp's and gross margin once more.

Andrew Shepherd: How should we think about blended ASP for 2025, now with the mix, including gravity and I guess on margins you mentioned.

Matt: We first of all we are taking significant effort in the company.

About the cost travel cost transformation and when does it Walmart conversion cost will significantly decrease and we are consistently working we're going to quantify is a completely different product, we're talking about not multi thousand production.

Andrew Shepherd: The prepared remarks, you expect Q1 and Q2 to be relatively similar to Q4.

Andrew Shepherd: What does the path.

Andrew Shepherd: Build on one of the previous questions what does the path to a profit of <unk>.

Matt: Conversion cost significantly come down because of less fixed cost per week 11 change.

Andrew Shepherd: Profitable gross margins look like from a timeline perspective. Thank you.

And this also gives an opportunity to.

Andrew Shepherd: Yes, and I think I mentioned that in my prepared remarks.

Matt: <unk>.

Matt: Like.

Speaker Change: Lynn will look at the total year 2005.

Matt: How we deal with our suppliers so altogether.

Andrew Shepherd: We expect.

Matt: We are in the right trajectory we.

Andrew Shepherd: The significant improvement.

Matt: We are not guiding what will be.

Andrew Shepherd: In line with what we had in particular before and I believe you can do that math.

Matt: The procedure.

Matt: The range or the percentage <unk> thing is like today and a significant improvement because of a couple of factors that are taking place.

Andrew Shepherd: Coming to light.

Andrew Shepherd: And now.

Andrew Shepherd: You look at that we are guiding basically quantitatively production last year was 9000 production. So now we have more scale.

Matt: Got it Okay. That's helpful and I guess as a follow up regarding your partnership with the government of Saudi Arabia to deliver up to 100000 vehicles I think in the past you had mentioned that the.

Andrew Shepherd: We first of all we're taking significant effort in the company.

Andrew Shepherd: The cost.

Cost transformation and when does it former Canadian cost, we significantly decrease and we are consistently working but going to quantify it is a completely different track, we're talking about not multi thousand production.

Matt: I think the majority of this mix will comprise of the gravity and the mid size. So just wondering if you could confirm that and B. If you can maybe quantify a bit further how we should think about those deliveries I guess starting in late 'twenty five and throughout 2026. Thank you.

Andrew Shepherd: Conversion cost significantly come down because of lack of fixed cost per retail doesn't change.

Speaker Change: That is correct that it's mainly actually the <unk>, but also gravity higher and then the year, but we cannot disclose breakdowns.

Andrew Shepherd: And this also gives an opportunity to.

Andrew Shepherd: <unk>.

Andrew Shepherd: Like.

Andrew Shepherd: How we deal with our suppliers so altogether.

Matt: Because of our agreement.

Andrew Shepherd: We are in the right trajectory.

Matt: Okay Fair enough I guess, one more if I could squeeze it in.

Andrew Shepherd: We are not guiding what will be the procedure.

Matt: Yes, maybe a bit of a macro question.

<unk>.

Andrew Shepherd: The range.

Matt: With the potential or likely implementation of new tariffs.

Andrew Shepherd: The percentage liquid thing is like today and a significant improvement because of a couple of factors that are taking place.

Matt: In April the <unk>.

Speaker Change: Curious if you can maybe give us your thought as to how exactly you might be impacted and what can be done to try to mitigate some of that impact. Thank you.

Speaker Change: Got it Okay. That's helpful and I guess as a follow up regarding your partnership with the government of Saudi Arabia to deliver up to 100000 vehicles I think in the past you had mentioned that the.

Matt: Yes, I think on that one.

Speaker Change: I mentioned that.

Speaker Change: Impact, including tariffs and 45 that we have 45 X.

Speaker Change: City of this mix will comprise of the gravity and the mid size. So just wondering if you could confirm that and B. If you can maybe quantify a bit further how we should think about those deliveries I guess starting in late 'twenty five and throughout 2026. Thank you.

Speaker Change: Everything combined and you can factor in it could range from 7% to 12% of the gross margin impact.

Speaker Change: But we are taking mitigating factors localizing, our supply and we're taking all efforts there.

Speaker Change: That is correct.

Speaker Change: Mainly actually the mid size, but also gravity higher and then the year, but we cannot disclose breakdowns.

Speaker Change: That also bring us cost on localized supply.

Speaker Change: As an example, we just announced another deal on graphite.

Speaker Change: Because of our agreement.

Speaker Change: I'd say on top of the other ones that we already have and we're taking actions.

Okay Fair enough I guess, one more if I could squeeze it in.

Speaker Change: Yes, maybe a bit of a macro question.

Speaker Change: Wonderful. Thank you very much appreciate your time I'll pass it on.

Speaker Change: With the potential or likely implementation of new tariffs.

Speaker Change: Thank you.

Speaker Change: Please standby for our next question.

Speaker Change: In April.

Speaker Change: Curious if you can maybe give us your thought as to how exactly you might be impacted and then what can be done to try to mitigate some of that impact. Thank you.

Speaker Change: Our next question comes from the line of Adam Jonas with Morgan Stanley. Your line is open.

Adam Jonas: Thanks, everybody good evening gentlemen.

Speaker Change: Yes, I think on that one.

Speaker Change: I had a question on your artificial intelligence strategy.

Speaker Change: I mentioned that.

Speaker Change: Impact, including tariffs and 45 45 ex.

Speaker Change: It is the company's AI strategy.

Speaker Change: Everything combined and if we factor in it could range from 7% to 12% of the gross margin impact.

Speaker Change: Specifically with autonomy.

Speaker Change: Obviously, you have the partnership.

Speaker Change: With Nvidia and <unk> and Hyperion software defined platform.

Speaker Change: But we are taking mitigating factors localizing, our supply and we are taking all efforts there.

Speaker Change: But I don't I'm not.

Speaker Change: Sure you've commented on whether you've gone to an end.

Speaker Change: And that also bring us cost on and localized supply.

And Jenny I approach the way Manny.

Speaker Change: As an example, we just announced another deal on graphite.

Speaker Change: While the industry seems to be moving quite quickly and.

Speaker Change: If you are what would that mean in terms of your.

Speaker Change: In the United States on a couple of the other ones that we already have and we're taking actions.

Speaker Change: Expenditure and compute needs.

Speaker Change: Wonderful. Thank you very much I appreciate your time I'll pass it on.

Speaker Change: Sort of a follow up.

Speaker Change: Yes definitely.

Speaker Change: Thank you.

Speaker Change: Definitely take that so when it comes to our functionality on us for on a higher level.

Please standby for our next question.

Speaker Change: Our next question comes from the line of Adam Jonas with Morgan Stanley. Your line is open.

Speaker Change: And that's driving what I would point out first the Vlccs made quite some strides already in our current functionality over the last couple of months.

Speaker Change: Yes.

Adam Jonas: Thanks, everybody good evening gentlemen.

Adam Jonas: I had a question on your artificial intelligence strategy.

Speaker Change: Leverage the the centers that we already have in our vehicles and we continue to do so we're actually planning to roll out hence reviving later this year and hopefully we can surprise everybody with our.

Adam Jonas: What is the company's AI strategy.

Adam Jonas: Specifically with autonomy, obviously you have the partnership.

Adam Jonas: With Nvidia and dream, guys and the Hyperion software defined platform.

Speaker Change: Really that actually might be so that's something that we short term working on when it comes to the <unk>.

Adam Jonas: But I don't I'm not.

Adam Jonas: You commented on whether you've gone to an end.

Speaker Change: Technology yellow autonomous driving.

Adam Jonas: And Jen AI approach the way Manny.

Speaker Change: We need to keep in mind that over the last couple of months ago, maybe a year the goalposts have shifted.

Adam Jonas: The industry seems to be moving quite quickly.

Adam Jonas: If you are what would that mean in terms of your.

Speaker Change: Nowadays and technologies.

Speaker Change: Their expenditure.

Speaker Change: Mainly mainly AI based amongst different formats.

Adam Jonas: Acute needs.

Adam Jonas: Sort of a follow up thanks.

Speaker Change: And from what we've done and you've seen in the past where other players have invested billions of basically have nothing to show for that is now changing having said that we are.

Adam Jonas: Yes.

Adam Jonas: Let me take that so when it comes to our functionality on us for on a higher level.

Speaker Change: Are considering different growth right now we are extensive.

Adam Jonas: And that's driving.

Adam Jonas: <unk> actually made quite some strides already in our current functionality over the last couple of months.

Speaker Change: Extensive discussions with potential partners to partner on this particular topic. When also with what I just said with the goalposts shifting we are analyzing whether it would be worthwhile for us to completely in Tulsa.

Adam Jonas: Bethany.

Speaker Change: Leverage the centers that we already have in our vehicles.

Speaker Change: And we continue to do so we're actually planning to roll out hence reviving later this year and hopefully we can surprise everybody with our.

Speaker Change: But we don't have and haven't made that decision yet we're right now focusing on the short term.

Speaker Change: Really that actually might be.

Implementation and improvement of the of the technology that we have in our cards.

Speaker Change: Short term working on when it comes to the <unk>.

Speaker Change: <unk>.

Speaker Change: Gravity, obviously upcoming but then also in India.

Speaker Change: Technology.

Speaker Change: What was driving that.

Speaker Change: Then we need to keep in mind that although not.

Speaker Change: While we are.

Speaker Change: A couple of months ago, maybe a year the goalposts have shifted.

Speaker Change: Doing this analysis.

Speaker Change: Hi.

Speaker Change: Things have changed in the last year, we would have made it. This is one year ago, we only would have been on the wrong track.

Speaker Change: Nowadays and technologies.

Speaker Change: And then the AI based amongst different formats.

Speaker Change: And from what we've done and you've seen in the past where other players have invested billions of basically have nothing to show for that is now changing having said that.

Speaker Change: Okay. I appreciate that just just as a follow up I didn't know if you care to address.

Speaker Change: The messaging from your largest shareholder obviously with the agreements in place too.

Speaker Change: We are considering different rocks right now, yes, we are.

Speaker Change: After extensive discussions with potential partners to partner on this particular topic on also with what I just said with the goalpost shifting we are analyzing whether it would be worthwhile for us to completely intelsat.

Speaker Change: Lower the stake potentially to as low as 45%.

Speaker Change: Billions of dollars at the current share price I know that was that shelf was kind of previously.

Speaker Change: This was previously out there but in identifying.

Speaker Change: When we don't have and haven't made that decision yet we're right now focusing on the short term.

Speaker Change: But your largest shareholder it does raise the question in terms of whether you would be a controlled company.

Speaker Change: Implementation, an improvement off of the technology that we have in our cards.

Speaker Change: If they were to fall below 50%.

Speaker Change: Getting some questions about that and we'll just.

Speaker Change: Revenue, obviously upcoming but then also.

Speaker Change: Two here.

Speaker Change: Messages that you wanted to convey to the extent that you can on that on that position. Thanks.

Speaker Change: While we are.

Speaker Change: This is another.

Adam Jonas: Yeah, I think Adam on the ownership percentage would be.

Speaker Change: Things have changed in the last year, we would have made a decision one year ago only would have been on the wrong track.

Adam Jonas: The new business 58, 4% based on the number of shares issued.

Speaker Change: Okay I appreciate that just just as a follow up.

Adam Jonas: Yeah.

Speaker Change: I didn't know if you care to address.

Adam Jonas: Right, but those agreements to reduce that right.

Speaker Change: The messaging from your largest shareholder obviously with the agreements in place too.

Adam Jonas: Alright.

Adam Jonas: All.

Adam Jonas: None that I'm aware of.

Speaker Change: Lower the stake potentially to as low as 45%.

Speaker Change: Billions of dollars at the current share price I know that was shelf was kind of previously.

Adam Jonas: Okay, we'll follow up.

Adam Jonas: Sure.

Adam Jonas: Thank you. Thank you.

Speaker Change: This was previously out there but in identifying.

Adam Jonas: Please standby for our next question.

Speaker Change: But your largest shareholder it does raise questions in terms of whether you would be a controlled company.

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

Speaker Change: If they were to fall below 50%.

Speaker Change: Hi, everybody.

Speaker Change: Getting some questions about that and we'll just.

Speaker Change: Just have a question on.

Speaker Change: Love to hear any more.

Speaker Change: Saudi Arabia shipments in 2024 by my estimation would have totaled something close to 2100, just based on the regions generated revenue of $179 million.

Messages that you wanted to convey to the extent that you can on that on that position.

Adam Jonas: Yes, I think Adam on the ownership percentage would be.

Speaker Change: For your 10-K is that the right ballpark figure in terms of unit volume and just how should we be thinking about Saudi deliveries for this year given the importance of that contribution.

Adam Jonas: This is 58, 4% based on the number of shares issued.

Adam Jonas: Yes.

Speaker Change: Sure.

Adam Jonas: Alright, but theres agreements to reduce that right.

Speaker Change: First is on looking at it.

Adam Jonas: Alright.

Speaker Change: At all.

Speaker Change: So like.

Adam Jonas: Or.

Adam Jonas: None that I'm aware of.

Speaker Change: So the government has a commitment of up to like 50000 vehicle with an option for another 50000 vehicles.

Adam Jonas: Okay, we'll follow up.

Speaker Change: And we said.

Adam Jonas: Appreciate it.

Speaker Change: Previously and the Mod will go towards like the midsized metagalaxy than air.

Adam Jonas: Thank you. Thank you.

Adam Jonas: Please standby for our next question.

Speaker Change: Now we are going from 9000 production to 20 <unk> production.

Adam Jonas: Our next question comes from the line of James Picariello with BNP Paribas. Your line is open.

Speaker Change: We expect like in 2025.

Adam Jonas: Hi, everybody.

Speaker Change: Proportion of Saudi Arabia come down and more go towards.

Speaker Change: Just have a question on.

Speaker Change: Saudi Arabia shipments in 2024 by my estimation would have totaled something close to 2100, just based on the regions generated revenue of $179 million.

Speaker Change: Towards the North America.

Speaker Change: Okay.

Speaker Change: Okay, and then just to Q2.

Speaker Change: Are your 10-K is that the right ballpark figure in terms of unit volume and just how should we be thinking about Saudi deliveries for this year given the importance of that contribution.

Speaker Change: Two a quick two part one.

Speaker Change: The 20000 units production guidance for this year given that gravity production is going to be capacity constrained you can't give us the estimation on what the gravity volumes.

Speaker Change: Sure.

Speaker Change: First looking at it.

Speaker Change: At all.

Speaker Change: Mike.

Speaker Change: Within that that production figure.

Speaker Change: So the government has a commitment of up to like 50000 vehicle with an option for another 50000 weakened.

Speaker Change: Then as we think about the mid sized crossover starting in late 2006 will production solely to take place in Saudi Arabia and in your Amp to plan for that crossover or when or will it get produced in Arizona as well or will it will really just strictly be dependent on on imports into the U S.

Speaker Change: And we said previously.

Speaker Change: Previously and the Mod will go towards like the midsize mitigated with you then.

Speaker Change: Now we are going from 9000 production to 20 <unk> production.

Speaker Change: We expect like in 2025.

Speaker Change: Yes.

Speaker Change: We're not disclosing the mix, but I mean, it's clear obviously, the beginning of the year.

Speaker Change: Proportion of Saudi Arabia come down and more go towards.

Speaker Change: Towards the North America.

Speaker Change: The gravity is low as while we while we are ramping up and then.

Speaker Change: Okay.

Speaker Change: Victor will change.

Speaker Change: Okay, and then just the Q2 two.

Speaker Change: Over over the year, given the fact that the gravity hazard.

Speaker Change: Tim then.

Speaker Change: Two a quick two part one.

Speaker Change: Here.

Speaker Change: The 20000 units production guidance for.

Speaker Change: And when it comes to mid size.

We have one but we also are trading.

Speaker Change: For this year.

Speaker Change: Given that gravity production is going to be capacity constrained you can't give us the.

Speaker Change: And two in Saudi Arabia with the answer.

Speaker Change: They're all trading in one right now to produce vehicles to be locally.

Speaker Change: Estimation on what the gravity volumes.

Speaker Change: In North America.

Speaker Change: Our within that that production figure.

Speaker Change: Okay. So both plants will produce the crossover.

Speaker Change: And then as we think about the mid sized crossover starting in late 2006.

Speaker Change: Correct.

Speaker Change: Thank you.

Speaker Change: All production solely take place in Saudi Arabia in your App to plan for that crossover or when or will it get produced in Arizona as well.

Speaker Change: Thank you.

Speaker Change: Ladies and gentlemen at this time I would now like to turn the call back over to <unk> for closing remarks.

Speaker Change: So this concludes <unk> fourth quarter and full year 2024 earnings conference call. Thanks, everyone for joining us today and you may now disconnect.

Speaker Change: Well it just strictly be dependent on on imports into the U S.

Speaker Change: No.

Speaker Change: Not disclosing.

Speaker Change: But I mean, it's clear obviously, the beginning of the year.

Speaker Change: Ladies and gentlemen that concludes today's conference call. Thank you for your participation you may now disconnect.

Speaker Change: The gravity.

Speaker Change: While we while we are ramping up and then.

Speaker Change: Victor will change.

Speaker Change: Over over the year, given the fact that <unk> has a higher <unk> than <unk>.

Speaker Change: <unk>.

Speaker Change: And when it comes to mid size.

Speaker Change: And one must be also ultra deep two in Saudi Arabia, with the alcohol training and one right now to produce vehicles will be locally.

Speaker Change: In North America.

Speaker Change: Okay. So both plants will produce the crossover.

Speaker Change: Correct.

Speaker Change: Thank you.

Speaker Change: Thank you.

Speaker Change: Ladies and gentlemen at this time I would now like to turn the call back over to <unk> for closing remarks.

Speaker Change: So this concludes <unk> fourth quarter and full year 2024 earnings conference call. Thanks, everyone for joining us today and you may now disconnect.

Speaker Change: Ladies and gentlemen that concludes today's conference call. Thank you for your participation you may now disconnect.

Speaker Change: Okay.

Speaker Change: [music].

Speaker Change: Okay.

Speaker Change: Yes.

Speaker Change: Yes.

Speaker Change: Okay.

Speaker Change: [music].

Speaker Change: Okay.

Speaker Change: [music].

Speaker Change: Okay.

Speaker Change: [music].

Speaker Change: Yes.

Speaker Change: Yes.

Speaker Change: [music].

Speaker Change: Yes.

Speaker Change: [music].

Speaker Change: Yes.

Speaker Change: [music].

Speaker Change: Yes.

Speaker Change: Sure.

Speaker Change: Thanks.

Speaker Change: Yes.

Speaker Change: [music].

Speaker Change: Okay.

Speaker Change: [music].

Okay.

Speaker Change: Yes.

Speaker Change: Thank you.

Speaker Change: [music].

Speaker Change: Okay.

Speaker Change: Sure.

Speaker Change: [music].

Speaker Change: Yes.

Speaker Change: [music].

Speaker Change: Yes.

Speaker Change: Okay.

Speaker Change: Sure.

Speaker Change: Sure.

Speaker Change: Okay.

Speaker Change: [music].

Speaker Change: Hi.

Speaker Change: Okay.

Speaker Change: [music].

Speaker Change: Yes.

Speaker Change: [music].

Speaker Change: Yes.

Speaker Change: Sure.

Speaker Change: Yes.

Speaker Change: [music].

Speaker Change: Okay.

Speaker Change: Yes.

Speaker Change: Thank you.

Speaker Change: [music].

Speaker Change: Okay.

Speaker Change: Okay.

Speaker Change: Okay.

Speaker Change: Okay.

Speaker Change: Okay.

Speaker Change: Okay.

Speaker Change: Okay.

Speaker Change: Yes.

Speaker Change: Okay.

Speaker Change: Okay.

Speaker Change: Okay.

Speaker Change: Thanks.

Speaker Change: Yes.

Speaker Change: [music].

Speaker Change: Thank you.

Speaker Change: Okay.

Speaker Change: Okay.

Speaker Change: Okay.

Speaker Change: Okay.

Speaker Change: Okay.

Speaker Change: So.

Speaker Change: Okay.

Okay.

Speaker Change: Okay.

Speaker Change: [music].

Speaker Change: Okay.

Speaker Change: Right.

Speaker Change: Yes.

Speaker Change: Okay.

Speaker Change: Yes.

Speaker Change: Yes.

Speaker Change: Okay.

Speaker Change: Okay.

Speaker Change: Yes.

Speaker Change: Okay.

Okay.

Speaker Change: Yes.

Speaker Change: Okay.

Speaker Change: [music].

Speaker Change: Okay.

Speaker Change: Okay.

Speaker Change: Yes.

Speaker Change: [music].

Speaker Change: Okay.

Speaker Change: Sure.

Speaker Change: Okay.

Speaker Change: Okay.

Speaker Change: Okay.

Speaker Change: Okay.

Speaker Change: Okay.

Speaker Change: Okay.

Speaker Change: Okay.

Speaker Change: Yes.

Speaker Change: Right.

Speaker Change: [music].

Speaker Change: Okay.

Speaker Change: Okay.

Speaker Change: [music].

Speaker Change: Hello, and welcome to look at Q4 2024 earnings call.

Speaker Change: At this time all participants are in a listen only mode.

Speaker Change: After the speaker's presentation, there will be a question and answer session.

Speaker Change: To ask a question during the session you will need to press star one on your telephone.

Speaker Change: You bet, Dan here automated message advising your hand is raised.

Withdraw your question. Please press star one again.

Speaker Change: Now I'd like to turn the conference over to.

Speaker Change: You may begin.

Speaker Change: Thank you and welcome to lucid group's fourth quarter 2024 earnings call. Joining me today are mark winter half, our interim CEO Gorgon Bindra senior Vice President of Finance and principal accounting officer, and <unk> <unk> CFO.

Speaker Change: Before handing the call over to Mark Let me remind you that some of the statements on this call include forward looking statements under Federal Securities Laws. These include without limitation statements regarding the future financial performance of the company production and delivery volumes vehicle and products Studios and service networks financial and operating outlook and guidance.

Speaker Change: <unk> policy and industry trends company initiatives and other future events. These statements are based on the predictions and expectations as of today and actual events of results may differ due to a number of risks and uncertainties. We refer you to the cautionary language in the risk factors in our most recent filings with the SEC and.

Speaker Change: Forward looking statements on page two of our investor deck available on the Investor Relations section of our website at IR Dot lucid motors Dot com in.

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 the Investor deck.

Mark Winter: With that I'd like to turn the call over to <unk> interim CEO Mark Winter off Mark. Please go ahead.

Mark Winter: Thank you May note and thank you everyone for joining us in our 2024 and fourth quarter earnings call.

Mark Winter: This is my first time speaking to you as interim CEO I am honored the board has named me two this will lift a pivotal and exciting time in the company's journey.

Mark Winter: It's a true pleasure to be here and share our vision progress in the remark.

Mark Winter: Slides lucid has made in 2024.

Speaker Change: Before I get to my prepared remarks, I'd like to first thank Peter.

Speaker Change: Peter found it lose it as you know it today, helping to bring the world's most advanced TV technology lucid air.

The world's best for them and the lucid gravity and SUV was truly no compromise.

Speaker Change: Under his leadership.

Speaker Change: <unk> built the most advanced Greenfields EV manufacturing plant in the U S.

Speaker Change: Built assurance car plant in Saudi Arabia.

Speaker Change: The company's first technology supply agreement with an OEM.

Speaker Change: And put us on a determined path to further advance the state of the out of electrical cars.

Speaker Change: Our next generation <unk> and the mid sized platform.

Speaker Change: I could probably spend the entire hour speaking to his accomplishments Buffalo Peter put together an incredible team to advance the company's mission and I'm honored to lead this team into the next phase of its journey.

Speaker Change: This six nicely into my delight to introduce today lucid CFO to seek crusade.

Speaker Change: <unk> brings very strong financial experience as a CFO that aligns very well with our long term strategy.

Speaker Change: He has decades of experience in strategic finance and operational transformation with a proven ability to align financial strategy with business objectives.

Speaker Change: As we scale our operations efficiently.

Speaker Change: Joined us a few weeks ago, but it is already getting into the thick of it would you like to give a brief introduction.

Speaker Change: Thanks Mark.

Speaker Change: Hello, everyone I couldnt be more excited to be here at Youll see that such with pivotal enrollment not just for the company, but for the entire industry. We are in the middle of a once in a generation shift towards electrification.

Speaker Change: Is the secular shift and lucid is at the leading edge of that transformation.

Speaker Change: What immediately struck me about lucid is that this isn't just another car company. It's a company built on engineering excellence Mod innovation and a clear vision to redefine the future of sustainable mobility and Thats exactly what im here.

Speaker Change: My career I've had the company has navigated through complex transformation growth expansions and launched Ken operational turnarounds.

Speaker Change: I've worked in industries, where disruption competition, a rapid change where constant realities and I've seen firsthand what it takes for a company to go from a visionary.

Speaker Change: Two financially strong globally scaled business. The key to success is about smart capital allocation operational efficiency and making sure we set up for long term profitable growth.

Speaker Change: At lucid, we have world class technology industry, leading efficiency and a brand that stands for performance and luxury.

Speaker Change: But as we move into the next phase scaling production optimizing operations and accelerating growth, bringing financial discipline will be more critical than ever.

Speaker Change: What really excites me is the opportunity ahead. The EV market is still in its early days and as demand continues to grow the real challenge is scaling scaling efficiently operating smartly and driving sustained financial performance, that's where my focus will be ensuring we scale.

Speaker Change: Efficiently balancing growth with operational excellence driving financial discipline on smart capital allocation, while making sure we invest in the right areas to maximize long term value and strengthening our financial strategy. So that we're not just building great cost, but also building a sustainable.

Speaker Change: Profitable company that delivers for our investors and stakeholders.

Speaker Change: I've had the chance to drive the lucid and experienced a new CD gravity and I can confidently say that these are game changing vehicles, but great projects alone don't make a great company. It takes strong execution clear financial roadmap and the right leadership to current potential into sustain.

Speaker Change: <unk> success.

Speaker Change: That's why I'm here and Thats, why I am committed to delivering over the coming weeks and months I look forward to engaging with our investors analysts and key stakeholders sharing more about our strategy and working with this incredible team to make Lucy the true powerhouse engine industry.

I'm honored to be here and I can't wait to get started thank you.

Speaker Change: Thank you to fleet.

Speaker Change: I also want to take a moment to give a special thank you to guide on <unk> for.

Speaker Change: For his great work as our interim CFO.

Speaker Change: <unk> is an incredible example of lucid experienced internal talent that we can utilize to maintain seamless continuity.

Speaker Change: I'd also like to congratulate him on his promotion and expanded role as senior Vice President of Finance and accounting. In addition to his role as principal accounting officer.

Speaker Change: We look forward to your continued contributions to loosen I believe two fixed edition and Goggans promotion sent the finance organization up for continued success in accelerating our strategic priorities that lucid.

Now turning to the business.

Speaker Change: 2024, it wasn't incredible year for lucid with.

Speaker Change: We established ourselves as the preeminent leader in EV technology, producing the longest range for our fifth strategy most efficient sedans on the market achieving a market lead at five months per kilowatt hour.

Speaker Change: We saw four consecutive quarters of record deliveries Cigna.

Speaker Change: Significant year over year improvements in gross margin in our working capital delivered our first lucid gravity Suvs and strengthened our balance sheet.

Speaker Change: I think it's fair to say that our say do ratio was very good.

Speaker Change: These accomplishments are a testament to the hard work and to support the looser team our supply chain partners and our strategic partner the Pis.

Speaker Change: We are grateful for all of their continued support.

Speaker Change: Now to the numbers.

Speaker Change: In 2024, we produced 9000 and 2009 vehicles with deliveries of 10241.

Speaker Change: Our record year.

Speaker Change: But let me put this in context for you.

Speaker Change: In 2024, the lucid air was the third best selling event in its segment in the U S. According to <unk> intelligence.

But that does not reflect the momentum begin because we were the number one best selling EV in the back half of 2020 for fluids segment.

Speaker Change: And the third best selling vehicle when including all gas powered vehicles through the segment.

Speaker Change: I think this is worth repeating.

Speaker Change: The lucid air was the number one best selling even in the second half of 2020 for fourth segment.

Speaker Change: And the third best selling vehicle among all vehicle in its class, including gas powered vehicles.

Speaker Change: Think about that for a second.

Speaker Change: We outsold many of the most storied and well known brands in the automotive industry in both the EV and the gas market.

Speaker Change: This is a testament to how much customers love the lucid air.

I love, how it drives performance.

Speaker Change: <unk> ability the design the charging speed the interior space and the range of course.

Speaker Change: Now I'll tell you why this is so important as we enter 2025.

Speaker Change: Because everything that customers love about the air we brought to the lucid gravity.

Speaker Change: This is why we are tremendously optimistic about Duluth, the gravity in the SUV segment.

Speaker Change: In the coming weeks, we expect virtually all of our studios to have showroom and test drive cars.

Speaker Change: Some buyers can see and feel just how great. It is for themselves.

Speaker Change: Turning to the Lewis did gravity demand.

Speaker Change: We opened U S orders.

Speaker Change: Gravity Grand touring in November of last year and orders have exceeded my expectations. We've opened the orders for the Grand tour in the U S and <unk>.

Speaker Change: Order before the gravity Grand touring are exceeding the air Grand touring by far in the same timeframe.

Speaker Change: And this is with an intentionally very limited marketing Bush, which you can expect us to significantly ramp up through 2025.

Speaker Change: Mark late Q1 in your calendars, we are working on something truly special.

Speaker Change: And we expect to open orders for the Turing to emulate this year. So we feel very optimistic about the large market opportunity ahead.

Speaker Change: Okay.

Speaker Change: I'd also highlight that will more than three quarters of the elusive gravity orders are new customers to use it.

Speaker Change: Duluth gravity is attracting new people to the brand again, despite very limited marketing.

As we ramp up the number of lucid gravities on the road.

Speaker Change: And our marketing campaigns, we anticipate seeing a strong growth trajectory like we saw with the lucid air but in a much larger market opportunity.

Speaker Change: I'd like to add that.

Speaker Change: Thus far while we priced the risk gravity Grand touring attractively, starting at $94 $900, we're seeing customers ordering highly optioned clipped configurations.

Speaker Change: A significant portion of the orders have a configured price of above $120000.

Speaker Change: He has more than two thirds opening for the sentence either.

Speaker Change: We would expect this trend to go down over time, as we mix in less liquid considerations for inventory.

Speaker Change: Others are moving away from larger three row SUV.

Speaker Change: It's challenging to create an SUV with lots of space without sacrificing range, where having a notch battery pack that makes it less financially attractive to make.

Speaker Change: But we felt that problem.

Speaker Change: With our technology and I think customers will be really happy with the lucid gravity I.

Speaker Change: I believe it's very unique in the industry.

Speaker Change: Customers have been telling me that it has every feature the London in SUV and it's underpinned by our industry, leading technology that customers can only expect from lucid.

Speaker Change: In December we launched compromise nothing is our brand promise with a hero video and a campaign.

Speaker Change: I have to say I am impressed by the response of the positive feedback.

Speaker Change: I think we found the perfect way of expressing what Louis It is all about.

Speaker Change: The customers can expect from joining the <unk> family.

Speaker Change: We once again achieved the highest level of brand awareness among customers intending to purchase evs.

Speaker Change: And we're just getting started.

Speaker Change: We have a long list of exciting and creative concepts. We are working on stay tuned in 2025, we will take a much bolder approach on marketing than ever before and lucid starting with the lucid gravity in just a few weeks' time in New York City.

Speaker Change: Okay.

Speaker Change: Now, we're going to put a lot of focus on quality and ensure customers get what they expect from the lucid brand.

Speaker Change: As mentioned last quarter. This means we will have more gradual delivery ramp in the first quarter.

Speaker Change: We will prioritize lucid gravities four showrooms in test drive.

Speaker Change: Which I think is the right strategy and one of the key learnings from the lucid aired launch we want our customers to be able to experience solicit gravity.

Speaker Change: We are also working with our suppliers to ensure they can ramp with high quality parts and support our production ramp in Q2.

Speaker Change: We also opened orders in Saudi Arabia in early February and we expect to start producing a number of lucid gravities from customers there.

Speaker Change: These vehicles will be in trended in the first quarter for final production at our <unk> factory in the second quarter. So youll see those in our Q2 production numbers.

Speaker Change: Now turning to Europe.

Speaker Change: Still early but we continue to see traction and thats. Despite the very tough markets, where you have eastern Europe. These days, especially in our segment.

Speaker Change: And we have our eyes set on accelerating our progress we have added additional sales studio within service centers for example in Germany.

Speaker Change: And we are accelerating the growth of our retail footprint and market coverage in Europe by introducing additional distribution channels like importers and the agency models for select countries. In addition to our existing direct to consumer model.

Speaker Change: Yeah.

Speaker Change: We are very excited about 2025 and expect another big year.

We expect to produce approximately 20000 vehicles.

Speaker Change: With continued growth in 2026, as we get a full year of Luther gravity further brand awareness growth and more maturity in the business and markets.

Speaker Change: This will take us to mid size with scheduled start of production in late 2026.

Speaker Change: I was just down in the studio.

Speaker Change: And I can tell you the vehicle look amazing.

Speaker Change: I think customers are going to love them and I can't wait to show them to you.

Speaker Change: I don't want to reveal too much but we are currently planning to unveil them late this year or early next year.

Speaker Change: In closing I'd like to highlight the four strategic priorities I am focused on first.

Speaker Change: I continue to be laser focused on driving our growth of customer deliveries of our high quality and technology leading vehicles.

Speaker Change: As mentioned before this includes doubling down on marketing across regions. We are activated.

Speaker Change: <unk>, our retail footprint and distribution channels and most importantly ramping production of the looser gravity.

Speaker Change: Second.

Speaker Change: Continue to advance our technology leadership in vehicle, especially powertrain technology, but equally important further advancing our advanced driver assistance system functionality for example by introducing hence we driving which we expect to roll out later this year.

Speaker Change: Third.

Speaker Change: Bringing our three mid size vehicles to market with the first vehicle scheduled for startup production in late 2026.

Speaker Change: In fact, we signed off on the advanced engineering phase of two of the Midland to areas, which will now move to the development and the industrialization phase.

Speaker Change: This includes the Aetna powertrain, which is well under development and is all about a lower cost version of our Zeus powertrain in the year.

Speaker Change: Fourth <unk>.

Speaker Change: Expanding our technology license business and drive forward other new technology monetization options.

This will be a core focus in terms of the discussions that are already well underway as well as examining new opportunities.

Speaker Change: And of course underpinning all of this will be a laser focus on cost and efficiency.

Speaker Change: Which will be enhanced with the partnership with Mr. <unk>.

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

Speaker Change: Thank you Mark and thank you to those who were taking the time to join us today.

Speaker Change: Before I get to my prepared remarks, I wanted to take a moment to express my gratitude for Peter's leadership and guidance contributions and for his continued vision to drive the company's success.

I am grateful for the applicability to learn and grow under his leadership.

Speaker Change: I would also like to take this opportunity to thank the leadership team the board of directors and the entire lucid team for the unwavering support.

It was an honor and privilege to serve as the company's interim CFO. It was also plaza, telling the Lucius facility and getting to know so many of you in the analyst and Investor community.

Speaker Change: I truly appreciate the thoughtful discussions and insights you have shared.

Speaker Change: You mean deeply appreciative of the relationships, we have built and the journey, we have taken together over the last several earning calls.

Speaker Change: As I turn my focus to my new and expanded growth I would like to take the simplicity to officially welcome Tawfeeq to Duluth team.

Speaker Change: Turning to our clinical default and fourth quarter results.

Mark: As Mark mentioned 'twenty 'twenty four.

Speaker Change: Transformational year for lucid were delivered.

Speaker Change: Four consecutive quarters of record deliveries.

Speaker Change: Significant improvement in gross margins.

Speaker Change: Nearly carry them on a year over year basis, and we expect significant improvement in 2025.

Speaker Change: We successfully managed operating expenses.

Speaker Change: Strategic growth investments delivering on our guidance for operating margin improvement year over year.

Speaker Change: We strengthened our balance sheet with continued strong support from our strategic partner in the PAA.

Speaker Change: As well as new investors in our last transaction.

Speaker Change: And we also significantly improved working capital behind strategic improvement in inventory management and despite mixed headwinds.

Speaker Change: We have a lot to be proud.

Speaker Change: In light of the challenges, we and the industry face.

Speaker Change: But critical mass that we still have a lot more work to do.

Speaker Change: The team is invigorated with the lucid gravity ramp still ahead of us and as we get closer to the launch of our higher volume mid sized platform.

Speaker Change: Turning to production and deliveries.

Speaker Change: In 'twenty 'twenty four we produced 9009 vehicles.

Speaker Change: Up 7% year over year and in line with our guidance of approximately 9000 vehicles.

Speaker Change: While delivering 10200 40 million vehicles up 71% year over year.

Speaker Change: During the fourth quarter.

Speaker Change: We produced 3386 vehicles.

Speaker Change: 42% year over year.

Speaker Change: And up 88% sequentially.

Speaker Change: And delivered 3099 vehicles.

Speaker Change: 79% at year end up 11% sequentially.

Speaker Change: This was the primary driver of the $234 $5 million in revenue for the quarter.

Speaker Change: GAAP gross margin for <unk> was negative 114% plus.

Speaker Change: A significant improvement from the negative 225% in particular.

Speaker Change: In the fourth quarter GAAP gross margin was negative 89%.

Speaker Change: This included a favorable impact related to a net supply recovery, which we were able to successfully negotiate.

Speaker Change: Excluding this benefit gross margin of negative 108% was similar to the third quarter and in line with the guidance we provided.

Speaker Change: In 2025, we expect another year of significant gross margin improvement similar to the trend in 2024.

Speaker Change: We expect this improvement to be driven by a combination of production scale mix and continued focus on cost reductions.

Speaker Change: Gross margin for the first half of 2025 is expected to be near the levels of Q4 before excluding the one time favorable recovery benefit.

Speaker Change: This is due to onetime incremental costs associated with the lucid gravity ramp up and then significantly improve with scale in the second half of the year.

Speaker Change: We expect Q1 to be more impacted by seasonality.

Speaker Change: Then improved in Q2 with the ramping of the elusive gravity.

Speaker Change: Turning to Opex.

Speaker Change: R&D in 2024.

Speaker Change: Similarly, one 1 billion.

Speaker Change: Up 26% year over year, driven largely by gravity investments.

Speaker Change: R&D in the fourth quarter of $280 million was down from $324 million in the prior quarter.

Speaker Change: Cost related to gravity diminished with the startup production.

Speaker Change: And can you quantify we expect R&D to steadily increase throughout the year as we ramp up let's say an uplift in restaurants.

Speaker Change: SG&A included 24 was $901 million.

Speaker Change: Up 13% year, and $242 9 million in the fourth quarter.

Speaker Change: Four by 4% sequentially.

Brian: Lithium clarity as an opportunity for lucid to excellent it's Brian.

Brian: <unk> new product in a much more desirable ethylene market segment.

Brian: Expect more muscle behind the lucid gravity to drive sales and brand awareness.

Brian: We expect to be able to leverage that brand awareness growth into the Midwest market with the midsize vehicles, we expect to start producing in late 'twenty or 'twenty six.

Brian: We expect operating expenses in 2025, as a percentage of revenue to improve by more than 100 percentage points.

Brian: Turning to other income in Q4, we recorded a gain of $292 6 million in other income from a change in fair value of derivative liability and.

A corresponding total accretion of $239 7 million.

Brian: <unk> with our redeemable convertible preferred stock under our line item below net loss.

Brian: This was mainly due to the decrease in our share price at the end of the fourth quarter compared to the prior quarter.

Brian: Adjusted EBITDA in Q4, 2004 was approximately negative $577 million in.

Brian: An improvement of 6% from Q3 2024.

Brian: Move to the balance sheet.

Brian: We ended the quarter with approximately $5 8 billion in cash cash equivalents.

Brian: Restaurants and equity Securities.

Brian: Total liquidity of approximately 6.13 billion.

Brian: This does not include the Mr grants or the <unk>.

Brian: <unk> loans.

Brian: Additionally, we also renewed an upsized the TWD 30 facility.

Increasing the commitment amount from 1 billion, so the real to $1 9 million so the real.

Brian: Further improving our liquidity profile by approximately $240 million in U S dollars.

Brian: And demonstrating strong support from our global banking network.

Brian: Turning to inventory inventory was $407 $8 million in Q4, 44 down from 5% to $6 8 million in Q3 2024 due to continuous improvement in inventory management.

Brian: Capital expenditure for 2024 was $883 8 million.

Brian: Slightly below the $1 billion, we guided to on our third quarter earnings Conference call.

Brian: The lower Capex was primarily related to the deferral of projects into 'twenty quantified.

Brian: Before moving to the outlook for clinical defy let me touch on some external factors.

Brian: The industry faces a number of uncertainties with regard to potential policy and regulation changes in the U S.

Brian: We have been working tirelessly to find ways to mitigate some of these impacts.

For example, we have been taking steps to localize supply.

Brian: We have also exited certain supply chain optimization efforts that we think could help.

Brian: To get some of the tariff impacts.

Brian: As we understand them today.

Brian: And we expect some of these actions should also benefit us from a cost perspective.

Brian: Of course, we don't expect to be immune from potential policy changes and understanding precise impact has a number of dependencies.

Brian: We're closely monitoring the situation and we'll continue to work with our government partners.

Brian: Our production outlook Embeds, our best understanding of the possible impacts as we comprehend it today.

Brian: We forecast production of approximately 20000 vehicles in 2025.

Brian: With regard to our liquidity position.

Brian: Ended the quarter with total liquidity of approximately $6 $1 billion.

Brian: Due to our cost transformation efforts and cash management, we expect our current liquidity will now give us runway into the second half of critical defects. In addition to the recent upsizing of the JV facility.

Brian: I would also highlight that this does not include future FHA loan.

Speaker Change: Mr grants.

Brian: Moving to Capex.

Brian: Our focus is increasing investments in our future growth initiatives and we expect capital expenditures for 225 to be approximately $1 4 billion.

Brian: Reflecting ample expansion for our completely buildup unit factory.

Brian: At least both in manufacturing and <unk>.

Brian: Certainly there for us in our capital outlay from 2024, and our continued investments in rail infrastructure.

Brian: From a product perspective, we are scheduled for start up production of our high volume mid size platform in late 2026.

Brian: As we close our protocol before and look ahead to particularly five <unk>.

Brian: I couldnt be more excited about the opportunities that lie ahead for our company.

Brian: We've built a strong financial foundation <unk> powerful asset.

Brian: EV technology leader.

Brian: We issued our sell for significant growth in the coming year, we will continue to focus on driving efficiency invest strategically and creating value for our stakeholders.

Brian: We thank you for your continued trust and support with that liquid turning back to get to your questions.

Speaker Change: Ladies and gentlemen, as a reminder to ask a question. Please press star one on your telephone.

Speaker Change: And wait for your name to be announced to withdraw your question. Please press star one again please.

Speaker Change: Please standby, while we compile the Q&A roster.

Linda: Hi, Linda so before we get to the.

Speaker Change: The calls on by phone I would like to take some retail questions from investors on the same technology platform.

Speaker Change: Our first question comes from Patrick <unk>.

Speaker Change: Peter mentioned houses that aims to be 80% Tech company and 20% car company. One is revenue from tech play as expected one categories products do you see making up that 80% of revenue.

Speaker Change: Yes, let me take this.

Patrick: Well thanks for the question Patrick.

Speaker Change: This statement by Peter was taken out of context I want to stress.

Patrick: That doesn't mean, we're deeply.

Patrick: Deep prioritizing our automotive car business.

Patrick: Quite the opposite is perfect.

Patrick: Excited about the growth potential that we have with the particularly with the gravity coming to market.

Patrick: 8% Tech company in 20% to car company basically means that we see ample opportunity to leverage our technology and.

Patrick: And with external customers beyond our core business, but it doesn't mean like one of the articles and a ramp in the headline Josef wants to become a supplier and do cost on the site not planning to do kind of wanted to make this very clear.

Patrick: We are in constant discussions with additional.

Patrick: Partners to what yields.

Patrick: And we are expecting.

Patrick: To close soon but I cannot go into further detail.

Patrick: Types of products and revenues.

Patrick: Right now, it's definitely vehicle technology related but we are exploring other means of monetization and other technologies going forward.

Mark: Thanks, Mark will go into our second question is on policy.

Speaker Change: We mentioned that discussions are ongoing regarding potential tech deal since 2021 with one deal made or the recently mentioned discussion the same with different manufacturers do you see a deal being made before the Atlas Margaret is ready.

Speaker Change: Recently mentioned discussion or not with the same.

Speaker Change: Potential partners have you talked to in 2021 as a matter of fact, the list is getting longer and longer.

Speaker Change: This week, we had additional very large Oems, reaching out to us in order to have discussions.

Speaker Change: As a matter of fact regarding the second question regarding the Alpha motor and does not intend to.

Speaker Change: To have the motor radio are a matter of fact some of the current discussions are about the powertrain and not about the AD loads on future discussions definitely around.

Speaker Change: On the Atlas of Mordor, but we don't have to wait until there are more goods ready.

Speaker Change: Already by now we are established.

Speaker Change: One is the leader so we don't we don't have to sell it for us anymore.

Speaker Change: Thanks, and lastly question is from policy with gravity deliveries being low volume manufacturing ramp up quality mindset constrained are you concerned that you will lose a lot of customers who have preordered due to long wait times similar to what happened with there.

Speaker Change: Well, let's put long wait times into perspective, we opened the owners in November for a few months ago, and we are starting to ramp up our deliveries over the next coming weeks. So it's not really in comparison to what we've seen in a.

Speaker Change: How long the wait time and also let me make a mistake every automotive OEM has a gradual ramp in the beginning when they launch a new product. So it is not is not unknown.

Speaker Change: What we are experiencing here, so and even beyond that.

Speaker Change: There might be some customers that has changed their mind because it doesn't fit.

But our order intake right now is healthy actually very healthy without any marketing and when we said that in.

Speaker Change: On the earnings call and we expect this to become even healthier going forward.

Speaker Change: Great plan that we'd like to now take questions from the phone lines.

Speaker Change: Thank you.

Speaker Change: As a reminder, ladies and gentlemen that start one wants to ask a question and wait for your name to be announced.

Speaker Change: Please standby for your first question.

Speaker Change: Our first question comes from the line of John Murphy with Bank of America Securities. Your line is open.

Speaker Change: Good evening everybody.

Just wanted to go kind of right to the heart of I think what a lot of people are questioning right now.

Speaker Change: I mean, Peter is not on the call. It's a beta on traditional to make a change with it like this without having sort of the founder Youre involved with the transition call I'm just curious why Peter isn't present, and why you would make an announcement like this without.

Speaker Change: Our success or why you wouldnt stick around until a successor weight was chosen I know, it's a tough question, but I mean, it's the one that everybody is thinking right now.

Speaker Change: Yes, I can.

Speaker Change: Can take that obviously.

Speaker Change: Thank you.

Speaker Change: And clearly.

Speaker Change: Announced that Peter made the decision that after 12 years, it's now a good time.

Speaker Change: To pass the baton with communities in that time is extraordinary and he built.

Speaker Change: As a company.

Speaker Change: But he also built a very strong team and we felt that now a good time after bringing <unk>, establishing our technology leadership and gravity to passengers at home.

Speaker Change: And Thats why we are sitting here right now to take the call.

Speaker Change: Okay.

Speaker Change: Then just a second question I Wonder if you could kind of give us an idea of the the gravity order book.

Speaker Change: And how that's developing and I'm not sure you'll be willing to give us the size, but we'd love to hear that but.

Speaker Change: But just kind of the trajectory and how that how that's developing.

Speaker Change: Yes.

Speaker Change: I just mentioned that in the earnings call.

Speaker Change: We opened the August last November and most actually quantities.

Speaker Change: They are really surprised about demand, let's not forget we only opened the orders for the Grand touring trend, which started 94900 <unk>.

Speaker Change: And the vast majority of orders that we get our north upon the 'twenty Holland.

Speaker Change: That limit.

Speaker Change: Actually the number but we see actually very strong.

Speaker Change: Take off for Florida.

Speaker Change: And I want to repeat.

Speaker Change: We haven't done.

Speaker Change: Much marketing I want to actually almost say may have known unknown marketing so far on the gravity, which we are planning to increase drastic of a year over the next couple of weeks <unk> seen some very interesting things coming.

Speaker Change: Is it margin is it fair to state that the gravities that you have within the 20000.

Speaker Change: Guidance.

Speaker Change: Is what you think youre going to sell or is it what you are limited for production.

Speaker Change: Just trying to understand because it sounds like order book is not it's not it's still early days.

Speaker Change: How are you come up with that number and is it in a capacity constrained.

Speaker Change: Yeah, I think Peter said that in previous earnings earnings call said, we're expecting to be capacity constrained in the first couple of quarters.

Speaker Change: And that's the way right now.

Speaker Change: <unk>.

<unk> also considered in the 20000.

Speaker Change: The fact that obviously, there's a lot of uncertainty right now with regulatory changes.

Speaker Change: And the other part that's why we wanted to be a little bit more prudent.

Speaker Change: The numbers.

Speaker Change: But yes, we expect to be in the first couple of quarters supply constraint.

Speaker Change: And then just one last one on the mid size I mean, it sounds like it's getting close to.

Speaker Change: Design freeze almost I'm, just curious when that hits when we get to see it because we'd love to see it just most of your vehicles are vehicles, so far pretty good looking.

Speaker Change: And who was kind of taking the lead on that now appears as.

Speaker Change: I'll step aside if he still involved with that product.

Speaker Change: In the final stages or there or the rest of the team leading the charge.

Peter Buffalo: It's clearly the rest of the teams arena Peter has.

Speaker Change: And then over the day to day.

Speaker Change: Sponsors ability to the team and we have the head of product we have in our powertrain behalf.

Speaker Change: Net of design all of those people that are with the company for many many years. Some north of 10 years will continue the baton to the finish line.

Speaker Change: And when do we get to see the prototypes.

Speaker Change: I think I said that earlier later.

Speaker Change: Later this year beginning next year.

Speaker Change: Okay, great. Thank you very much.

Speaker Change: Thank you.

Speaker Change: Please standby for our next questions.

Speaker Change: Our next question comes from the line of Tom Moran with RBC. Your line is open.

Speaker Change: Hi, Thanks for taking the question Hi, Mark defeat Congrats to go get in your new role.

Speaker Change: I just have follow ups to what.

Speaker Change: John was asking some of those questions.

Speaker Change: The first on on the <unk>.

Speaker Change: <unk> new role just curious as to what that is exactly you mentioned not day to day, but.

Speaker Change: As an adviser what exactly does that mean, it's such a strong presence obviously for all of US I would just love to hear more on that first.

Speaker Change: Well I mean.

Speaker Change: Basically senior technical adviser for the chairman of the board.

Speaker Change: And.

Speaker Change: Strategic technical advisors again, we will not be part of the day to day business, but is there a question devising and the chairman.

It is worthwhile to involve Peter then hemo, it's up to the discretion of the chairman to have that interaction.

Speaker Change: Okay and then the other follow up again.

Speaker Change: Again on gravity I.

Speaker Change: I guess what.

Speaker Change: Understand capacity constrained on the 20000.

Yes.

Speaker Change: Are you guys still seeing that six times total addressable market for gravity versus a sedan or has that been lowered by any chance that youre only doubling the size right now.

Speaker Change: From.

Speaker Change: Basically production year to year, yes, yes.

Speaker Change: And it is more <unk>.

Speaker Change: <unk>.

Speaker Change: Fly constrained than it is demand constraint.

Speaker Change: That's mainly the reason, we're ramping up and want to make sure that we are ramping up with high quality.

Speaker Change: And Thats the main reason.

Speaker Change: We haven't seen the 10.

Speaker Change: For Eric gravity together.

Speaker Change: Okay.

Speaker Change: Anil one on the <unk>.

Speaker Change: IRI credit.

Speaker Change: Could you remind us what portion of your demand came from the the lease portion the IRA that's I think what.

Speaker Change: What folks were thinking May go away, just seeing of what headwind that could be for you guys.

Speaker Change: I think right now it's no secret that good portion or a big portion of.

Speaker Change: On EV sales in North America, our leases.

Speaker Change: It also applies to us.

Speaker Change: But I wanted to point out earlier, I said already that in our production numbers and obviously linked the delivery numbers.

Speaker Change: Yeah.

Speaker Change: We already anticipated regulatory changes and how that potentially impacts our demand.

Speaker Change: One maybe additional information on gravity as I've mentioned.

Speaker Change: We only have one orders for the Grand touring.

Speaker Change: Hum.

Speaker Change: The vast majority of that car right in August configure at prices around $120.

Speaker Change: The price elasticity is not as big as when you talk about 60000 tons of vehicles and $50000 a vehicle.

Speaker Change: It's not that we have not considered anything we actually did.

Speaker Change: But we don't expect it to be.

Speaker Change: Thanks Wayne.

Speaker Change: Okay and last one on the licensing I think you mentioned there is very large Oems reaching out to have discussions.

Speaker Change: I mean.

Speaker Change: Is there any.

Speaker Change: Any more detail on that is that far along or is it just like.

Speaker Change: Very introductory level for.

Speaker Change: For these large Oems.

Speaker Change: Well I mean, it changes actually because yes, we are the ones that I just mentioned and to develop just reached out his introductory but we have others that are much further along.

Speaker Change: So and it's not only for upcoming technologies, even for our technology as I mentioned for the powertrain that we already have.

Speaker Change: So im not commenting on how far we are.

Speaker Change: We hope to surprise everybody.

Speaker Change: Okay. Thank you.

Speaker Change: Thank you.

Speaker Change: Please standby for our next question.

Speaker Change: Our next question comes from the line of Stephens and Garo with Stifel. Your line is open.

Speaker Change: Thanks, Good afternoon everybody.

Speaker Change: Two for me can you give us a sense for what we think about.

Speaker Change: 2025.

Speaker Change: How the mix of gravity mix impacts the progression in gross margins.

Speaker Change: Yeah, absolutely. So if we look at fone.

Speaker Change: Currently five perspective, we cited that for 30 months.

Speaker Change: Expect is significant improvement in gross margin.

Speaker Change: In line with what we see in <unk> compared to <unk>. So we are in the right trajectory.

Speaker Change: During this call we are not creating distinct with integrity.

Speaker Change: But we it's going to significantly improve.

Speaker Change: Okay. Okay.

Speaker Change: And the other question was.

Speaker Change: I mean, it's kind of come up given given the sort of a demand expectations for grabbing how it unfolds.

Speaker Change: Could you ballpark for us either what you think like the <unk> production exit rate could be or how we should think about like a 2026.

Production capability.

Speaker Change: Maybe specific numbers of what you expect.

Speaker Change: Kind of capacity would you have in 'twenty six once <unk> kind of rolling at the end of this year.

Speaker Change: I'm not I'm not prepared to disclose this.

Speaker Change: Variability can add additional shifts for instance, so that's all things that will be going to decide.

Speaker Change: 2025 <unk>.

Speaker Change: How the demand evolves.

Speaker Change: And also when we then later in the year as mentioned.

Speaker Change: Orders for inventory.

Speaker Change: I think that has to wait a few quarters until we can talk about that.

Speaker Change: Okay.

Speaker Change: I appreciate the context. Thank you.

Speaker Change: Thank you.

Speaker Change: Please standby for our next question.

Speaker Change: Our next question comes from the line of Chris <unk> with Needham <unk> Company. Your line is open.

Speaker Change: Oh, Hey, good evening, everyone I, just love to hear why you want to lean into marketing so aggressively right now when you're demand constrained.

Speaker Change: Production constrained would it be that you are trying to market to air.

Speaker Change: The family of cars or is it trying to pre seed there.

Speaker Change: A market for the touring edition I, just kind of want to get a sense of why lean into marketing. So soon.

Speaker Change: No, it's actually not not not really linked to the touring over for the year.

I mean compared to established.

Established Oems still behind with brand awareness and with the gravity coming to market. We are in a very great opportunity to not only introduce a new car, but also introduce the brand.

Speaker Change: To our customers as much and then at a much larger states in scale than we were able before and let's not forget.

Speaker Change: We're working towards.

Speaker Change: The mid size.

Speaker Change: And we're talking about a much bigger a much bigger.

Speaker Change: People that we need to.

Speaker Change: If they need to reach and Thats, what we are paving the way for an important for that is.

Speaker Change: Is that we.

Speaker Change: Continue to build the brands not only market vehicles, but to continue to build the brand in order to really see the see the demand win win midsize comes around.

Speaker Change: Okay, and then not to put you on the spot too much but.

Speaker Change: I guess, if you think about <unk> as sort of the quasi closest comp we see them unable to generate positive gross margins without regulatory credits Pik units like.

Speaker Change: Would you guys do you think you'd be ahead of that pace because of your lower battery input costs like what's the right way to think about longer term.

Speaker Change: <unk>, we can make production estimates, but how should your margins kind of lineup over time, but we think a little further out.

Speaker Change: In terms of advantages and disadvantages versus peers.

Speaker Change: To the extent you can speak to it.

Speaker Change: Yes, so I can take that.

Speaker Change: So first of all on <unk>.

Speaker Change: What's happening.

Speaker Change: But there are few things, which really don't apply to us.

Speaker Change: And we are taking efforts, even though our supply chain to look like that so let me take one by one so one.

Speaker Change: Basically when we look at on the manufacturing side of it which is battery in water.

Speaker Change: On that one the chances of being we believe is less.

Speaker Change: Then we are talking about of the 45 W, which is like sound like $7500 credit.

Mark Winter: Mark already covered.

Mark Winter: And then we're talking about <unk> 10.

Mark Winter: It is related to import from Mexico, or Canada or theme.

Mark Winter: You name it.

Mark Winter: And our production already embedded that in fact, we.

Mark Winter: We have we expect that if all things apply to us today like what is like factor that impact could be in the range of 7% to 5%.

Mark Winter: But we are taking efforts to mitigate and I.

Speaker Change: I believe we are in much better shape compared to other Oems.

Speaker Change: Okay perfect. Thank you.

Mark Winter: Thank you.

Mark Winter: Please standby for our next question.

Speaker Change: Our next question comes from the line of Andrew Shepherd with Cantor Fitzgerald. Your line is open.

Andrew Shepherd: Hi, everyone. Good afternoon, and thanks for taking our questions.

Speaker Change: I think most of our questions have been asked already but maybe.

Speaker Change: Just wanted to touch on Asp's and gross margin once more.

How should we think about blended ASP for 2025, now with the mix, including gravity and I guess on margins you mentioned.

Speaker Change: The prepared remarks, you expect Q1 and Q2 to be relatively similar to Q4.

Speaker Change: What does the path.

Speaker Change: To build on one of the previous question is what does the path to a profit of <unk>.

Speaker Change: Profitable gross margins look like from a timeline perspective. Thank you.

Speaker Change: Yes, and I think I mentioned that in my prepared remarks.

Speaker Change: When we look at the total year 2005.

Speaker Change: We expect.

Speaker Change: The significant improvement.

Speaker Change: In line with what we had in particular before and I believe you can do that math.

Speaker Change: Coming to light.

Speaker Change: WT light you look at that we are guiding basically quantity production last year was 9000 production. So now we have more scale.

Speaker Change: We first of all we are taking significant effort in the company about the cost strong cost transformation and when does it former Canadian cost with significantly decreased and we are consistently working but going to quantify it is a completely different track, we're talking about not multi thousand production.

Speaker Change: <unk> been working cost significantly come down because like fixed cost per week 11 change.

Speaker Change: And this also gives an opportunity to.

Speaker Change: Have.

Speaker Change: <unk>.

Speaker Change: <unk>.

Speaker Change: Deal with our suppliers so altogether.

Speaker Change: We are in the right, particularly.

Speaker Change: We are not guiding what will be the <unk>.

Speaker Change: Hi.

Speaker Change: The range or the percentage <unk> thing is like today is a significant improvement because of a couple of factors that are taking place.

Speaker Change: Got it Okay. That's helpful and I guess as a follow up regarding your partnership with the government of Saudi Arabia to deliver up to 100000 vehicles I think in the past you had mentioned that the majority of this mix will comprise of the gravity and the mid <unk>.

Speaker Change: So just wondering if you could confirm that and B. If you can maybe quantify a bit further how we should think about those deliveries.

Speaker Change: Starting in late 'twenty five and throughout 2026. Thank you.

Speaker Change: That is correct that it's mainly actually the mid size, but also gravity higher and then the year, but we cannot disclose breakdowns.

Speaker Change: Because of our agreement.

Speaker Change: Okay Fair enough I guess, one more if I could squeeze it in.

Speaker Change: Maybe a bit of a macro question.

Speaker Change: With the potential or likely implementation of new tariffs.

Speaker Change: In April.

Speaker Change #100: Curious if you can maybe give us your thought as to how exactly you might be impacted and what can be done to try to mitigate some of that impact. Thank you.

Speaker Change: Yes, I think on that one.

Speaker Change: I mentioned that.

Speaker Change: Impact, including tariffs and 45 45 X.

Speaker Change: Everything combined and if we factor in it could range from south percentage of 12% of the gross margin impact.

Speaker Change: But we are taking mitigating factors localizing, our supply and we are taking all efforts there.

Speaker Change: And that also bring us cost on when we looked like as of late.

Speaker Change: As an example, we just announced another deal on graphite.

Speaker Change: In the United States on a couple of the other ones that we already have and we're taking actions.

Speaker Change #101: Wonderful. Thank you very much I appreciate your time I'll pass it on.

Speaker Change: Thank you.

Speaker Change #102: Please standby for our next question.

Speaker Change #103: Our next question comes from the line of Pat him gentlemen, this with Morgan Stanley. Your line is open.

Speaker Change #104: Thanks, everybody good evening gentlemen.

Speaker Change #104: I had a question on your artificial intelligence strategy.

Speaker Change #104: What is the company's AI strategy.

Speaker Change #104: Specifically with autonomy, obviously you have the partnership.

Speaker Change #104: With Nvidia and dream, guys and the Hyperion software defined platform.

Speaker Change #104: But I don't I'm not.

Speaker Change #104: You commented on whether you've gone to an end.

Speaker Change #104: And Jen AI approach the way Manny.

Speaker Change #104: The industry seems to be moving quite quickly and.

Speaker Change #104: If you are what would that mean in terms of your.

Speaker Change #104: Expenditure and compute needs.

Speaker Change #104: Just have a follow up.

Speaker Change #104: Yes definitely.

Speaker Change #104: Definitely take that so when it comes to our functionality is built on us for a higher level.

Speaker Change #104: And that's driving what I would.

Speaker Change #104: Point out first that we actually made quite some strides already in our current functionality over the last couple of months.

Speaker Change #104: Yes.

Speaker Change #104: Leverage the centers that we already have in our vehicles and we continue to do so we're actually planning to roll out hence reviving later this year and hopefully we can surprise everybody with our.

Speaker Change #104: That actually might be.

Speaker Change #104: Something short term working on when it comes to the <unk>.

Speaker Change #104: <unk>.

Speaker Change #104: Technology.

Speaker Change #104: <unk> is driving that.

Speaker Change #104: Then we need to keep in mind that on the last.

Speaker Change #104: Couple of months ago, maybe a year, the goalposts have shifted and nowadays and technologies that.

Speaker Change #104: Mainly mainly AI based amongst different from what.

Speaker Change #104: And from what we've done since we've seen in the past where other players have invested billions of basically have nothing to show for that is now changing having said that.

Speaker Change #104: We are considering different growth right now where we have.

Speaker Change #104: Extensive discussions with potential partners to partner on this particular topic on also with what I just said with the goalpost shifting we are analyzing whether it would be worthwhile for us to completely intelsat.

Speaker Change #104: But we don't have and haven't made that decision yet right now focusing on the short term.

Speaker Change #104: Implementation in <unk>.

Speaker Change #104: <unk> of the technology that we have in our cards and go.

Speaker Change #104: Revenue, obviously upcoming but then also in India, while we are.

Speaker Change #104: This is another.

Speaker Change #104: Things have changed in the last year, we would have made a decision one year ago. It would have been on the wrong track.

Speaker Change #104: Okay I appreciate that just just as a follow up.

Speaker Change #104: I didn't know if you care to address.

Speaker Change #105: The messaging from your largest shareholder obviously with the agreements in place too.

Speaker Change #105: Lower the stake potentially to as low as 45%.

Speaker Change #105: Billions of dollars at the current share price I know that shelf was kind of previously.

Speaker Change #105: The prospectus previously out there but in identifying.

Speaker Change #105: But your largest shareholder it does raise questions in terms of whether you would be a controlled company.

Speaker Change #105: If they were to fall below 50%.

We're getting some questions about that and we'll just.

Speaker Change #105: Love to hear any messages that you wanted to convey to the extent that you can on that on that position.

Adam Jonas: Yes, I think Adam.

Speaker Change #105: On the ownership percentage.

Speaker Change #106: We believe this was 58, 4% based on the number of shares issued.

Speaker Change #106: Yes.

Speaker Change #106: But those agreements to reduce that.

Speaker Change #106: Right.

Speaker Change #106: Or.

Speaker Change #106: None that I'm aware of.

Speaker Change #106: Okay, we'll follow up.

Speaker Change #106: Appreciate it.

Speaker Change #106: Thank you. Thank you.

Speaker Change #106: Please standby for our next question.

Speaker Change #107: Our next question comes from the line of James Picariello with BNP Paribas. Your line is open.

James Picariello: Hi, everybody.

Just have a question on.

James Picariello: Saudi Arabia shipments in 2024 by my estimation would have totaled something close to 2100, just based on the regions generated revenue of $179 million.

Per your 10-K is that the right ballpark figure in terms of unit volume.

Speaker Change #109: Should we be thinking about Saudi deliveries.

James Picariello: This year given the <unk>.

Speaker Change #109: Important that contribution.

James Picariello: Sure.

James Picariello: First even looking at it.

James Picariello: Overall.

James Picariello: Mike.

James Picariello: So the government Hasnt comeback point of up to like 50000 vehicles with an option for another 50000 vehicles.

James Picariello: And we said previously and the Mod.

James Picariello: Go towards like the midsized <unk> air.

James Picariello: Now we are going from 9000 production to 20 <unk> production.

James Picariello: We expect like in 2025.

James Picariello: The proportion of Saudi Arabia come down and more go towards.

James Picariello: Towards the North America.

James Picariello: Okay.

James Picariello: Okay and then just.

James Picariello: Two.

James Picariello: Two a quick two part one.

James Picariello: The 20000 units production guidance for.

James Picariello: For this year.

James Picariello: Given that gravity production is going to be capacity constrained you can't give us the.

James Picariello: Estimation on what the gravity volumes.

James Picariello: Our within that that production figure.

James Picariello: And then as we think about the mid sized crossover starting in late 'twenty six.

Speaker Change #110: All production solely take place in Saudi Arabia, and in your App to plan for that crossover or when or will it get produced in Arizona as well.

James Picariello: Well it just strictly be dependent on on imports into the U S.

Speaker Change #110: No.

Speaker Change #110: We're not disclosing that.

Speaker Change #111: Mix, but I mean, it's clear obviously, the beginning of the year.

Speaker Change #111: The gravities as while we while we are ramping up and then the big simple change.

Speaker Change #111: Over over the year, given the fact that the gravity hasn't is the how.

Speaker Change #111: 10 men.

Speaker Change #111: Sure.

Speaker Change #111: And when it comes to mid size.

Speaker Change #111: We have one but we also are trading.

Two in Saudi Arabia.

Speaker Change #111: Trading and one right now to produce vehicles to be locally.

Speaker Change #111: In North America.

Okay. So both plants will produce the crossover.

Speaker Change #111: Correct.

Speaker Change #111: Thank you.

Speaker Change #111: Thank you.

Speaker Change #112: Ladies and gentlemen at this time I would now like to turn the call back over to <unk> for closing remarks.

Speaker Change #112: So this concludes <unk> fourth quarter and full year 2024 earnings conference call. Thanks, everyone for joining us today and you may now disconnect.

Speaker Change #112: Ladies and gentlemen that concludes today's conference call. Thank you for your participation you may now disconnect.