Ladies and gentlemen, thank you for standing by and welcome to the Lucid Third Quarter 2021 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speakers presentation, there will be a question-and-answer session. Please be advised that today's conference is being recorded. I will now like to turn the conference over to your speaker for today, Lauren Sloane, Investor Relations for Lucid. You may begin.

Welcome to Lucid Group's Third Quarter FY2021 Earnings Call. Thank you for joining us today. On the call, we have Peter Rawlinson, our CEO and CTO, and Sherry House, our CFO. Our quarterly report on Form 10-Q for the second quarter, ended September 30, 2021, was filed with the SEC and the related earnings press release was issued after close of market earlier today. Both are posted on our website. Before we get started, we want to emphasize that some of the statements on this call, particularly those regarding the future financial performance of the Company, production and delivery volumes, macroeconomic and industry trends, Company initiatives, and other future events are based on the information that we have as of today and include forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are subject to numerous risks, uncertainties, and other factors that could cause actual results to differ from expectations. We refer you to the cautionary language included in Risk Factors in our quarterly report on Form 10-Q for the quarter ended September 30, 2021, as well as other documents filed or to be filed with the SEC for a fuller discussion of such risks, uncertainties, and other factors. Forward-looking statements made during today's call speak only as of the time they are made. And we are under no obligation, and expressly disclaim any obligation, to update, alter, or otherwise revise any forward-looking statements, rather as a result of new information, future events, or otherwise, except as required by law. You're cautioned not to place undue reliance on these forward-looking statements. 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 currently available in our earnings press release issued earlier this afternoon, as well as in the investor deck available in the Investor Relations section of our website at ir.lucidmotors.com. And now I'd like to turn the call over to Lucid's CEO and CTO, Peter Rawlinson. Peter, please go ahead.

Thank you, Lauren. We're very excited to welcome stakeholders to Lucid's Inaugural Earnings Call. We've achieved tremendous amounts over the course of 2021 and we are excited to lay out our vision and priorities for the Company. We look forward to continuing to work with investors and analysts to build long-term relationships with our stakeholders. For those of you who are new to Lucid's story, we were originally founded as Ativa back in 2007. At that time, we were focused on advancing our battery technology, logging over 20 million miles in real-world driving data. Armed with everything we learned as Ativa, we then turned our efforts to creating the best car in the world as Lucid. Rethinking from the ground up every single aspect of the vehicle, from design to engineering to manufacturing. The initial results of our efforts is Lucid Air, which carries with it the means to accelerate the adoption of electrification while redefining luxury in the automotive market. As we continue to bring Lucid Air to market, it's clear that the opportunity we have in front of us is massive because the market opportunity is not just for electric vehicles, it's for vehicles overall. Currently, there's only about 2.5% penetration into the U.S. vehicle market through EVs, and only about 4% penetration into the global vehicle market. We see the luxury car market expanding at an annual rate of about 5% over the next few years, ultimately reaching over $700 billion in global sales near the middle of this decade. We believe that the growing customer sentiment for electric vehicles, coupled with government mandates encouraging their adoption, provides significant support for the EV industry overall and for Lucid's position within it. Lucid is uniquely positioned to capture this opportunity driven by our key differentiators, namely our technology innovation and the people who work here. Now, first off, we believe that our technology is worlds apart from even the current market leaders. For example, no one expected Lucid to achieve even 400 miles of range, and now we have an EPA certification of 520 miles of range for the Lucid Air Dream Edition R. We've created this technology with an eye towards an ability to manufacture it at scale, which is where true innovation lies. Furthermore, we have a drive to continue innovating, which is why we've been able to surpass even our early range estimates. As another example, our technology powered every car in Formula E, the world's premier electric motorsports series. Indeed, it changed the sport. Our battery packs have enabled Formula E cars to complete full race distances on a single charge. What we learn from every race car, at every race, goes directly into the battery technology powering Lucid Air. As the media and early customers have learned, our vehicles are truly the fusion of hardware and software, made possible by one of the best teams in the industry. We have auto industry veterans, including members of my former Tesla Model S team, working with former executives from Apple and learning from their customer electronics experience, along with so many other standouts from the automotive and tech industries. We plan to leverage our team's abilities to continue to improve vehicle function and features, even after customers take delivery via over-the-air updates. Before we update you on some of our substantial achievements during the most recent quarter, I would be remiss in not highlighting some of our most recent achievements outside of Q3 and that's because these are quite significant. First off, we started delivering vehicles to customers at an event at our Silicon Valley HQ, just two weeks ago on October 30th. Now these preceded an increasing number of deliveries nationwide slated for this month and next, including more than two dozen deliveries to paying customers that occurred just this past weekend. So you may have already witnessed your first sighting of Lucid Air in the wild. Yes, you'll have a full report on customer deliveries during our Q4 Call, so watch this space for more. Next, just this morning, Lucid Air was officially announced as Motor Trend's 2022 Car of the Year. It is arguably the most prestigious award in the motor industry, seeking out true innovation and groundbreaking vehicles. For a new brand and a new company to win; to my knowledge, that's only been done once before. And I should know, I was there. Getting back to the matter at hand, in Q3, we secured a number of certifications required to sell a vehicle ahead of those customer deliveries that I've just mentioned. This includes full FMVSS, CARB, FCC, and FDA safety certifications, all of which further establish our credibility and cleared the way for the ramp-up of Lucid Air deliveries. But what I'm most proud of is the official EPA rating of 520 miles range. We achieved this landmark through our world-leading in-house technology, not by simply installing an oversized battery pack or off-the-shelf parts. Our Lucid Air Grand Touring has an official EPA-rated range of 516 miles and it achieves that with the 112 kilowatt-hour battery pack, giving it an industry-leading efficiency of 4.6 miles per kilowatt-hour. Taking a step further, we have 6 Lucid Air variants in the top 6 positions of the EPA range ratings for EVs. And unlike many other EV companies, we design, develop, and build our powertrain and all of our EV technology components in-house, with an emphasis on efficiency. We view this as a strategic competitive advantage for Lucid as we look ahead. Next, after securing the EPA rating, we officially commissioned our factory in Casa Grande, Arizona, and started production of Lucid Air. At a factory event on September 27th, we hosted our customers, media, and guests. All had the opportunity to drive Lucid Air. The reactions and feedback from this experience could not have been better, including broad validation from important media. I rather like when reporters call Lucid Air jaw-dropping and the future of cars. The fantastic experience these customers and the media have had with Lucid Air to date has only increased interest in the brand, and the result is an accelerated pace of new reservations, currently at 17,000 and climbing quickly, which has also spurred us to increase the total production quantity of the Dream Edition to 520 both to accommodate demand and to recognize the landmark EPA 520 miles achievement. Lastly, I'll highlight that the customer journey has also been an area of focus for us this past quarter. We now have 16 Lucid studios and service centers across North America. But this is only the beginning. I'll talk more about our plans for expansion shortly. Now, I wanted to look ahead to our near-term strategic priorities, which will see a continued focus on achieving progress against our existing activities. As I mentioned earlier, last month, we started delivering Lucid Air Dream Edition models to our reservation holders. We're currently ramping up customer deliveries. We will soon start to deliver Lucid Air Grand Touring models, followed by Touring and Air Pure next year. With such demand across the Lucid Air lineup, we felt it critical to accelerate expansion of our advanced manufacturing plant, our AMP1 factory in Arizona, essentially investing in our capabilities to mitigate future business risks. This process started in Q3 with progress well underway on the addition of 2.85 million square feet of manufacturing space to our Arizona factory. This expansion will allow for a significant increase in production capacity for Lucid Air and enable production of the Gravity SUV in 2023. Speaking of expansion, our retail footprint grew significantly this year, including our first location outside of the U.S. in Vancouver, Canada, which we opened last month. We plan to have 20 studios and service centers open by the end of this year. You can see acceleration as a theme in the second half of 2021. We also continue to increase our service footprint across the U.S., not just with physical service centers but also with the roll-out of our mobile service program. We expect service centers to continue opening in North America, and we anticipate hiring a significant number of additional service technicians as we expand our capabilities. We're optimistic about these goals, even in a challenging environment as COVID-19 continues to present numerous obstacles for the auto industry and supply chain. Lucid is no stranger to this, but we have continued to deliver against our timeline and with the highest standard of quality. I would like to commend the Company’s employees who work relentlessly and tirelessly to help Lucid's progress and grow during these recent periods of uncertainty. Lastly, I would like to spend some time providing an overview of our longer-term strategic focus areas, as well as upcoming major milestones. Lucid continues to grow its operations in the U.S. but as part of our growth strategy, specifically our international strategy, we intend to expand our sales, maintenance, repair services, and manufacturing activities outside of the U.S. Again, with the goals of mitigating business risk and charging future growth. On the retail and service front, we're looking to expand our footprint in Europe and the Middle East, and we expect to enter these markets in 2022. There has been continued expansion of the team in both regions with key additions to leadership and the employee base, and we're excited by the prospects of these key regions. We believe this will help establish Lucid as a global brand and address untapped market demand in these regions on an entirely new level while also taking action to address climate change through sustainable mobility. Moving to our Air lineup, the longer view will see production expanding to include Touring and Pure models, as well as future variants. With our in-house technology established in Lucid Air as the new benchmark for EV efficiency, we will be quick to maximize this potential. If we can achieve 516 miles with just a 112 kilowatt-hour battery pack, it's easy to imagine a smaller pack, with the weight and cost savings afforded by it, which would allow for a much more trainable EV that can still achieve 300-plus or 400-plus miles of range. Finally, we're excited to launch additional vehicles over the coming decade, including Project Gravity, a luxury SUV that leverages the Air's platform and will elevate the SUV to a new level with groundbreaking performance and category-defining interior space. We look forward to sharing more details about Gravity next year, ahead of expected production in 2023. With that, I would like now to hand the call over to our CFO, Sherry House, who has been a tremendous addition to the Lucid team. Her experience and background have been truly invaluable. I couldn't have asked for a better partner to work with me on the next phase of this very exciting journey. Sherry.

Thank you very much, Peter. I'd like to start by expressing how pleased I am to be speaking to all of you today for Lucid's inaugural earnings call covering the third quarter of 2021. Just 6 months ago, I joined this fantastic team which Peter has assembled, and I've witnessed firsthand what is possible when you put a passionate and persevering team on tasks to set a new standard in vehicle electrification. This has been a very active quarter for the Company, highlighted by external validation of Lucid's many technological and design feats and even marked by a number of industry firsts, such as the first EV to reach and exceed 500 miles of range on a single charge. On the finance front, on July 23rd, we completed our reverse merger deep back transaction with Churchill Capital Corp Four and our pipe investors to form Lucid Group, Inc. This transaction brought approximately $4.4 billion of net cash on Lucid's balance sheet. On July 26th, we further raised our public profile and access to capital through our public listing on the Nasdaq as LCID. These events significantly bolstered Lucid's balance sheet and derisked the near-term execution of Lucid's forward plan. This capital will increase production capacity and vertical integration at our production facilities in Casa Grande, Arizona, and support the readiness of our global supply chain. Second, this capital will enable our commercialization and globalization efforts by expanding our studio and service center footprint while planning for future localized manufacturing. Finally, this investment will fund R&D efforts to enhance and grow the technological moat that Lucid has established. Specifically, the dollars will advance the development and launch of new variants of the Lucid Air and the Gravity SUV, as well as future vehicle programs and other technologies. I'd now like to turn your attention to our third-quarter results to put the quarter in context. You'll see two primary themes throughout our financials. First, the strengthening of our financial position, which we just discussed, and second will be the transformation of our Company as we ready ourselves for large-scale vehicle production. In our Q3 results, you'll see costs associated with our startup production in September. However, you will not see vehicle revenues until Q4, given that customer deliveries began on October 30th. In Q3, Lucid recognized revenue of $232,000, predominantly related to the use of our battery packs in the Formula E race series. There is seasonality in this revenue stream and similar to 2020, we expect to see the lion's share of battery pack revenue in Q4. The cost of revenue was $3.3 million and includes the cost of goods sold related to the startup production at AMP1 that occurred in September. Engineering, Research and Development expenses grew by about 72% year-to-date compared with the same period in 2020, predominantly driven by investments in talent, prototype expenses related to the testing and certification processes that Peter referenced earlier, as well as the production quality validation fleet that we produced at AMP-1. On the SG&A side, expenses increased by approximately $400 million for the 9 months ending September 30 versus the same period in 2020. A key driver of SG&A expenses is headcount growth related to the build-out of the sales and service network as we prepare for additional deliveries in the fourth quarter. We also invested in people, processes, and systems on the G&A side of the house to support Lucid as a publicly traded Company and also to support the globalization of our business. Lastly, there was an increase quarter-over-quarter in stock-based compensation across both R&D and SG&A; this increase is attributed to a cumulative catch-up on employee grants. Accounting treatment required the merger to close before 2021 grants could be recorded as stock-based compensation. Transitioning to our balance sheet and cash flow, at the end of the third quarter, Lucid had a cash position of approximately $4.8 billion, reflecting the $4.4 billion from the SPAC and pipe, plus the cash on the balance sheet at the time of the close. We also added $173 million from the exercise of public warrants prior to the notice at cashless redemption, which occurred on September 8th. The cashless redemption provided investors who had purchased the LCIDW warrants with access to the stock without the burden of making an upfront cash investment. As to the close of our public warrant program, that decision resulted in the exercise of nearly all of our outstanding public warrants. The cashless exercise also reduced dilution by enabling a 0.4458 to 1 ratio on the issuance of shares to public warrants exercised. We observed a significant amount of goodwill with our retail investor base due to this cashless provision and our decision to extend the warrant redemption window through October 29, which allowed some who missed the initial redemption window to still exercise for shares. We want to reiterate how much we appreciate everyone who exercised their warrants and are pleased to have such a diverse and supportive investor base. Lastly, I would like to comment on CapEx to close at our balance sheet highlights. We increased our net property, plant, and equipment by over $250 million from the prior year. This PP&E growth is related to the build-out of AMP-1, investments in machinery, tooling, and equipment, and the expansion of our retail studios and service center footprint throughout the U.S. and internationally. Looking onward to the fourth quarter, we are incredibly excited about the road ahead. We expect to ramp up production and continue to increase customer deliveries of the Lucid Air. We're seeing increasing interest in the Lucid Air with over 17,000 current reservations. Heading into 2022, we remain committed to our plan to achieve 20,000 units in the calendar year. However, this plan is not without risk, given the extraordinary supply chain and logistics challenges that the automotive industry has been facing. Financially, we're proud to strengthen Lucid's balance sheet as we commenced production at customer vehicles heading into the fourth quarter. We believe we are well-positioned to fund the exceptional growth opportunities in front of us as we move through 2022. In closing, I'd like to thank all of you for joining our Third Quarter Earnings Call, a recording of which will be posted on our Investor Relations website. I'd also like to thank our talented employees for their hard work and dedication across our headquarters, facilities, retail stores, and manufacturing plants. It's because of your collective efforts and the efforts of our partners that Lucid can create value for our investor base and drive our ultimate mission to bring sustainable energy technologies to the world. I'm personally optimistic about the future of Lucid and the value that we will deliver to all stakeholders: customers, suppliers, partners, and investors. Before we transition to analyst questions, I'd like to note that we are exploring additional methods to ensure that our broad and growing investor base can participate in the Q&A, and we hope to have that implemented in early 2022. With that, we'd like to open the call to questions.

Thank you. Please stand by while we compile the Q&A roster. Our first question comes from the line of John Murphy with Bank of America. Your line is open.

Good evening and good afternoon, everyone, and congratulations on your first quarter as a public company; that's a significant achievement. Everything else is coming together here. First question for you, Peter, and Sherry, feel free to add to the second part of this. Considering your current efforts and the success of the Air, along with what is expected from the Gravity, 90,000 units capacity by 2023 seems somewhat modest, as it suggests that your demand might greatly surpass that figure. Peter, could you share your volume goals or aspirations for the future? Additionally, regarding the stock and access to low-cost capital, Sherry and Peter, would you contemplate a larger issuance sooner rather than later to raise capital to potentially accelerate the 90,000 units capacity in 2023 and possibly grow even more than what has been previously discussed?

Quite an interesting point, John. Right now, we're laser-focused as a Company and the whole management team under my direction, on scaling what we've got. We are laser-focused on growing the scale towards 20,000 units next year and 50,000 but we're planning on 500,000 units by the end of the decade. We have a plan in place to expand Casa Grande to that level. We've also got localization of manufacturing. We have incredible high value in our manufacturing as well because we manufacture the entire technology suite: the battery, the motor, the inverter, the whole electric powertrain in-house. We’re not just buying in parts here and just having value that way. There's a whole lot of in-built value-add to the cars that we've got. We've got a Casa Grande capacity planned out to 365,000 units. But of course, we also plan probes in other parts of the world: the Middle East and in China, and this is going to be part of our global expansion plan. We’re very ambitious in terms of the scope and make no mistake this is a technology play; this is a technology race. As a tech Company, it's our technology which we are confident will put us in this preeminent position. But as you know, we designed this technology to be truly mass manufacturable. I think scaling our volume is well within our sights.

It's great to have you with us, John. I can address the second part of your question regarding balance sheets and capital deployment. As of September 30th, we have $4.8 billion, which positions us well for 2022. You'll notice a significant increase in capital expenditures next year, with plans to deploy multiples of this year's CapEx. We are already ramping up this acceleration. In June, we announced that we would bring forward $350 million of planned CapEx investments into the 2021 to 2023 period, and we're also increasing our overall investments between 2021 and 2026 by 6% to 7%. We are committed to this plan and believe there is a growing availability of capital from various sources. It's worth noting that we haven't taken on debt yet, but we could secure a favorable loan-to-value ratio if we decided to. We're optimistic about our capabilities, and we believe we are enhancing our ability to deploy capital efficiently and swiftly.

And then just a second question, Peter. I mean, obviously with the Air you have a knockout product with best-in-class range. Arguably, one of the best if not the best on the planet. When you think about Gravity, that's a tough act to follow. How do you view Gravity's differentiation in the market? I mean, presumably, given the form factor, it's not quite as good a range as Air, but what’s the real, pun intended, pull for Gravity to the consumer in the market?

So glad you asked me that. We've made a whole bunch of advances with Gravity project. It's very close to my heart. We're getting it ready for production late '23, and I think it's going to be equally as disruptive in the SUV space as Air is in its sedan space. We're going to deploy the space concept, miniaturization of the electric car train, incredible range for its class, and it's going to have one or two really big dialing, unique features as well. I am super excited about Gravity.

Okay, and then sorry just a housekeeping question, Sherry, how much stock comp was in SG&A and R&D specifically in each line item, if you could just give us that if you have it.

I can tell you that the total was $235 million, which is roughly double what it might have otherwise spent. This is really related to needing the merger to occur before it can be reflected in the accounting statements.

Plus the stock is performing very well. So that's always a good a high-class problem to have. Thank you very much, guys. I appreciate it.

Yeah, of course. And it was more, that it's a cumulative stock than it was the stock price to the quote, right?

Okay.

Great. Thank you very much, guys.

Thank you. As a reminder, ladies and gentlemen, we ask you that you limit yourself to one question and one follow-up. Our next question comes from the line of Adam Jonas with Morgan Stanley. Your line is open.

Hi. Good evening, everybody and congrats on the MotorTrend Car of the Year Award. That's incredible, especially considering it's your first car. So, well done.

Thank you.

Thank you, Peter. I have a question regarding the change in reservations from 13 at the end of the quarter to over 17 now. Can you provide some insight on this? I understand you opened up reservations internationally, so I'm interested in the North American reservations within that change. Additionally, within the international segment, how many are from Saudi Arabia compared to non-Saudi Arabia? Any details would be appreciated.

We don't disclose international reservations before we announce the 13,000, also, I mean, the bulk of reservations is our home markets, U.S. and we haven't even opened up the big market in China. But absolutely, Saudi is great because it's our biggest market number of reservations, and that's really heartening that the country, which has gained its wealth based upon its carbon economy, is so forward-looking and sees the efforts in corrective product.

Okay, Peter, I'll leave it to you whether you want to disclose that or not, but just for my second question, on your distribution strategy, can you remind us why the advantages of going direct to consumer and why you are not using a franchise model? And I don't believe you're considering using a franchise model, but just wanted to confirm that. Thanks.

That's correct, Adam. The important thing here is that we are creating a new brand. It's not just about the product. The product defines the brand, but there's more here than just Lucid Air and a luxury brand. The consumer experience in the consumer journey is too precious to delegate to third-party. We need to choreograph the consumer's journey through discovery, through intrigue, through purchase and ownership, and how better than to do it directly.

You can also just drive consistency in messaging as well. You're not working with independent franchises and dealerships that just really allows a lot more control, controlling pricing; there's a lot of benefits that we see in this direct relationship.

Thank you, Sherry. Thanks, Peter.

Thank you.

Thank you. Our next question comes from the line of Itay Michaeli with Citi. Your line is open.

Great. Thank you. Hi, everybody. Just a first question. First, going back to the reservation growth up to 17,000. With the momentum you're seeing in reservations, how are you thinking about when to, I guess, more formally unveil Gravity and even open up the reservation book there?

Oh gosh. Well, I guess that with all things, in good time. I'd like to have Gravity to a level of greater substance that we can actually show a car, possibly later next year, I would say. But right now, I've got such laser focus on Air. The reservations are growing, increasing. And I'll tell you something else. I'm really particularly happy about the split in those reservations. We've got a really nice blend. I mean, we're sold out of our Dream Edition, as you know. We've expanded that to 520 units to reflect our 520 EPA rating and the growing demand. But we've got a really nice blend of reservations for Grand Touring and Touring, too, very much reflecting the sort of split that we will manufacture over the next 15 months or so.

In fact, when you look at September 30th numbers, we had talked about the 13,000 reservations and we also had talked about that that reflects an order book and revenues of about 1.3 billion. So you can do the MSRP math from there, and it gives you a good sense of where that mix-wise and see consumers not over-index some Pure; it's just a really nice balance. So we're happy with where it is and we'll continue watching it as we go forward. We're also going to be enjoying decreasing costs over time and improving margins. We feel like we'll be in a really good position as some of these other products pick up.

That's all. That's very helpful, and just maybe secondly, hoping you can update us on your latest thoughts on the Dream Drive software strategy and in terms of partners versus what you might look to do in-house?

Our strategy here today has been, of course, key focus on creating the very best electric vehicle in the world with the most advanced electric power train and endowing that car with the core foundations of a hardware suite: 32 sensor suite, 14 cameras, with solid-state 120-degree line up, and a whole host of long-range radar and closely mixed radar. So that's been the step 1 of the plan. Create the most advanced foundations for the house in terms of the hardware, and have software that is broadly competitive in the marketplace. Now we've achieved that, the next step will be to advance that software. We're planning as a default to do that in-house and we're building the team. However, I am very open here in Silicon Valley to potential partnerships in terms of the software but I see that as a potential bonus; I think the default position is going to be development software now and take that to will cost standard based upon the hardware suite we've got and to develop that in-house.

That's all, it's all very helpful. Thank you.

Thank you.

Thank you. Our next question comes from the line of Stan Shpetner with Pickering Energy. Your line is open.

Hi, thank you for the opportunity to ask a question and congratulations on the launch of your new vehicle. Could you provide some insight into the variability of gross margins across the different versions of the Air? Additionally, as you aim to increase sales volumes over time, how will a higher proportion of direct sales affect the trend in gross margin as that mix changes?

Yeah, thanks so much for your questions. So we're expecting to have competitive growth margins by the time we reach mid-decade. You're going to see that our gross margins are not going to be there initially because we're activating depreciation expenses, we're training new employees, and we're going to be driving efficiency within the manufacturing arena over the next year, especially year and a half. Then you're going to see as the volume increases, just gross margins improving overall as that absorption improves. With respect to your question about how are we thinking about the higher-priced model versus the Pure, we are in such a uniquely advantaged position because of our technology. It’s going to need a lot to go from the tremendous machine of our Dream Edition and still be able to produce the Pure over 400 range and also our 500-horsepower. We can do that while reducing costs by reducing one of our motors; we also can reduce the battery pack and we have a lot of trim features that can be activated or deactivated to basically make those products exactly what the customer is seeking. So those are the enablers that we have.

That's absolutely right. Right now, we're using our extraordinary efficiency to achieve range to create a technological tool to define the brand as the range king. In the future, we can use that technological advance as a commercial enabler. It means that we will be able to provide a car which is competitive with range; we’d be at 300 miles, 400 miles, whatever, but with a commensurately smaller, proportionately smaller battery pack than the competition, because our technology is inherently more efficient. The battery pack is the single most expensive item in an electric car; this will affect the margin and therefore, it has a direct bearing upon our commercial viability as a Company.

We have an outstanding team including a strong supply chain and manufacturing team. They have experience from their time at Audi, where they successfully got plants operational and efficient while reducing costs. This expertise is having a positive impact on our products and factory, which is an important point I wanted to highlight.

I am with you in the factory with cost down going for the future; the car is designed that way.

Thanks. Just to follow up. Earlier you mentioned that you have a fairly balanced order book between the different versions of the Lucid Air. Can you give us a little bit of a sense of when next year that we could expect to see shipments of the Pure to begin?

I think it's in the latter part of next year when Pure comes out. But my impression is Pure — I want to get the cost down. I want to fulfill our mission, which is the mass adoption of electric vehicles.

Great. Thank you very much.

Ladies and gentlemen, this concludes our question-and-answer session. I would now like to turn the call back over to Peter for closing remarks.

Thank you so much. As you can see by what we've achieved in Q3 and by future plans, there is a tremendous amount of exciting activity here at Lucid. Supported by our industry-leading technology, our ongoing investments in cutting-edge manufacturing, and the outstanding team we have assembled, we believe there are sizable opportunities for shareholder value creation ahead of us. I would again like to thank our employees for getting us here. We have a truly unrivaled team. I'm proud of what we have accomplished, and I'm optimistic about the opportunity ahead of us. We look forward to speaking with you regularly and keeping you updated on the progress we're making. We aim to be transparent in our approach and look forward to engaging with you. Thank you so much for joining us here today.

Ladies and gentlemen, this concludes today's conference call. Thank you for your participation. You may now disconnect.