WEBVTT - Peter Rawlinson Talks Lucid Revenue Expectations

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<v Speaker 1>We'll take a pit stop to check in on Lucid.

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<v Speaker 2>The stock off to the races after announcing a one

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<v Speaker 2>and a half billion dollar investment from Saudi Arabia's Public

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<v Speaker 2>Investment Fund. The investment comes as the ev maker beat

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<v Speaker 2>second quarter expectations on revenue and vehicles delivered.

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<v Speaker 1>Joining us now as Peter Rollinson.

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<v Speaker 2>He is the CEO as well as the CTO of Lucid. Peter,

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<v Speaker 2>great to have you on the program. Let me add

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<v Speaker 2>us first about this cash injection. I think the biggest

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<v Speaker 2>question investors have is, you know, do you have the

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<v Speaker 2>money to get through this difficult period and to profitability

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<v Speaker 2>kind of on the other side. How far away is

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<v Speaker 2>that profitability on the other side, what's the plan look like?

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<v Speaker 3>Well, Matt, you're referencing the one point finally billion dollars

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<v Speaker 3>that we received from the Public Investment Fund yesterday, which

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<v Speaker 3>we announced, and this will secure our financial runway well

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<v Speaker 3>through the Q full of twenty twenty five. And this

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<v Speaker 3>is significant for a number of reasons. First of all,

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<v Speaker 3>it is the resounding endorsement and the public investment funds

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<v Speaker 3>faith in Lucid. I'd like to think they see us

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<v Speaker 3>as the true technology leaders in this space, and that's

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<v Speaker 3>a cornerstone of the relationship. And also we are key

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<v Speaker 3>to them realizing their vision twenty thirty.

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<v Speaker 4>But also this funding.

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<v Speaker 3>Sees us through not just the launch of our Lucid Gravity,

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<v Speaker 3>but through the crucial remp up period which sees us

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<v Speaker 3>right through twenty twenty five.

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<v Speaker 4>It makes a huge difference to us.

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<v Speaker 2>So we always talk about the forty thousand dollars or

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<v Speaker 2>so that Rivian loses on the sale of every one

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<v Speaker 2>of its vehicles. I don't know how much you lose

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<v Speaker 2>on the sale of each lucid Air, but it's got

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<v Speaker 2>to be a lot more because your burn rate is

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<v Speaker 2>about the same and you sell far fewer vehicles. When

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<v Speaker 2>will you start making money on the products that you sell?

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<v Speaker 2>On the lucid Air that we're looking at in video

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<v Speaker 2>right now, it's beautiful review Viewers absolutely love the vehicle,

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<v Speaker 2>they love your technology, but it's very costly.

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<v Speaker 1>The Gravity, I'm sure will be the same story.

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<v Speaker 2>When are you going to start making money on each

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<v Speaker 2>of these vehicles that you sell?

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<v Speaker 3>So there's a misleading narrative here mat that all those

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<v Speaker 3>costs are the costs of creating the car or the

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<v Speaker 3>cost of our technology, and that's simply not true. So

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<v Speaker 3>much of our finances are due to a long term investment.

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<v Speaker 3>We've just completed or very nearly completed, a three million

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<v Speaker 3>dollar buildout of our state of the art factory in Arizona.

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<v Speaker 3>We've brought it in logistics, we've brought it in even

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<v Speaker 3>stamping into a vertically integrated operation, and we've really expanded

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<v Speaker 3>and brought under one roof the world's most advanced powertrain

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<v Speaker 3>manufacturing capability.

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<v Speaker 4>No one has a facility quite like this.

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<v Speaker 3>And also then we're building out a factory in Saudi

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<v Speaker 3>Arabia which we'll have a capacity for one hundred and

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<v Speaker 3>fifty thousand units per annum. On top of that, we

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<v Speaker 3>have the investment of bringing what I believe will be

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<v Speaker 3>the world's best SUV, the Lucid Gravity, to freition, schedule

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<v Speaker 3>for starter production later this year. And then we're also

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<v Speaker 3>building out ourselves in service network and investing in our

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<v Speaker 3>mid sized platform, which is going to be a lendmark

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<v Speaker 3>product for US as schedule for start of production late

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<v Speaker 3>twenty six. So with all those investments for the long term,

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<v Speaker 3>that's what's dominating our finance. And this is falsely read

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<v Speaker 3>as it's costing too much. We've got the best technology

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<v Speaker 3>in the world and it is cost effective technology.

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<v Speaker 4>We can manufacture this, make no.

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<v Speaker 1>Mistake, Peter.

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<v Speaker 5>Another question I have for you here is going back

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<v Speaker 5>to what that was initially asking. On one hand, here

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<v Speaker 5>your investments can obviously be seen at scale that you

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<v Speaker 5>have this one point five billion dollar infusion. It's a

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<v Speaker 5>significant amount of money. You said it all last year

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<v Speaker 5>through the end of next year to really make a

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<v Speaker 5>lot of progress here. But how important is profitability to you?

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<v Speaker 5>When is free cash flow going to be at more

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<v Speaker 5>of a sustainable pace?

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<v Speaker 3>Totally a profitability is the end game for US away

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<v Speaker 3>and it's all about scale. We haven't guided precisely when,

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<v Speaker 3>but it is all about scale, and we have four

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<v Speaker 3>steps to get to true scale. One is to grow

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<v Speaker 3>brand awareness so we sell more Lucid airs and we

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<v Speaker 3>just come off two record quarters of deliveries. Q one

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<v Speaker 3>was a record for US, Q two was a record

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<v Speaker 3>and with that seventy percent up on our Q two

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<v Speaker 3>of twenty twenty three, we're out selling our core German

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<v Speaker 3>competitors in the US very significantly, and this is not

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<v Speaker 3>really fully appreciated. Then we've got our gravity or Lucid

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<v Speaker 3>Gravity coming late this year that will have a total

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<v Speaker 3>addressable market of six times a sedan. Then we have

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<v Speaker 3>our midsized platform, potentially a total addressable market thirty times.

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<v Speaker 3>And on top of that, the icing on the cake

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<v Speaker 3>is if we can get some more licensing or supply

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<v Speaker 3>deals with another automaker for our world leading technology.

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<v Speaker 4>It is all about.

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<v Speaker 5>Scale, you know, speaking of gravity as well. You mentioned

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<v Speaker 5>later this year, but what do you think early demand

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<v Speaker 5>will look like and what exactly are you planning on

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<v Speaker 5>opening up those reservations.

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<v Speaker 3>I can't wait because the response I'm elicitating is that

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<v Speaker 3>people just want to buy this thing. When people first

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<v Speaker 3>saw the air, they thought it was an amazing technological product.

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<v Speaker 3>But when they see Gravity, they say, when can I

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<v Speaker 3>buy it?

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<v Speaker 4>And that's the difference.

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<v Speaker 3>This is the product that all America is waiting for,

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<v Speaker 3>is yearning for. I think the market's going to be huge,

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<v Speaker 3>and there's nothing quite like it. It's got the driving

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<v Speaker 3>dynamics or blow off of a Lamborghini Urus, it's got

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<v Speaker 3>the poison stature of a range Rover, and it's got

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<v Speaker 3>more leg room than even an Escalade, and it's a

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<v Speaker 3>really compact car usable in metropolis on the outside, so

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<v Speaker 3>there's never been.

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<v Speaker 4>Anything quite like this.

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<v Speaker 1>Now.

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<v Speaker 3>Regarding when we first start taking orders, we will do

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<v Speaker 3>so it's sometime between now.

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<v Speaker 4>And startup production. Watch this space.

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<v Speaker 3>I don't want to go too early with this because

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<v Speaker 3>I think some car companies have gone too early and

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<v Speaker 3>they've done a disservice to their customers. We want to

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<v Speaker 3>see a line of sight to deliveries from that point

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<v Speaker 3>in time where we take the first free.

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<v Speaker 4>Orders, but that's going to happen. Watch this space.

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<v Speaker 1>Are you concerned about demand?

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<v Speaker 2>I mean, obviously at the very top and.

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<v Speaker 1>People are wealthy.

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<v Speaker 2>People are willing to dip their toe in the EV

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<v Speaker 2>market and buy a luxury product. But if you look

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<v Speaker 2>at a lower price vehicle, which is i'm sure in

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<v Speaker 2>your future, the infrastructure just isn't there and the demand

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<v Speaker 2>doesn't seem to be there.

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<v Speaker 1>How do you work on that.

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<v Speaker 4>Well, I think we're going through a blip right now.

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<v Speaker 3>I think that demand is a function of people's experience

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<v Speaker 3>with evs, and there's been a lot of par evs.

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<v Speaker 3>People are experiencing the lucid air and more and more

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<v Speaker 3>people are becoming aware of how awesome it is. Our

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<v Speaker 3>sales are up seventy percent. We're not seeing a dip

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<v Speaker 3>in demand, and we're not seeing problems manufacturing. We can

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<v Speaker 3>make them. It's all to do with the market.

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<v Speaker 4>So when we go to a more affordable car, I

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<v Speaker 4>think there's a huge lightened demand there.

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<v Speaker 3>And also when we talk about infrastructure, a lot of

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<v Speaker 3>that is the draw on the grid, because we've got

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<v Speaker 3>the most advanced technology in the world. We just announced

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<v Speaker 3>a landmark, a record breaking five miles per kilo water Air,

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<v Speaker 3>the most energy efficient car in the world. The lucid

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<v Speaker 3>Air behind me. Lucid Air Pure can do five miles

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<v Speaker 3>per killer. What app That means there's less draw on

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<v Speaker 3>the grid, less need for electricity. This is the advancement

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<v Speaker 3>that we can make.

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<v Speaker 5>You know, we are very close to a presidential all

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<v Speaker 5>action here in the United States, and of course the

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<v Speaker 5>Trump ticket has been somewhat critical of some of the

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<v Speaker 5>changes being made in the United States when it comes

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<v Speaker 5>to a vehicles and the infrastructure around it. Do you

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<v Speaker 5>think that any potential change in administration could mean a

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<v Speaker 5>difference for your business.

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<v Speaker 3>Well, look, I'm politically agnostic here, but I've got relentless

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<v Speaker 3>faith that common sense will prevail and the market will

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<v Speaker 3>prevail market forces. More and more people are realizing that

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<v Speaker 3>a carlike ours is an inherently superior experience to a

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<v Speaker 3>gasoline counterpart.

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<v Speaker 4>Whether you.

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<v Speaker 3>Invest in a car like this for its environmental credentials,

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<v Speaker 3>which are profound, or for the driving pleasure, it's.

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<v Speaker 4>A superior experience.

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<v Speaker 3>So unlike someone else, I'm not being distracted by politics.

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<v Speaker 3>I'm relentlessly driving to create the best product for the customer.

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<v Speaker 5>Peter Alison, Lucid, we thank you very much, of course,

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<v Speaker 5>on the heels of earnings and a one point five

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<v Speaker 5>billion dollar check here from a division of the Saudi

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<v Speaker 5>Arabian Public Investment Fund