Speaker 1: We'll take a pit stop to check in on Lucid.
Speaker 2: The stock off to the races after announcing a one
Speaker 2: and a half billion dollar investment from Saudi Arabia's Public
Speaker 2: Investment Fund. The investment comes as the ev maker beat
Speaker 2: second quarter expectations on revenue and vehicles delivered.
Speaker 1: Joining us now as Peter Rollinson.
Speaker 2: He is the CEO as well as the CTO of Lucid. Peter,
Speaker 2: great to have you on the program. Let me add
Speaker 2: us first about this cash injection. I think the biggest
Speaker 2: question investors have is, you know, do you have the
Speaker 2: money to get through this difficult period and to profitability
Speaker 2: kind of on the other side. How far away is
Speaker 2: that profitability on the other side, what's the plan look like?
Speaker 3: Well, Matt, you're referencing the one point finally billion dollars
Speaker 3: that we received from the Public Investment Fund yesterday, which
Speaker 3: we announced, and this will secure our financial runway well
Speaker 3: through the Q full of twenty twenty five. And this
Speaker 3: is significant for a number of reasons. First of all,
Speaker 3: it is the resounding endorsement and the public investment funds
Speaker 3: faith in Lucid. I'd like to think they see us
Speaker 3: as the true technology leaders in this space, and that's
Speaker 3: a cornerstone of the relationship. And also we are key
Speaker 3: to them realizing their vision twenty thirty.
Speaker 4: But also this funding.
Speaker 3: Sees us through not just the launch of our Lucid Gravity,
Speaker 3: but through the crucial remp up period which sees us
Speaker 3: right through twenty twenty five.
Speaker 4: It makes a huge difference to us.
Speaker 2: So we always talk about the forty thousand dollars or
Speaker 2: so that Rivian loses on the sale of every one
Speaker 2: of its vehicles. I don't know how much you lose
Speaker 2: on the sale of each lucid Air, but it's got
Speaker 2: to be a lot more because your burn rate is
Speaker 2: about the same and you sell far fewer vehicles. When
Speaker 2: will you start making money on the products that you sell?
Speaker 2: On the lucid Air that we're looking at in video
Speaker 2: right now, it's beautiful review Viewers absolutely love the vehicle,
Speaker 2: they love your technology, but it's very costly.
Speaker 1: The Gravity, I'm sure will be the same story.
Speaker 2: When are you going to start making money on each
Speaker 2: of these vehicles that you sell?
Speaker 3: So there's a misleading narrative here mat that all those
Speaker 3: costs are the costs of creating the car or the
Speaker 3: cost of our technology, and that's simply not true. So
Speaker 3: much of our finances are due to a long term investment.
Speaker 3: We've just completed or very nearly completed, a three million
Speaker 3: dollar buildout of our state of the art factory in Arizona.
Speaker 3: We've brought it in logistics, we've brought it in even
Speaker 3: stamping into a vertically integrated operation, and we've really expanded
Speaker 3: and brought under one roof the world's most advanced powertrain
Speaker 3: manufacturing capability.
Speaker 4: No one has a facility quite like this.
Speaker 3: And also then we're building out a factory in Saudi
Speaker 3: Arabia which we'll have a capacity for one hundred and
Speaker 3: fifty thousand units per annum. On top of that, we
Speaker 3: have the investment of bringing what I believe will be
Speaker 3: the world's best SUV, the Lucid Gravity, to freition, schedule
Speaker 3: for starter production later this year. And then we're also
Speaker 3: building out ourselves in service network and investing in our
Speaker 3: mid sized platform, which is going to be a lendmark
Speaker 3: product for US as schedule for start of production late
Speaker 3: twenty six. So with all those investments for the long term,
Speaker 3: that's what's dominating our finance. And this is falsely read
Speaker 3: as it's costing too much. We've got the best technology
Speaker 3: in the world and it is cost effective technology.
Speaker 4: We can manufacture this, make no.
Speaker 1: Mistake, Peter.
Speaker 5: Another question I have for you here is going back
Speaker 5: to what that was initially asking. On one hand, here
Speaker 5: your investments can obviously be seen at scale that you
Speaker 5: have this one point five billion dollar infusion. It's a
Speaker 5: significant amount of money. You said it all last year
Speaker 5: through the end of next year to really make a
Speaker 5: lot of progress here. But how important is profitability to you?
Speaker 5: When is free cash flow going to be at more
Speaker 5: of a sustainable pace?
Speaker 3: Totally a profitability is the end game for US away
Speaker 3: and it's all about scale. We haven't guided precisely when,
Speaker 3: but it is all about scale, and we have four
Speaker 3: steps to get to true scale. One is to grow
Speaker 3: brand awareness so we sell more Lucid airs and we
Speaker 3: just come off two record quarters of deliveries. Q one
Speaker 3: was a record for US, Q two was a record
Speaker 3: and with that seventy percent up on our Q two
Speaker 3: of twenty twenty three, we're out selling our core German
Speaker 3: competitors in the US very significantly, and this is not
Speaker 3: really fully appreciated. Then we've got our gravity or Lucid
Speaker 3: Gravity coming late this year that will have a total
Speaker 3: addressable market of six times a sedan. Then we have
Speaker 3: our midsized platform, potentially a total addressable market thirty times.
Speaker 3: And on top of that, the icing on the cake
Speaker 3: is if we can get some more licensing or supply
Speaker 3: deals with another automaker for our world leading technology.
Speaker 4: It is all about.
Speaker 5: Scale, you know, speaking of gravity as well. You mentioned
Speaker 5: later this year, but what do you think early demand
Speaker 5: will look like and what exactly are you planning on
Speaker 5: opening up those reservations.
Speaker 3: I can't wait because the response I'm elicitating is that
Speaker 3: people just want to buy this thing. When people first
Speaker 3: saw the air, they thought it was an amazing technological product.
Speaker 3: But when they see Gravity, they say, when can I
Speaker 3: buy it?
Speaker 4: And that's the difference.
Speaker 3: This is the product that all America is waiting for,
Speaker 3: is yearning for. I think the market's going to be huge,
Speaker 3: and there's nothing quite like it. It's got the driving
Speaker 3: dynamics or blow off of a Lamborghini Urus, it's got
Speaker 3: the poison stature of a range Rover, and it's got
Speaker 3: more leg room than even an Escalade, and it's a
Speaker 3: really compact car usable in metropolis on the outside, so
Speaker 3: there's never been.
Speaker 4: Anything quite like this.
Speaker 1: Now.
Speaker 3: Regarding when we first start taking orders, we will do
Speaker 3: so it's sometime between now.
Speaker 4: And startup production. Watch this space.
Speaker 3: I don't want to go too early with this because
Speaker 3: I think some car companies have gone too early and
Speaker 3: they've done a disservice to their customers. We want to
Speaker 3: see a line of sight to deliveries from that point
Speaker 3: in time where we take the first free.
Speaker 4: Orders, but that's going to happen. Watch this space.
Speaker 1: Are you concerned about demand?
Speaker 2: I mean, obviously at the very top and.
Speaker 1: People are wealthy.
Speaker 2: People are willing to dip their toe in the EV
Speaker 2: market and buy a luxury product. But if you look
Speaker 2: at a lower price vehicle, which is i'm sure in
Speaker 2: your future, the infrastructure just isn't there and the demand
Speaker 2: doesn't seem to be there.
Speaker 1: How do you work on that.
Speaker 4: Well, I think we're going through a blip right now.
Speaker 3: I think that demand is a function of people's experience
Speaker 3: with evs, and there's been a lot of par evs.
Speaker 3: People are experiencing the lucid air and more and more
Speaker 3: people are becoming aware of how awesome it is. Our
Speaker 3: sales are up seventy percent. We're not seeing a dip
Speaker 3: in demand, and we're not seeing problems manufacturing. We can
Speaker 3: make them. It's all to do with the market.
Speaker 4: So when we go to a more affordable car, I
Speaker 4: think there's a huge lightened demand there.
Speaker 3: And also when we talk about infrastructure, a lot of
Speaker 3: that is the draw on the grid, because we've got
Speaker 3: the most advanced technology in the world. We just announced
Speaker 3: a landmark, a record breaking five miles per kilo water Air,
Speaker 3: the most energy efficient car in the world. The lucid
Speaker 3: Air behind me. Lucid Air Pure can do five miles
Speaker 3: per killer. What app That means there's less draw on
Speaker 3: the grid, less need for electricity. This is the advancement
Speaker 3: that we can make.
Speaker 5: You know, we are very close to a presidential all
Speaker 5: action here in the United States, and of course the
Speaker 5: Trump ticket has been somewhat critical of some of the
Speaker 5: changes being made in the United States when it comes
Speaker 5: to a vehicles and the infrastructure around it. Do you
Speaker 5: think that any potential change in administration could mean a
Speaker 5: difference for your business.
Speaker 3: Well, look, I'm politically agnostic here, but I've got relentless
Speaker 3: faith that common sense will prevail and the market will
Speaker 3: prevail market forces. More and more people are realizing that
Speaker 3: a carlike ours is an inherently superior experience to a
Speaker 3: gasoline counterpart.
Speaker 4: Whether you.
Speaker 3: Invest in a car like this for its environmental credentials,
Speaker 3: which are profound, or for the driving pleasure, it's.
Speaker 4: A superior experience.
Speaker 3: So unlike someone else, I'm not being distracted by politics.
Speaker 3: I'm relentlessly driving to create the best product for the customer.
Speaker 5: Peter Alison, Lucid, we thank you very much, of course,
Speaker 5: on the heels of earnings and a one point five
Speaker 5: billion dollar check here from a division of the Saudi
Speaker 5: Arabian Public Investment Fund