Lucid Group Inc Q4 2024 Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: John Murphy - BofA Securities, Inc. - Analyst : Good evening, everybody. Just wanted to go right to the heart of I think what a lot of people are questioning, right now. Peter's not on the call. It's a bit untraditional to make a change with it, like this, without having the founder involved with the transition call. I'm just curious why Peter isn't present and why he would make an announcement, like this, without a successor? Why he wouldn't stick around until a successor was chosen? I know it's a tough question but it's the one that everybody's thinking, right now.

Question: John Murphy - BofA Securities, Inc. - Analyst : Okay. Then, just a second question. I wonder if you could give us an idea of the Gravity order book and how that's developing. I'm not sure you'd be willing to give us the size but we'd love to hear that. Just the trajectory and how that's developing.

Question: John Murphy - BofA Securities, Inc. - Analyst : So Marc, is it fair to state that the Gravity that you have, within the 20,000 guidance, is what you think you're going to sell? Or is it what you're limited for production? Just trying to understand because it sounds like the order book is still early days. How are you coming up with that number and is it capacity-constrained?

Question: John Murphy - BofA Securities, Inc. - Analyst : And, then, just one last one, on the Midsize. It sounds like it's getting close to design freeze, almost. I'm just curious when that hits. When we get to see it cause we'd love to see it, cause most of your vehicles, so far, pretty good looking. And who is taking the lead on that, now that Peter is stepped aside Is he still involved with that product, in the final stages? Or the rest of the team, leading the charge? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. FEBRUARY 25, 2025 / 10:30PM, LCID.OQ - Q4 2024 Lucid Group Inc Earnings Call

Question: John Murphy - BofA Securities, Inc. - Analyst : And when do we get to see it, the prototypes?

Question: John Murphy - BofA Securities, Inc. - Analyst : Okay. Great. Thank you very much.

Question: Tom Narayan - Royal Bank of Canada - Analyst : Hi. Thanks for taking the question. Hi, Marc, Taoufiq. And congrats to Gagan, on your new role. I just have follow-ups to what John was asking, some of these questions. The first, on Peter's new role. Just curious as to what that is, exactly? You mentioned not day -to-day. But, as an advisor, what, exactly, does that mean? He was such a strong presence, obviously, for all of us. I'd just love to hear more on that, first.

Question: Tom Narayan - Royal Bank of Canada - Analyst : Okay. And, then, the other follow-up, again, on Gravity. I understand capacity constraint on the 20,000, are you, guys, still seeing that 6 times total addressable market, for Gravity versus the sedans? Or has that been lowered, by any chance? Because you're only doubling the size from, basically, production year to year.

Question: Tom Narayan - Royal Bank of Canada - Analyst : Okay. My final one, on the IRA credit. Could you remind us what portion of your demand came from the lease portion, the IRA -- that's, I think, what folks are thinking may go away. Just seeing of what headwind that could be for you, guys.

Question: Tom Narayan - Royal Bank of Canada - Analyst : Okay. Last one, on the licensing. I think you mentioned there's very large OEMs reaching out to have discussions. Is there any more detail on that? Are they far along or is it just like very introductory level for these large OEMs? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. FEBRUARY 25, 2025 / 10:30PM, LCID.OQ - Q4 2024 Lucid Group Inc Earnings Call

Question: Tom Narayan - Royal Bank of Canada - Analyst : Okay. Thank you.

Question: Stephen Gengaro - Stifel Financial Corp. - Analyst : Thanks. Good afternoon, everybody. I think, too, for me, can you give us a sense, when we think about 2025, how the Gravity mix impacts the progression in gross margins?

Question: Stephen Gengaro - Stifel Financial Corp. - Analyst : Okay. Thanks. And the other question was, it's come up but given a demand expectations for Gravity and how it unfolds, could you ballpark, for us, either what you think, like, the 4Q production exit rate could be? Or how we should think about, like, a 2026 production capability, without giving any specific numbers for what you expect? But what kind of capacity would you have in '26, once Gravity is rolling, at the end of this year?

Question: Stephen Gengaro - Stifel Financial Corp. - Analyst : Okay. I appreciate the context.

Question: Chris Pierce - Needham & Company, LLC - Analyst : Hey. Good evening, everyone. I just love to hear why you want to lean into marketing so aggressively, right now, when you're production-constrained? Would it be that you're trying to market the Air as the family of cars? Or is it trying to precede the market for the touring edition? I just want to get a sense of why lean into marketing, so soon.

Question: Chris Pierce - Needham & Company, LLC - Analyst : Okay. And, then, not to put you on the spot too much, but if you think about Rivian as the quasi closest comp, we see them unable to generate positive gross margins, without regulatory credits of 50,000 units. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. FEBRUARY 25, 2025 / 10:30PM, LCID.OQ - Q4 2024 Lucid Group Inc Earnings Call Do you think you'd be ahead of that pace because of your lower battery input costs? Or, like, what's the right way to think about longer-term production? We can make productionist estimates. But, like, how should your margins line up, over time, when we think a little further out, just in terms of advantages and disadvantages versus peers? To the extent you can speak to it.

Question: Chris Pierce - Needham & Company, LLC - Analyst : Okay perfect thank you.

Question: Andres Sheppard - Cantor Fitzgerald & Co., Inc. - Analyst : Hi, everyone. Good afternoon. And thanks for taking our questions. I think most of our questions have been asked, already. But, maybe, I just wanted to touch on ASPs and gross margin, once more. How should we think about blended ASPs for 2025, now, with the mix including Gravity? And, on margins you mentioned in your prepared remarks, you expect Q1 and Q2 to be relatively similar to Q4. What does the path to -- just to build on one of the previous questions -- to profitable gross margins look like, from a timeline perspective? Thank you. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. FEBRUARY 25, 2025 / 10:30PM, LCID.OQ - Q4 2024 Lucid Group Inc Earnings Call

Question: Andres Sheppard - Cantor Fitzgerald & Co., Inc. - Analyst : Got it. Okay. That's helpful. And, as a follow up, regarding your partnership with the government of Saudi Arabia to deliver up to 100,000 vehicles, I think, in the past, you had mentioned that, I think, majority of this mix will comprise of the Gravity and the Midsize. So just wondering if you can a., confirm that and b., if you can, maybe, quantify, a bit further, how we should think about those deliveries, starting in late '25 and throughout 2026? Thank you.

Question: Andres Sheppard - Cantor Fitzgerald & Co., Inc. - Analyst : Okay. Fair enough. One more, if I could squeeze it in. Just, maybe, a bit of a macro question. With the potential or likely implementation of new tariffs in April, just 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.

Question: Andres Sheppard - Cantor Fitzgerald & Co., Inc. - Analyst : Wonderful. Thank you very much. I appreciate your time. I'll pass it on.

Question: Adam Jonas - Morgan Stanley & Co LLC - Analyst : Thanks, everybody. Good evening, gentlemen. I had a question on your artificial intelligence strategy. What is the company's AI strategy, specifically with autonomy. Obviously, you have the partnership with Nvidia, in DreamDrive and the Hyperion software-defined platform. But I'm not sure you've commented on whether you've gone to an end-to-end GenAI approach, the way many -- where the industry seems to be moving, quite quickly. And, if you are, what would that mean, in terms of your expenditure and compute needs? And I have just a follow-up. Thanks.

Question: Adam Jonas - Morgan Stanley & Co LLC - Analyst : Okay. I appreciate that. Just as a follow-up, I didn't know if you care to address the messaging from your largest shareholder. Obviously, with the agreements in place to lower the stakes, potentially, to as low as 45% -- billions of dollars at the current share price. I know that shelf was -- the prospectus was previously out there. But in identifying that with your largest shareholder, it does raise questions, in terms of whether you would be a controlled company, if they were to fall below 50%? And we're getting some questions about that and we'll just love to hear any messages that you wanted to convey, to the extent that you can, on that position. Thanks.

Question: Adam Jonas - Morgan Stanley & Co LLC - Analyst : Right. But there's agreements to reduce that, right?

Question: Adam Jonas - Morgan Stanley & Co LLC - Analyst : Okay. We'll follow up. Appreciate it.

Question: James Picariello - Exane BNP Paribas - Analyst : Hi, everybody. I just have a question on Saudi Arabia shipments. In 2024, by my estimation, would have to totaled something close to 2,100, just based on the region's generated revenue of $179 million, for your 10,000. 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?

Question: James Picariello - Exane BNP Paribas - Analyst : Okay. And, then, just to a quick two-part one. The 20,000 units of 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 are, within that production figure? And, then, as we think about the Midsize crossover, starting in late '26, will production solely take place in Saudi Arabia, in your AMP-2 plant, for that crossover? Or will it get produced in Arizona as well? Or will it just strictly be dependent on imports, into the US?

Question: James Picariello - Exane BNP Paribas - Analyst : Okay. So both plants will produce the crossover?

Question: James Picariello - Exane BNP Paribas - Analyst : Thank you. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. FEBRUARY 25, 2025 / 10:30PM, LCID.OQ - Q4 2024 Lucid Group Inc Earnings Call