Lucid Group, Inc. Q4 FY2024 earnings call

• Marc Winterhoff took over as Interim CEO, highlighting Lucid's achievements in 2024 like record deliveries, Lucid Air being top EV in back half of 2024, and launch of Lucid Gravity. - Taoufiq Boussaid joined as CFO, focusing on scaling production, operational efficiency, and financial discipline. - Lucid Gravity orders exceeded expectations, with over three quarters of orders from new customers. - Launched brand promise 'Compromise Nothing' with positive response. - Plans for aggressive marketing ramp-up in 2025, including Lucid Gravity event in NYC. - Focus on strategic priorities: driving customer deliveries, advancing technology leadership, bringing midsize vehicles to market by late 2026, and expanding technology license business.

In 2024, Lucid produced 9,029 vehicles with deliveries of 10,241, a record year. Revenue for the fourth quarter was $234.5 million. GAAP gross margin in 2024 was negative 114%, a significant improvement from negative 225% in 2023. In the fourth quarter, GAAP gross margin was negative 89%, including a favorable impact from a net supply recovery. For 2025, Lucid expects to produce approximately 20,000 vehicles, with continued growth in 2026 as it gets a full year of Lucid Gravity production.

• Expect to produce approximately 20,000 vehicles in 2025 with continued growth in 2026. - Gross margin expected to improve in 2025, with first half near Q4 2024 levels excluding one-time benefits, then significantly improving in second half. - Capital expenditures expected to be ~$1.4 billion in 2025, focusing on AMP-2 expansion, Atlas Powertrain manufacturing, and retail infrastructure. - Scheduled start of production for high-volume mid-size platform in late 2026.

• Potential impacts from regulatory changes, including EV incentives and tariffs, which could affect demand. - Supply chain uncertainties that may impact production and cost. - Intense competition in the EV market affecting market share and pricing.

Q: Peter mentioned how Lucid aims to be 80% tech company and 20% car company. When is revenue from tech plays expected?

A: Marc Winterhoff said it's about leveraging technology with external customers, but specific details on timing and products not disclosed.

Q: It's been mentioned that discussions are ongoing regarding potential tech deals since 2021 with one deal made. Are the recently mentioned discussions the same or with different manufacturers?

A: Marc Winterhoff said recently mentioned discussions are with different partners than in 2021, with more large OEMs reaching out.

Q: With Gravity deliveries being low while manufacturing ramp-up and quality mindset constraint, are you concerned about losing customers?

A: Marc Winterhoff said order intake is healthy, and gradual ramp is normal for new product launch, not expecting significant customer loss.

Q: Just wanted to go kind of right to the heart of, I think, what a lot of people are questioning right now. I mean, Peter's not on the call. It's a bit untraditional to make a change 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.

A: Marc Winterhoff said Peter decided it's a good time to pass the baton after building the company and team.

Q: I wonder if you could kind of give us an idea of the Gravity order book and how that's developing.

A: Marc Winterhoff said Gravity orders for Grand Touring opened in November 2024, with vast majority configured above $120,000 and strong demand despite limited marketing.

Q: Can you give us a sense when we think about 2025, how the mix, the gravity mix impacts the progression in gross margins?

A: Gagan Dhingra said significant improvement in gross margin expected in 2025 due to scale, mix, and cost reductions.

Q: I'd just love to hear why you want to lean into marketing so aggressively right now when your production constraints.

A: Marc Winterhoff said it's to build brand awareness for future midsize vehicles and expand market reach.

Q: 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?

A: Gagan Dhingra said significant improvement in gross margin expected in 2025 due to scale and cost transformation efforts.

Q: I just have a question on Saudi Arabia shipments in 2024. By my estimation, it would have totaled something close to 2,100 just based on the region's generated revenue of $179 million per your 10-K. Is that the right ballpark figure in terms of unit volume?

A: Gagan Dhingra said overall, Saudi government has a commitment of up to 50,000 vehicles, with production proportion to shift towards North America in 2025.

Q: I had a question on your artificial intelligence strategy. What is the company's AI strategy, specifically with autonomy?

A: Marc Winterhoff said focusing on short-term implementation and improvement of existing technology, analyzing different routes for autonomous driving with potential partners, and noting goalposts have shifted in the field.