Capital Markets Day Transcript - LCID 2026-03-12

Speaker 11

Please welcome Lucid Interim CEO, Mark Winterhoff.

Speaker 5

Good morning, everybody. Thanks for coming at this rainy morning in New York City. Very glad to have you all here. And also, hello to everybody who is joining us online. Maybe good afternoon, good evening, wherever you are. So I'm so excited to share all the fantastic information that the team has put together for you today. And, yeah, maybe let's just get right into it. Our Investor Day, it's actually the first Investor Day that Lucid Motors has done, is under the motto, Accelerating to Profitability. This is our North Star, really focusing on profitability. And I want to quickly walk through a couple of things that we are going to cover throughout the day. And actually, what I would like you to take away is what we have written here, what I'm sharing with you, what are the main key takeaways. First of all, we have a clear vision to be the leader in mobility technology. Second of all, we have a very, very strong existing product portfolio. Lucid Air is number one selling EV in its segment. Gravity is off on a good start and we obviously plan to expand on this and we will talk about this later. Then we are launching our midsize platform at the end of this year. Midsize is a very important platform and product for us, a big portion of our future, and that's why we actually spend most of the time today talking about midsize and how are we making it possible that the same DNA, our compromise-nothing ethos that we have established with the air and the gravity, we are also able to put into the midsize but at a completely different price point. Then we also talk about our strategy in autonomy which we actually started in 2025 and which we are progressing in the future. It's a very important topic for us. I really want to emphasize it's not a one-off where we you know do one deal and then move on to the next. Playing a big role in that upcoming robotaxi market is a strategic endeavor for us. But it's not only autonomy is not only important for robotaxis, it's also important for consumers. And we're also doubling down on that and creating new revenue streams, high margin revenue streams, that we can add to our portfolio of revenue making offerings we are working and continue to improve our operations to be able to scale in a very affordable way and capital lightweight and we go into those details later on last but not least showing you the path to profitability to cash flow positive by the late decade so if you So, take nothing else away, please remind those things after you leave today. Let me start with our vision. Through technology, we are creating exceptional experiences to drive the world forward. Let me unpack this a little bit. First of all, technology. I think it's widely known that Lucid is very obsessed about technology. Some people say we're doing it a little bit too far, but that's what we are. That's what brought us where we are right now as a company, and we will not relent there. It is our ethos. This is what we're focusing on also in the future, and you hopefully see this today throughout the day. But we're not doing this only for the sake because we like to do technology. We're doing this to create exceptional experience that benefits the customer, and that make customers want our vehicles or other offerings that we offer. So it's very important to say technology is not just a thing for itself. We do this to create exceptional experiences. Drive the world forward. We always try, and we actually always do, push the boundaries. We don't want to do what everybody else does and stop when people say, oh, it can't be done. We always want to push the boundaries and drive the world forward. Let me start with our current product portfolio, the success that we have with it, and how we go from there. The Lucid Air in 2025 was the number one best-selling luxury sedan in its segment. As you can see on this chart here, we outsold everybody on the Visa EV side in our segment. and actually we're defining this segment pretty wide as you can see here. The ones that are on the tail end we didn't even put on the chart, otherwise there would be probably 10 more on the lower end. Here's the thing, we're not only number one in the EV segment, but in the whole segment, including all internal combustion engines vehicles, we are number three. The whole segment, luxury sedan segments, we are number three selling vehicle. The sedan is the number three selling vehicle in that whole segment, which we believe actually shows that our car is not only good as an EV, but it's actually, we personally say, it's the world's best damn car. Then gravity. Gravity is off to a good start. We ramped it up last year, and then when you compare it to other vehicles that have been introduced in the market, and you look at, hey, three quarters after the introduction into the market, we are right there where the Rivian R1S was at that time, slightly behind the Tesla Model X, but let's not forget Tesla Model X was in a completely different time. There was no competition at that time. So off to a good start here and we obviously want to build on this. Then, awards. It's probably known by everybody that Lucid received a lot of awards. As a matter of fact, the Lucid Air and now also the Gravity have received more awards than those four esteemed brands that you can see here together since inception in 2022 and it's not only the air it's also now the gravity yeah for instance the one that you see the first ones that you see here car and driver ten best list gravity was now also elected to be in the 2026 car and driver ten best list for the first time air got the same the third time in a row there's a little fun fact on this Lucid is the only brand where all of their vehicles are on the 10 best list of car and driver I know we don't have that many vehicles so that might be easier for us than others I know on top of that I'm personally very proud of the one in the lower left last year for the Lucid Air Sapphire, becoming the German performance car of the year last year. You probably know I'm German, so very surprising for me that German journalists, not just anywhere, but 32 esteemed journalists picked the Lucid Air Sapphire as the performance car of year. Very proud of that. So, this picture here shows what Lucid is today. Centered around our two awesome vehicles. We have fantastic interior, as you can see on the upper right, the very luxurious interior. Fantastic driving dynamics, traction control on the upper right, repeatedly also talked about by critics. We have built our production platform. We invest a lot in the past, which is now tapering down. We will hear about that later on. And we have awesome EV technology drive units, but also our battery packs. That's what everybody knows about Lucid. Centered around gravity and lucid air and about, I would say, fun to drive, thrill to drive, and obviously efficiency. So where are we going from here? Our strategy, obviously, is grounded in maximizing what we have built with air and gravity. And we will go throughout the day in what we're doing there and how that is progressing. On top of that, midsize, a very important new platform for us, start of production, end of this year, and then ramping up throughout 2027 and then in the later years. Extremely important for us, and we will talk about that in further detail. On top of that, we continue to drive forward our already pretty strong software-defined vehicle platform. And software innovations, not only for the sake of innovations, but also to provide new awesome products and experiences to our customers and add new revenue streams that we haven't had in the past. Last but not least, as I mentioned in the beginning, the robotaxi space is strategic for us, and we aim to lead in that space and have a big portion of that market. So, scaling is very important for an automotive manufacturer. When you look at the air and the gravity in the lower right, the market that we're looking at right now in the countries that we are in or which we are expanding into, we're looking at a 40 billion dollar total addressable market. With adding the midsize platform, we're going from $40 billion, almost 10 times higher, to $350 billion. And if you then add on top of that the robotaxi market, which is the different estimations of how big it is going to be, ranks somewhere between $300 billion and more than a trillion. We just want to stay on the low side. That's why we just used the $300 billion, but we're adding that and, as you can see, it almost doubles then our addressable market compared to what we're doing with our personal owned vehicles. Why is scaling so important and why is going into midsize so important? Well, when you look here on that slide, on the left-hand side, you see last year's gravity unit costs. Let's take that as 100 percent. If you look at our projected unit costs for the mid-size in 2028, we see a reduction of 60 to 70 percent right now. So a dramatic reduction of unit costs for the mid-size, which you would assume because it also comes at a lower price point, which we'll talk about later as well. But that's not the only thing. It's not only about midsize. It's also about the rest of our portfolio. Because that scaling, that efficiency gain, also allows us to reduce the unit cost of the gravity, which is shown here right now, by 30 to 40 percent, and also the air, obviously. So for the whole business, scaling drastically changes the unit economics. That's what we're working on, and that's why we are pushing forward with the mid-size so much. And we have some very interesting details about that later in the presentation. It's not only about the material costs, it's also about manufacturing efficiency. And we're working very hard, and you have seen in last year that after, in the beginning, a little bit slower ramp-up that we were hoping for of the gravity, we were basically creating a hockey stick in Q4, doubling our production from Q3 to Q4, and in a total year, we doubled our overall production. And we did that because we really focused very much on improvements on our supply chain. As you all remember, 2025 was probably the worst year for supply chain I can remember with all of the things that happened in talking about additional terrorists, talking about magnets, talking about other issues like fires in aluminum plants. And at the end, then we had issues about the chips availability. So a lot of things went the wrong direction. but we overcame them. And we also were able, from the beginning of 2025 to the end of 2025, to really drive down already the bomb costs of the gravity by 25%. On the production, I just mentioned, almost doubled the production throughout the year, and also significantly decreased the gravity production cost, which is now also continuing, as I just showed you on the slide. On the quality, actually going back a little bit longer, since we started with the Lucid Air, we drove down our warranty cost by 85 percent. That's another big topic of us for cost reduction. When it comes to supply chain, we obviously have still work to do. I mean one big thing for instance, right now the way it looks, those external disruptions don't seem to slow down. Therefore we are rethinking and reworking our supply chain to make sure that we are even more insulated from external shocks. And obviously we are in a very good position with our bill of material costs right now with the midsize, we need to land that, the last little bit that is missing, stay there and then get into production with a midsize. Then I would like to talk about software, software innovations. We have tons of software in our vehicle. Much of it is actually not necessarily visible to the When you look here on the lower part of that slide, these are all things like traction control, our driving dynamics, our efficiency that leads to our enormous range, fast charging. All these things are enabled, obviously there's hardware involved, but it only gets as far as we get it because of fantastic software. And then we have what the IC is, which is the infotainment. Here with, for instance, with the new Gravity, we have our new UX 3.0. We have Surround Sound Pro, which I'm a very big fan of. I think I talk about it a lot and everybody knows that. And we have also CarPlay in the air and Android Auto. Then you also see then when you when you look at our ADAS features our Dream Drive Pro you obviously see a little bit you know the vehicles driving around in the display but the biggest portion of that technology is under the hood yeah again a lot of software. So we know though that when people look at software what they talk about is very often hey that's what I see. And we do a lot of things now to make it also clearer and provide new offerings to our customers on the visible piece. Let me tell you a couple of informations about that. Today, actually yesterday, we announced that we're now rolling out CarPlay into our gravity vehicles. So over the next couple of days and then globally weeks, all existing owners will get an update which then has CarPlay or Android Auto built in. We're also launching a intelligent AI assistant. You will hear more and see more about that later today. We're bringing hands-free driving which we already have in the Lucid Air into the Gravity in Q2. We're bringing back the new user interface that we have in the Gravity back into the Air in the existing vehicles in summer. We also launched Digital Key in the Lucid Gravity in summer and by the end of the year we will have in-city and free driving in city and in the gravity. We also have a new product coming which we talk about later, vehicle to home. That's maybe something for a later event. So a lot of things are going to come into our vehicles, into our existing vehicles and our new vehicles that are very visible for for customers and actually met several of those including CarPlay ones that customers are banging our door at you know why is it not there yet it's there starting right now and I tried it I used it works perfectly so going to autonomy as I said in the beginning very very important for us and it's a new addressable markets for vehicles but it's also a new addressable markets for revenue, software revenue that we are embarking on. How are we doing that? Well first of all we obviously start with our L4 ready vehicles and we will hear about this throughout the day. Also the efficiency that we have, the efficiency leadership helps us particularly in the RoboTaxi market where the cost of operations is actually a very important topic, even more important than the purchase price or the cost of the actual vehicle in the beginning. We're working with best-in-class partners in order to do all this with a very capital-efficient approach. As I mentioned, not only at this Investor Day, but right now Lucid is accelerating to profitability and therefore we want to do everything that we do in a way that it's capital efficient and at the same time provides exceptional experience to our customers. That's why we are partnering on autonomy and that's why we are not spending as much capital as others may do or are about to do. And last but not least, I already said that it's not only about robotaxis, it's also about providing this to our consumer vehicles as something that you know you could compare as FSD or better what does this mean what does this lead us to so lucid tomorrow in the middle here of this slide you still see our vehicles nothing is changing here we're still grounded on our awesome vehicles our compromise nothing approach when it comes to the traditional vehicle attributes will continue but we add much more around the software, around user interfaces. You will see later on first hints of our UX 4.0 that really takes our user interface to the next level. We will have more RoboTaxis than what we have already announced in the future. We have an AI assistant and we will have an even more productive environment on the manufacturing side, all to in the end become profitable. So as I just said, the core is the same, we're playing in a much bigger TAM, we're adding our software capabilities and making actually money with that, L4 is our North Star to get there as fast as possible and in the end be a profitable company and cash flow positive. So with all that I would now like to hand over to my colleague Erwin, our Senior Vice President of Global Revenue, to tell you more about how we are continuing with air and gravity before we then later on go into

Speaker 10

Thank you Mark. Thank you and thank all of you for coming out today and thank you in the listening audience online as well. I'm really excited about the opportunity to talk to you about what we've been doing, how we got here and where we're going in the future. So today I'm going to tell you a story. I'm going to tell you a story about Lucid Air and what we've done to get here, how we're growing Lucid Air, how we launched gravity and scale gravity with a magnificent growth in Q4. And then I'm going to talk to you about our distribution network. We've got to deliver these vehicles, so we're growing our distribution network around the world. There's 42 new locations around the world. And then I'll land on this new diversified revenue source. It's a billion dollars of revenue but i really like it i'll tell you why i like it in a little bit for lucid air mark already spoke about the fact that this vehicle was the most awarded vehicle since inception it's great for us that it's been growing like it has consecutively year over year last year ending up number one in its segment but it's not just that we're number one in our segment for last year in the EV segment. Six consecutive quarters leading its EV segment. And last, Q3 to Q4, that growth is 23% in volume and 30% in market share, really solidifying our position. We're going to continue growing that position. I'm excited about that. And then we launched Gravity and started scaling Gravity. And you can see from Q3 to Q4, 4X growth in Gravity deliveries. Really excited about that, positioning us well for continued growth with this vehicle already winning awards. Gravity has gotten off to a really good start for us. One of the reasons I like Gravity is because 80% of the customers coming into Gravity are actually new to Lucid. so we're growing we're expanding our attainable market and i like that the other thing i like about this is that 28 of the conquest in the gravity are coming from non-suv segments so i like to say we're actually growing the suv segment with this vehicle that's not just the best ev on the planet it's the best damn car and don't listen to us let's look at what some of the critics and our writers in the industry and outside have had to say motor trend said this is the best as good as an ev suv gets and i actually think the ev was a typo I think they meant to say, it's as good as an SUV gets. And if so, I agree with them. This is literally as good as an SUV gets. And then Esquires, we won the 2026 car of the year, said the car defies the laws of physics. And it's true. Who would have thought that an SUV that carries seven people and their luggage can also get 450 miles of range on a single charge. And oh, by the way, outperform sports cars on the straightaway and around curves and in every other way. And oh, by the way, still maintain the maneuverability that we love in parking. It does things that shouldn't be possible. That's defying the laws of physics. And then I really like TechCrunch because they highlight how our brand and our brand promise comes to life. Compromise nothing. In their first gravity test drive, TechCrunch says it's an electric SUV that doesn't make compromises. it. I love it when we work and we put our hearts and soul into our promise, and that promise is appreciated. But don't just listen to us. Of course, I'm the SVP of global revenue. I'll tell you that. But I want you to listen to somebody else. This is one of the most popular tech reviewers on the planet. Not a car guy. A tech reviewer just happens to love cars. And so when When we heard that he test drove our air, I, of course, was very interested in hearing what he had to say and what he was going to tell his 20 million followers who have looked at his videos billions of times. Let's listen to what Marquez Brownlee has to say.

Marques Brownlee, Analyst — Tech Reviewer

I daily drove a Model S for many years. I said they were basically the best daily driver you can get, but then I found one that that I feel like one-upped the Model S in every useful way. And that was the Lucid Air. I think they just do the packaging so much better. It drives super well. They have a lot of space on the interior. They have a power opening frunk, more frunk space. They have more rear foot space. They have better headroom. It also has CarPlay and Android Auto. All the things about being in the car are great. Yeah, Lucid Air, that's the obvious alternative.

Speaker 10

That's pretty cool. I was excited about that, and when I thought it couldn't get any better, I heard he also drove a gravity. And here's what he had to say about the gravity.

Marques Brownlee, Analyst — Tech Reviewer

The lucid gravity, as far as a rock-solid, like, does all the normal fundamentals of an EV better, 800-plus horsepower, drives amazing, has great suspension, great NVH, super quiet, ton of space on the inside, a ton of storage, great premium materials. it's just aimed at being the ultimate alternative to the Model X yeah it

Speaker 10

succeeded thank you the only thing he didn't say was otherworldly I mean this thing is unbelievable I know the EV industry has been seeing some headwinds you know that I know that I'm not going to shy away from it the reality is we're still very bullish and globally we have good reasons to be bullish when we look at the S&P mobility forecasts for the growth of EVs globally excluding China if China were included this would be a much bigger number but look at the growth at the darker portions of the bars this is from 2025 to 2035 15% compound annual growth rate that's stunning and by the way that's when the gas-powered cars over that period will be declining we are growing our segments growing our industry is growing we're very bullish three and a half X in the next ten years so why would you believe these numbers I know you see a lot of forecast out there. Think about this. Whenever there's new technology, there's this hype, this technology hype, and there's a hype curve out there where everybody gets excited about the new technology. They don't know what it is, but they want one. And then they begin questioning themselves, and then they chase after some new shiny object. But as attraction takes and people realize that in this case, the EV makes a lot of sense. They don't have to go to gas stations and smell you up their hands or stand in a dark gas station getting gas at night. They can just plug it at home. And oh, by the way, the cost of ownership is so much lower and the performance is instantaneous and oh by the way it's the only thing robotaxis will work on and these vehicles get better with time every day as a matter of fact I'm downloading software on mine right now so right as I speak like any other great investment my investment is increasing in value as it gets better that's why we believe this will go so let's overlay the hype cycle over the s&p data and it matches almost exactly we're just at the bottom of what we call the trough of disillusionment as we begin to grow and get traction and growingly and globally we're going to grow we're going to continue to grow and I'll explain to you why in a few slides but we've also had some industry tailwinds recently you might have heard that one of our competitors who will not be mentioned announced that they're gonna cancel production of the Model S and Model X and there's 350,000 of those vehicles in the car park in the United States. We're going to help those people learn about Lucid and learn that they can upgrade, just like Marcus told us, from their Tesla into a Lucid. And this is happening every day. How do I know that? Well, for people trading in their Tesla Model X Lucid Air is the number one vehicle they go to and not by a little bit by a factor of 2x versus their next choice we are the obvious choice and gravity is following in precisely the same footsteps gravity is also the number one choice of customers trading out of a Model X so we're already there We are confident that we're going to get more than our fair share of that car park. In order to do that, we have to scale production. And last year, we started scaling production, as you know, the second half of the year. The dark bars represent our scaling throughout the year. And you can see here that by September, we had already achieved the run rate required to hit our initial 2025 targets. And by November and December, we got to the 2026 rate. So we've proven that we can scale, we're scaling production, and we'll be able to deliver. in order to deliver these vehicles however we need a distribution network we need a global distribution network and this map represents where we are today the United States four countries in Europe and the Middle East with the white dots being where we are currently and now we you can see where we're going to be in just this year, in 2026. We're adding seven new locations in the United States, which, by the way, happens to be 15% more than we have now. It's that same compound annual growth rate. And I found it interesting that the growth rate of electrical charging infrastructure is also 15 percent so there's some truth here and there's some consistency so adding these seven locations in north america this year is going to help position us not just to deliver this year but to position us for midsize and the good things we're going to do with that product you'll hear about a little later we're adding 10 new locations in the middle east and 25 in Europe, including all of these countries in the lighter gray. We're going into Europe. Why are we so bullish in Europe? Well, the EV adoption rate in North America, by the end of this year, will still be just 8%. In Europe, it'll be 20%. We need to be in that market. We need to grow in that market. We need to succeed in that market. And so we're focusing there with a 200% increase in our distribution network. And in particular, in Europe, here we go. Yes, in particular in Europe, you can see the countries that we're in. Seven new countries will be represented this year. We already have, in fact, late-stage LOIs for these seven countries for these 25 locations. Germany is particularly interesting. As Mark spoke about the German performance car of the year being our Lucid Air Sapphire, designed, engineered, and built here in America, I absolutely love it. But we're going to be in Germany. We already have two locations identified, and we're moving in. And then we've got 10 other locations with late-stage LOIs. So we're really going to double down in the German market as part of the broader European operation. Our distribution network looks a little different here than it does there. And I'm going to explain that. In North America, we have enjoyed really favorable retail economics. By going directly to consumer, we cut out the middleman. And the middleman's got to get paid. so why not pay ourselves right we're gonna we're gonna retain that but more importantly we'll retain the relationship between us and our customers from discovery to shopping the acquisition ownership and service and then reacquisition and oh by the way this recurring revenue from software we 100% want to retain that relationship especially as we grow this is the heart and soul of our brand and we need to make sure that we deploy our culture and the lucid brand properly here now in europe and the rest of the world we have other challenges We need to scale quickly. We're just scratching the surface in Europe. So we need to scale quickly, and we need to do it in a capital-efficient way, and so we're engaging partners. So we have more of an indirect model in Europe that allows us to pull ahead our growth of our network by up to a full year with 85% less upfront capital. That's smart growth. it's intentional, and it's demand-driven. That's why we're taking a different approach in Europe. I started out telling you about additional diversification of our revenue streams, and I love new revenue streams. This billion-dollar opportunity, I know a billion dollars in and of itself, well, I'll take it. But I really like it because when I look at the sources of the billion dollars, that gold bar is gold for a reason. In fact, it's gold for three reasons. One is that's where the money is, okay? Secondly, this is really high quality revenue, very high margin. As you can imagine there's not a lot of cost in maintaining that software once it's developed, but because we co-develop our software with our hardware, and we can do so much in controlling the vehicles, it's valued by the customers. And this gives us an opportunity to monetize this, and it's recurring revenue. So I love recurring revenue. And the third is it's growing. As we grow it's going to grow not only because our car park grows but also because the value we provide to our customers continues to grow so it's golden for a reason this is going to help diversify our revenue and i love what this is doing for us you'll hear a lot more about that in a little bit i'll give you a little bit of a tease right now we already told you that the lucid air and gravity are the most technologically advanced products on the road today and you can see a lot of the technology that's on here don't worry i won't go through every detail there's too much this is this is just scratching the surface but in 2026 alone look we're adding the ui ux 3.0 from gravity in the air we've got this lucid ai assistant that you will hear about and see very soon and that's going to be in air and gravity along with vehicle to home backup just all kinds of goodness and gravity's got even more and we're already in 2027 this is just what we've identified and committed to for 2027 and beyond so i like to say like fine wine our cars literally get better with time the longer you own them the better they get and this is what we're after 95 of the functionality of our vehicle is upgradable by software. 95%. Think about that. Last year alone, in 12 months, we had 13 over-the-air updates. That's a lot more than the industry average, which is two. We had 13 last year. And we're going to continue making our cars better and better. Now, we know that our customers absolutely love our ADAS and other software options because the adoption rate is already at the high end. Air is at the high end of the industry average of 10 to 40. Air is already at 40. And gravity is at 65%. Over 50% more than the high end of the industry average. This is very powerful. This is going to help us monetize our software, diversify our revenue, and continue making our products better for our customers. So I've just told you about our Lucid Air and Gravity and how we've demonstrated market leadership and will continue to grow and do that. I showed you that we've proven our ability to scale, production and deliveries, and how we're growing our distribution network and expanding globally. And finally, the diversification of this very high quality revenue. this is going to position us well not only for this year with the products we have but it'll position us well for the future with our mid-sized product and beyond speaking of mid-sized product please allow me to introduce you to our senior vice president of design and brand Mr. Derek Jenkins

Speaker 4

thank you thank you Irvin good morning everybody thank you for joining us bright and early today It's really, really appreciated. I am so proud to be able to say I've been working at Lucid for over 10 years, taking us all the way back to 2015. It has been a journey, quite a journey, a very exciting one. That was when we really kicked off the mission, the innovation that Mark talked about earlier. And I think that's really set us on such an exciting path all the way through the creation of air, through the creation and production of gravity, all the way to this point today, which is so exciting. Today we're going to talk about midsize, and this is a big deal for us. I've been working on the midsize together with my colleagues in engineering and planning for two and a half years now, and it takes that long to really create something special. And what is so incredible and so special about midsize is it represents a tenfold increase in total addressable market. This is a huge step for us. But we're also maintaining the key DNA that people know about Lucid and that is so celebrated by our industry experts. it's also going to be at an accessible price point that is designed to scale we're taking our volume to the next level all the while cutting our cost by up to 70% this is a big deal for us it's a big step for Lucid as a company and our core philosophies taking this to the new level now we started 10 years ago with lucid air and lucid gravity with a clean sheet to really create the most innovative EVs or even the most innovative vehicles in the world. And I really think we've done that with air and gravity where we've really established ourselves as key players in the luxury category with advancements in space packaging, range and efficiency performance and of course design we're very proud of our design and of course I would say that as the head of design but I feel it's true I think we really are about the future and we bring the future to people every single day but with midsize it's really about that next step in the marketplace How are we going to win? Well, it's going to start with not just one vehicle, not just two vehicles, but three distinct products. Listen, the midsize category is very competitive. It's a very diverse consumer segment. and we think these three unique products will give us maximum opportunity to hit the widest audience possible. And that audience is, as I mentioned, tenfold of where we are today, but it's a different audience than our current market. It's very price sensitive, it's very value sensitive, and we've taken that very, very serious. Now today's customer target represents about 10% of the market. it's that very desirable luxury category. And as Erwin pointed out, we do very, very well there with Air and Gravity. But if we're honest, it's a relatively small category. It's a very desirable group, tech savvy, mature EV owners, and they love their Lucid, and we've become the product of choice for them in that category. But as we look forward to the future, we've done our homework. we've found our key categories that we're targeting and there are three from the left side we have our upscale nurturers they tend to be more family oriented they tend to be more technology savvy and they really are adapting to ev quickly the secondary category is our trend setting achievers they tend to be both both urban as well a little bit more adventurous and outgoing on the weekends, but most importantly, they like a very, very expressive, advanced design. And thirdly, are active explorers. They like advanced technology and experiences, but they're a little bit more outdoorsy, they need more functionality and space, and of course, design is still a big, big priority. These three new categories represent a target of up to 50% of the EV segment. So the combination of our 10% existing EV target, our 50% new target means we will be targeting 60% of the coveted EV market. The first of those products will be called Lucid Cosmos. This is going to be, yes, yes. This will be our first product. Very excited about this. And the second product will be called Lucid Earth. So we have air, gravity, cosmos, and earth. There's kind of a theme there, right? How did that happen? Who came up with that? And, of course, the third product, well, you're going to have to stay for, maybe it's our next investor meeting. I don't know, but that's the third product. Now, why is this so important? Why are these three products so critical? Well, it's about the positioning of these products in the marketplace. As I mentioned earlier, the midsize category is very dense. It's very competitive, and it's diverse. It's a diverse customer segment. So on the left side, we're targeting folks that, again, want a more sporty vehicle. I always say a future-facing vehicle, a more dynamic product, and we're very well positioned with Cosmos there. In the middle, it's the in-betweeners. It's the product that is still sleek, it's efficient, it's fun to drive, it's spacious, but also it's a little bit more rugged, a little bit more capable. And then on the right, maybe it's a little bit more traditional, still future, but it's more spacious and definitely more geared towards an outdoors experience. And we've positioned ourselves really, really well for the diversity that exists on the global stage with these three products. Now, we've done a ton of research about our customers, and we talked to them about what are their priorities. As a design boss, of course, design and emotion and experience is extremely important. The overall look and feel of the car inside and out has to be exceptional, sophisticated, modern, crisp, clean, and emotional. But it's not only that. It has to be functional. It has to have the space and the utility for people, gear, stuff, pets, you name it. It all has to fit in. They demand that. And our designs will deliver, as they do today, at a value, at a great price point. What's next? Of course, range. Range and efficiency. We are the leaders. We do this so well, and that is right up there with the top purchase consideration for folks in this category. That is a fact, and we obsess about this, and Emad and Zach will come up in a minute to tell you exactly how we're achieving that and how we're going to do it at scale at that coveted price point. Third performance, Lucids are fun to drive. It's a fact. They're a blast, and we get that time and time again. I love driving my Lucids, and we're going to bring all that thrill, all that experience and emotion, dynamic, not just zero to 60 times, although we do that great, but it's the steering dynamics, it's the braking, it's the way the car stays so solid and so planted on the road. We do that so well. The experience. The digital experience is an obsession, especially right now. We've taken big steps. You saw the improvements, our OTAs that have been happening with Air and Gravity. we're going to take with lucid ux 4.0 we're going to take that to the next level with with the midsize program and all of this is going to be done at an accessible price point and bring that value to consumers so through that research for the customers we actually showed them our vehicles we shared with them the price point the feature set the metrics and you know what this was also, by the way, against a wide range of the top peer players in the category, both at the low end of the market to the high end of the market. That sweet spot where we're going to play, and guess what? We blew the competition away every single time. Number one in exterior design, number one in interior design, number one in specifications, and number one at our claimed price point and value proposition. And I love the quotes off to the side. It was the best looking car, looks like the Jetsons, right? I grew up with that. Okay, I'm sorry. I'm dating myself. But you know, it's about the future, right? We can still be optimistic about the future, and we're going to deliver on that. So the design itself, this is a big opportunity, especially for us in the design department because we created air and gravity with a consistent DNA look and feel. With the mid-sized program we really wanted to evolve that. We wanted to mature it but we also wanted to put even more emotion into the products and I think we've really done that. It starts with a very sleek emotional silhouette really concentrating on enhancing the dynamics of the vehicle. We put more movement, more muscle, more sportiness. We give the car that planted stance. The car sits so well on the wheels, and I think people are going to see that. They are a more emotional product, and it's really going to stand out in the category. Cargo. Through our miniaturization of our components, we repackage the interior, the layout, optimize space inside the vehicle, optimized cargo areas. We will be the space leader in our category. And that's so important because we're making the car oversized on the interior while keeping the outside of the car lean and sleek and compact, dynamic, sporty, and aerodynamic. So important. We are going to have class-leading aerodynamics. A drag coefficient below 0.22, that might not mean anything to some of you but that's really really hard to to to achieve i'm not going to lie there are days where i curse the aerodynamics team but we work together and we solve it and we get those numbers it's true you know it we've been there but it is important it's the design really validating itself making a car look great and work well that's design and the aerodynamics will deliver and that will support our range target. Now, on the inside of the vehicle, hopefully you're familiar with lucid gravity. We took a big step forward with this layout. We call it the clear view cockpit. We position the display higher in the vehicle, just below your line of sight of the road. This is good for safety, for viewing both the road in front of you, as well as the content on the screen safely, reduce latency, and we reshape the steering wheel so you see the screen uninterrupted, and this is the Clearview cockpit. We've taken that and evolved that on the midsize. We've moved to one single screen placed up high, 36 inches, and this is dedicated to both driver and passenger alike, and that's a big deal because we create a more unified space, a more social space, and this is something that we've really brought as a theme into the midsize program, and that allows the driver and passenger to have their own unique experience. Sorry, I'm going to go back one. And we kept the physical controls, of course, to be able to control fan speed, temperature, volume in the middle, keeping our tactile feeling on the steering wheel so we can control screen and features alike. And, brace yourself for this one, mechanical analog door handles. Okay? Inside and outside the vehicle. What a time to be alive. The future is now. Okay, I'm joking, but they are pretty cool. So, feature-wise, we're focused in four key categories with 4.0. Energy. We have some very unique applications that are basically widgets that help you understand the efficiency of the vehicle, how your driving dynamic affects your range, and just inform you so you don't have that range anxiety. We put so much effort in making the car go far on as little as possible. We want the drivers to be informed and understand that. And this is something that we're continuing to work on on the user experience team to come up with features and display items that really inform the driver next-gen navigation this is going to be about a more three-dimensional navigation experience better way finding and it's also going to be better turn-by-turn we're working to layer the turn-by-turn navigation experience over our ADAS representation so that's going to be super super exciting entertainment and productivity. Ervin talked about this a little bit. This is really about applications coming inside the car in areas of streaming content, productivity, even gaming. And that lastly, natural interactions. Obviously we're living in a world of AI accelerating innovation and natural voice is going to be at the very center of the driving experience for Lucid going forward. Speaking of which, our AI assistant. We're all super excited about this. The team's been hard at work at it, and I think we've really hit it out of the box with the Lucid intelligence AI experience. It's agentic. This can literally plan your day out for you, whether you do it in the car or do it on your phone prior to your trip. It can think through a plan for your day. It can ask it simple things. You can ask it complex things, but it can think through it and give you recommendations. It's personalized. It learns what you like and don't like over time. It becomes your mobility partner, your friend, and it can optimize your mobility experience through personally knowing you. It's seamless both when it's computing just on the edge inside the car well it's the same when it's computing on the cloud and so that experience is very seamless it's not changing from one assistant to another assistant which is so common in the marketplace today and maybe most important with the rapid changing industry it's language model agnostic meaning we can work off of any language model we're not dedicated to one single language model and it's a very dynamic world out there right now the news changes on a daily basis we need that flexibility and we need to be agnostic so with that i would like to first talk about the personality because the personality is quite exciting we put a lot of work to really brand lucid brand the experience inside the car whether you want a personality that's more laid back and chill and easygoing or perhaps the other end of the spectrum one that's more direct and just gets down to business and gives you the information you need or perhaps something balanced right in the middle this is again something that can grow over time and we're really going to evolve this idea of personality inside the vehicle so to give you an example of that experience that we're talking about I'm looking at you Dave Dave's here. Dave is our head of user experience and has been at the center of developing our Lucid Intelligent Assistant, and he's going to give you a demo of that right now. Dave, take it away if you can hear me.

Speaker 12

Hey, Lucid. Hey, we're going to do a live demo here, and there are a bunch of people looking in.

Speaker 2

Got it. Let's keep things smooth and clear. What would you like to show them first?

Speaker 12

uh well uh actually yeah let's um it's a little chilly in here maybe you can bump the

Speaker 2

heat a little bit for me warming things up a bit let me know if you need anything else

Speaker 12

thanks um and my back is still a little jacked up from the flight in

Speaker 2

maybe put some heat on it seep heating's on for you medium level that should help your back

Speaker 12

yeah thanks that does feel better i've got a few days in new york city to explore after this And I'm looking for something to do that's a little unique, maybe off the beaten path, and maybe has kind of a maritime or nautical vibe. Any suggestions of things I can do?

Speaker 2

Here's the scoop. You've got some great off-the-beaten-path maritime options in New York City. You could check out the South Street Seaport Museum. It's got a maritime city exhibition showcasing the seaport's history. You can also sail on the historic schooner Pioneer around the harbor. Think Brooklyn Bridge and Statue of Liberty views.

Speaker 12

Yeah, let's go to the South Street Seaport Museum area. That sounds pretty good. What are some things I can do around there?

Speaker 2

You've got some great options around the South Street Seaport Museum area. Here are a couple highlights. One, the South Street Seaport Museum Lighthouse, about 2.9 miles from where you are, with a strong rating of 4.8. It offers a unique maritime-themed landmark. to the Seaport District located right around one Seaport Plaza at about the same distance it's a vibrant area with shops dining and historical attractions

Speaker 12

okay well that sounds pretty good is there a place I can park around there

Speaker 2

there are several parking options near the South Street Seaport Museum here are two possibilities one icon parking at 80 Gold Steet about 2.9 miles away all

Speaker 12

Let's just go to Icon Parking. That sounds good.

Speaker 2

You're all set to head to Icon Parking at 80 Gold Street. Safe travels and enjoy the South Street seaport area.

Speaker 12

Great. Thanks a lot.

Speaker 4

Just a small example, and even though that's a video, it's not staged. Super exciting. You know, I'm guilty probably more than most of looking stuff up on my phone while I'm driving. I mean, you literally could go buy a drill from Home Depot with using this, and we've actually played with that, and Dave's had a lot of fun with it, but we're super excited about it, and trust me, it does work much better than that outside. Before I hand off to my engineering colleagues, I just want to leave you with one thought. Lucid's in a very, very unique position as a brand, and it's really based on kind of the values of the company that Mark and Irvin talked about earlier. We're in a unique position. If you think about the traditional brands, the storied brands in the world that we all have the most respect for, they tend to focus on traditional automotive attributes and excellence. I'm talking about ride and handling, performance, comfort features, design. these traditional elements that have evolved over over a hundred years and and and modern automobile is quite impressive as a result and then you consider the traditional players the new I'm sorry the new players whether that be our fellow startups or even our competition from China focusing more on advanced technologies, ADAS, connected experiences, aspects of EV. They do that well. Lucid is rare. We're able to compete at the highest level with the storied brands on those traditional attributes. True excellence at what makes a solid car great. At the same time, we're competing at the highest level on the new world technologies and ADAS connected experience and cutting edge with EV efficiency and performance packaging etc. Very few companies can claim to live at the intersection of those two worlds. In fact I would say nobody else can say that like Lucid. That is what's going to give us the edge when we come down into that coveted midsize segment because we're going to do it like we've done it with arid gravity at an awesome price point. So with that, I'm going to hand off to my colleagues. Come on. There we go. Imad Dalala, our SVP of engineering and software, and Zach Walker, chief engineer of Midsize.

Speaker 7

Thank you very much, Derek. Welcome, everyone. So, every time Derek talks about midsize, my excitement level goes up so high. And why not? It should. Because midsize is really a pivotal moment of Lucid in many ways. And today, I'm going to talk how we're able to deliver that amazing experience that Derek just showed us at scale and at that accessible price point. So, like Derek, 10 years ago, I joined Lucid. And the first thing I was asked is to design the most efficient car, the most powerful, and the most spacious. And I said, maybe that breaks the laws of physics. So I stayed humble, working with the team, including Derek, Zach, and many of us here, to try to approach the laws of physics smartly, not break them. And yes, efficiency was the number one priority in that list. And this graph shows the result of that mission and that drive, which turned out to be truly rewarding. efficiency is important because it defines the size of the battery it defines how battery energy is converted into mileage driven and this chart in particular shows 15% of greater efficiency achieved through Lucid Air compared to its best competitors in production today, including a known U.S. leader. This efficiency, as I mentioned, is important. And the question is, how are we able to achieve that? And why it's been so hard to replicate? As the graph showed, we have over five years of an advantage over the competitors, and that gap is widening. And my answer to that, most companies optimize a subsystem, a one subsystem at a time. And that's actually a great way to make the vehicle a failure, to lose the whole vehicle. Because at Lucid, we obsess with a system, the entire system, not a subsystem. And that relentless pursuit of excellence across the vehicle, the systems, any system that dissipates energy in the vehicle from drive units, our Zeus drive unit in air and gravity set the standards in every metric possible. Efficiency, power, density, torque, density, speed in all EVs globally. Our energy density and the battery set a technological benchmark and combined with our software, folks, as Mark mentioned earlier, the underlining secret sauce that connects and fuses all these systems together and make them work in harmony. So, I want to come back to the point of efficiency just for a second. As I said, efficiency defines the battery size. Why? Because it's directly linked to the miles driven. And this is truly a foundational cost lever. so our folks and efficiency are driven by economics not just by to make the best damn vehicle sure that's also super desirable we know that but also to make the vehicle affordable and today of course I'm still talking about air and gravity just to set the stage to midsize and what has been truly distinctive as I mentioned earlier is fusing the range efficiency with performance we didn't trade these away we made them coexist together blending comfort acceleration range handling in one single vehicle the Lucid Air Grand Touring today achieves over 512 miles of range with 819 horsepower. It's the only sedan that sets the standard. And that's not a coincidence. That's pursuit of science at every level. And we deliver all of that while we still have best-in-class, exceptional interior space. And that space is not accidental. It's super intentional, and it's engineered in the vehicle because we achieve it through not making the vehicle, not by making the vehicle larger, but by making the technology smaller. our drive units are super compact power dense our battery backs are super energy dense and so the rest of every system, the cooling systems the body in white, the chassis all designed intentionally to be super efficient so now I'm sure many of you wonder will midsize live up to air and gravity will midsize deliver the award-winning excellence as air and gravity and at what price point and answer is yes cosmos and earth preserve lucid DNA uphold fully the lucid DNA in energy performance and space completely redesigned our systems building and our promise of technology that has been realized in air and gravity to take mid-size to the next level. It's so many years of hard work leading to a platform. This is a platform that's used across the differentiated products that Derek just shared. And how are we able to achieve these attributes? again we leaned in our philosophy approach scientific approach designing every system holistically as one single system and meticulously innovate and optimize across all engineering domains from the drive unit which I will speak about more in detail in a minute the high voltage battery system that Zach will elaborate on in a minute our bi-directional charging systems centralized low voltage electronics or zonal architecture and of course super aerodynamics Derek Spain now how do we achieve these attributes I'm incredibly excited to reveal Atlas our next generation drive unit that has been entirely designed in-house and will be manufactured in-house as our previous generation of drive unit which we call Zeus so what's different about Atlas when I joined in 2015 I was able to use our talented team to design that technology but no matter how talented the team is assembled for the first time We evolved, and of course, with a new aim and goal and scale level in midsize. Atlas, designed from day one, a low cost, high volume, that results in a materially lower bomb cost, lighter, fewer parts. So Atlas isn't just a drive unit. It's a mindset. it's a shift in our mindset so you can ask now what and how we measure the superiority of that atlas drive unit one of the best ways to measure that is through power to weight ratio criteria or metric this metric is important because it's a key that impacts energy efficiency because that would mean you would use less material and it would also impact, of course, vehicle mass and space. Comparing against the best over there, we have astonishingly 40% higher power density in the most cost-conscious drive unit in the world. so where does this feed to ultimately this feeds to the most important criteria in an EV take it from me technical criteria in an EV which is energy efficiency again it means or directly link it to the battery size which is the most expensive part in an EV and I'm super thrilled to say that again our new platform for the midsize going to be class-leading in efficiency with projected over 10% greater efficiency compared to the most optimized and the newest most optimized platforms in the world including the US leader of EVs German and Chinese leader that everyone these days talking about so let me take a step back so if midsize is capable of matching air and gravity DNA. How do the economics work? The answer is radical efficiency. It's truly not a buzzword. It's a philosophy, it's a set of principles that we adopted at Lucid to be able to keep the Lucid DNA in energy performance and space but expand on that with software and manufacturing efficiency. Software first, design for manufacturing mindset was a prerequisite for midsize. Eventually, engineering-led companies win. As the head of engineering, I would say that. And truly so, because the right engineering decisions determine everything downstream in the product cost scale and that's exactly how we design midsize and build it to deliver excellent product at a lower or very low price point or low cost and thirdly at scale all together combined together not choosing one all of them now I want to bring Zach to the stage to give you examples of these innovations and share with you much more cool stuff so efficiency fundamentally this means doing more with

Speaker 3

less radical efficiency means doing more for the customer and giving them product superiority but requiring less from our business and leading to a cost efficiency this is radical efficiency this is embedded in everything we are This is what the midsize architecture was built on. Everything was about radical efficiency. The battery, the body, the drive units, the architecture. Radical efficiency defines everything we do. So what I'm going to do is I'm going to take you through five of these points and talk through how radical efficiency led to product superiority and cost efficiency for our business. So first, we are going to talk about energy efficiency, one of the first big pillars. And we're going to talk about the battery. So when we talk about the battery, this is the midsize battery. And as you see, a gravity is going to appear, and our architecture is going to come next to it. But you'll see there are multiple components that we built throughout gravity that all merge into one. This one component is then assembled to the battery. So we have a singular high-voltage system. This joined-up thinking, this way to merge it all together, leads to one, product superiority. We still are a superior product when it comes to charging. We still have all the features that we've talked about, vehicle-to-vehicle, vehicle-to-home, but we didn't throw money at the problem. You see, radical efficiency leads to cost efficiency. When we talk about non-cell parts, That is an 80% reduction in components. That is an 80% reduction in components. And all of that is one system that you can build offline and mate into the full vehicle. And then when we talk about those same parts, that is a 45% reduction in cost compared to gravity. We're going to compare to gravity a lot. And gravity was already an engineering marvel. What we're showing here is why midsize will be mind-blowing when we do radical efficiency. So what do we talk about with energy efficiency? I think the numbers that EMAD shows can really go over a lot of people's heads when we talk about miles per kilowatt hour. So I'm going to give a reference. We're going to talk about the fact that when we go 300 miles, our vehicle, the Cosmos, requires 69 kilowatt hours. That is not our overall range, but I'm just giving you a range of 300 miles, how much energy that takes us. But when you compare to others, that same 300 miles, which is the same distance traveled, requires some 73, 82, 86. That is 2,000 extra dollars the customer has to pay for and get no extra value. Who likes to give away $2,000? There's no point in that. to work where does it go you get nothing radical efficiency leads to product superiority because we can give the customer more for less to us but it doesn't stop there let's keep going let's look at the factory again air and gravity or a marvel but we've gone further when you look at the left you'll see the factory for the battery for air and gravity but midsize was miniaturized We reduced the components. We reduced the requirements on our business. We reduced the factory itself. By doing that, we could reduce the square footage by 40% while achieving a higher output, while also reducing our labor and overhead by 50%. This is radical efficiency when we talk about the pillar of energy efficiency. Now, we're going to talk about the drive unit, the amazing DNA, the thing we all love about air and gravity, of the driving enjoyment. See, Atlas helps deliver this. On the left, you'll see Zeus. On the right, you'll see Atlas. You see here how many of these components EMAD just told you about were merged. On the top now, Atlas was reduced to just a couple components. And then we expand and we see that we merged everything, the castings, the side faces, everything was simplified. We had to do that so, one, we could still deliver a superior product, right? We're still having the 3.5, zero to 60. We still have amazing highway passing, and we still have this motor contribute to our energy efficiency story. But the cost efficiency, 30% fewer parts, a commonized front and rear drive unit. We don't have to go resource all those components. We get scales, we get economy that comes together, and that leads to a 37% reduction in drive unit cost. This is radical efficiency. And when we put this all together, when we talk about the midsize and what the customer gets, this smaller battery, this smaller drive unit, this integration into the body gives us more customer space. This is more customer space without a bigger car. This is the customer getting a superior product, but not just for them, but for their cargo. We're talking about 24% extra cargo space compared to the average of our competitors. That's 24% more space, whether it's your car, whether it's an Uber that you're trying to desperately get to an airport in, or whether it's a robotaxi that you're doing the same. This radical efficiency goes across all of our businesses and leads to value for us and for the customer now emab brought up a really good point software efficiency ironically software efficiency is not about just the software it's about needing to do a system it's about a software divine defined vehicle now i know you've all heard this term way too much right this is probably the buzzword that is hitting us all all the time so what does a software-defined vehicle really mean it means changing the entire architecture centralizing as much as you can into a couple easy use so that you don't have to go and update the software for tons of things make the communications make the connections it means replacing components with virtual components so reducing the amount of parts but not reducing the customer experience and this leads to an utmost software efficiency when we talk about gravity. Everything that Irvin just told you about is still true. It is an amazing vehicle. It is constantly getting better. At the moment, multiple people are downloading OTAs and their car is becoming more valuable. But we had to take to the next level. And our new architecture takes all these same body electronics and merges them into three ECUs. What does this mean for us? This means, means, again, a superior product. You're still getting the over-the-air updates. You're still getting reduced latency because we have less connections. It's all happening on less ECUs. And you're getting this AI assistant that you just saw that is a game-changer for the experience and brings you into the world of the vehicle. But it gives you cost efficiency. 40 percent fewer wires compared to our competitors 40 percent fewer wires every wire you cut is cost you have to go make it you put it in the bundle that is 40 percent that is a reduced assembly time i'll tell you if you're in the automotive industry wire harnesses are usually not your friend they are like the worst thing to put in the car it is so difficult to deal with So when we were building our first midsize, everybody was afraid. We basically put like a full day. Like the entire team was circled around. Okay, how are we going to do this? We're going to have to rework this. We're going to have to do that. How are we going to force it in there? We were prepared. The wire harness went in four minutes. We prepared a day and it took us four minutes because the team was obsessive with radical efficiency. Obsessive about how we build this faster and have less demands on our business. This is radical efficiency in our product, in our software, in our software-defined vehicle. I want to really just show a scale and show what that means, right? We talk about this electronics architecture. I want to pull farther to the right because we want to centralize. Again, centralizing is not reducing customer value. It's increasing our ability to deliver customer value with less needs for us. So everyone is trying to pull to the right, right? We see here that there are some OEMs who are still more in a domain, but we see the more advanced pulling to the right and going to centralized. But you also need to move up in this matrix. Moving up is reduction of wires. That's not just a reduction of wires, but a reduction of parts. Again, that is using virtual components rather than real ones. And no one compares to us with that. We have reduced the wire count compared to some of those new EVs by 100%. We've really cut it in half. That is radical efficiency. That's how we're helping manufacturing. And that's how we're winning with our software-defined vehicle. And the last thing I'd like to chat about is our body. I'm here to make a huge announcement that we're not using gigacastings in the midsize. And again, everyone's surprised because everyone's heard gigacasting, gigacasting, gigacasting. It's what you hear all the time when we're talking about the automotive. of but we need to not follow trends we need to do what's right for us and for the customer when you optimize the body you find that there are a lot of spots that are the most efficient for steel and there are a lot of spots which are most efficient for castings and aluminum you have these corner nodes where we've put our mega castings in the corners because those are high focal points of stress and connections there's where it pays to put our castings and that's where we put all of time and effort but there's another place which is about customer value and customer repairability this is a huge deal to customers whether you can actually service your vehicle this is needed in the midsize segments so we obsessed about these front rails we've actually put two different separate sections of rail to have both high speed lower repairability most low speed high repairability and even another high-speed rail so we don't destroy the castings but we can easily repair and bolt in and we see this is where we want to go we want to have these mega castings and we want to have repairability we can see that other people are actually following this trend as well it's ironic that some people have been fighting for giga castings with their latest updates have fully moved to their front underbody being full steel stampings so we see that we believe in our trend and we believe we believe what we've done and we believe in how we design the body so what does this lead to it leads to product superiority it leads to a thousand dollars less of annual insurance that is how we help the customer that is how we're going to obsess and we're going to get mid-size to be successful it leads still to our five-star crash ratings and it leads to all the other benefits of space and performance that we've already shared but it's cost efficiency for our business we have a 65 reduction in our joining guns that is a third for increased jph and we have a two times improvement in our robot efficiency this is how we are going to be radically efficient in our manufacturing so what does this all mean What does this mean for products of purity? Well, you get a vehicle with better driving efficiency, better charging speed, better cargo space, and lower insurance. But we didn't throw money at the problem. No, we used radical efficiency and reduced the parts in half compared to some of our competitors. When we index to 100 parts, you see here that some have 110, some have 165, and some have 195. That is half the parts that our team needs to spend time putting in the vehicle. That is half the parts that we need to kick off, that we need to design, that we need to waste our energy on. That is a superior product with a real radical efficiency for manufacturing and cost. And this is what the mid-sized platform was built upon, and this is what everyone at Lucid obsessed about for the last two and a half years, as Derek referenced. So with that, you can ask the question, how do you take that and really impact your business, and what does that mean for our final outcome? Mark, do you want to come share and join what that means for us? Thank you very much.

Speaker 5

Thanks, Zach, for all the information. Didn't I mention in the beginning that at Lucid, we're obsessing about technology? I think it became very clear. But when it drives costs down and still maintains product superiority, I don't have a problem with that. Keep obsessing and deliver on it, so I'm perfectly fine with that. Because I want to show that slide again that we had in the beginning, that walk that brings us down from where we are at the gravity right now on the left-hand side to mid-size at a completely different level when it comes to unit cost and at the same time also optimizing the gravity and also the air obviously. So we're moving with the whole company to a completely different unit cost level with all of this very welcomed obsession of our engineering team. The biggest part of the unit cost of a vehicle are the bomb cost, the bill of material, the parts. And now there's a lot of talk about, and we've asked very often, hey, can you compete against the best out there and particularly with the new Chinese? Let me show you something. This is a comparison of the Lucid Cosmos current bomb cost against an equivalent or a comparable vehicle of a U.S. EV leader, who will not be named, and a Chinese EV, SUV, brand new, everybody is talking about and is so afraid about. But when you look at that, well, you can say, well, this EV leader is a little bit lower here. Well, but there's also lower range in that car. So if you would normalize it, the battery would be a little bit bigger. You would actually get to the same level we are. But we are on a lower bomb cost than a Chinese competitor that everybody is so afraid of when they come in globally. So we are in a very good position and very happy about all that obsession what the team has done has led to this. And typically, by the way, this is typically the starting point. After you've done the initial design, that's when you actually start to drive down the bomb cost even further. So I'm very happy to see that we are currently, and those are actually numbers that are sourced. it doesn't mean this theoretically, that is sourced numbers that we can already count on for the start of our production. So it's not only obsession of technology, it leads to cost reduction, and I'm very happy about it, and I think my dear colleague Taufik even more than I am. He will tell you all about it later on. So the Lucid Cosmos is in a great bomb position, bomb cost position. But that is a good start. But remember, we have three products we are working on and which we will launch. The next one is Lucid Earth. And given we are already further advanced when it comes to the Lucid Earth versus the other one that you have to stay tuned for, we already know that 95% of the parts are carryovers. and particularly the biggest, you know, most expensive parts, the batteries, the drive units, all of those things are carryovers. So you can expect that the lucid earth will have a very similar, very attractive bomb cost position for us. And now obviously we're working on the third model to take as much commonality into that as possible. commonality to reduce cost, but at the same time the vehicles will look very materially different. That means we are able with that, despite the commonality, to address different customer segments that Derek talked about earlier, to really address the whole mid-size market, which is, nowadays, much more competitive than it has been maybe a couple of years ago. I also want to quickly repeat what Zach has already said, because maybe I need to click one more time, here we go, stay there, thank you. One more time, obviously we're obsessed about our costs, but we also think about the customer, and when it comes to insurance, that's actually one of the big complaints that we hear quite often about EVs, hey, your insurance costs are materially higher than what I have with an internal combustion engine. That's why we actually focus so much on that, including the body composition, the body structure to make it repairable and not like when you have a small fender bender, you basically have to throw the car away. So we really have this $1,000 or, you know, 30% lower insurance cost that we are projecting based on our current information. So I would like to summarize everything that you, as much as that is possible to summarize, everything that you heard about our midsize. First of all, obviously, a significant market expansion. The term is about 10 times bigger than what we are working on right now when we add the mid-size to our portfolio. We will maintain the same product superiority that we have worked on so hard with air and gravity, also with the mid-size, at a very attractive cost position for us and therefore attractive margin position for us. And, based on our engineering, we make those cars also ideal platforms for our next endeavor, RoboTaxi's autonomy, that we will tell you much more about it after the break. Because we now have, I think it was a 20 minute break, and yeah, I wanted to just invite you for some refreshments and then see you in a few minutes here after a break when we talk about autonomy. Thank you.

Speaker 11

Please welcome Kai Stepper, VP of Autonomy at Lucid.

Speaker 8

Well, good morning, everyone, and welcome back to the Lucid Motor Investor Day presentation. Thank you so much for joining us today, both online as well as live, right here from New York City. As Mark mentioned in his opening remarks, autonomy plays an outsized role for the future of lucid motors so here's what I would like to share with you this morning I'd like to talk about how our vehicle platform is ready for level 4 autonomy I also would like to share with you what that means in terms of time to market I will share with you that of course we're not forgetting about our retail customers when it comes to higher levels of autonomy and of course i'm going to spend some time on our innovation technology and commercial advantages but before i get into all of that i'd like to address one question we heard a lot about great technology components ima talked about systems and subsystems isn't lucid interested in selling and licensing these components and subsystems the short answer is yes the long answer is there's much more so yes of course there's the drive units the battery technology our power electronics that come together to build our award-winning skateboard and vehicle platform but now we're taking it a step further we are offering complete vehicle platforms to our customers to enable them to turn radical efficiency into cost efficiency talk about the size of the deal of course Of course, selling components and licensing technology is great. There's millions of dollars in that, and that's a good deal. But when you think about now growing that to entire vehicle platforms, both from an EV as well as AV platform, you easily talk about 5x to 10x that size of component sales. 5x to 10x easily going into the billions of dollars per deal. So what is Lucid Motors' approach to autonomy? Well, by leveraging our innovation, our strong foundation and technology, we actually pursue multiple paths to commercialize autonomy. autonomy. On your right hand on the screen, you see what we will call personal autonomy. So this is higher and higher and higher levels of autonomy features for our retail customers. And by the way, the monetization for those features has already begun. As Erwin already showed with you earlier, and I will show you some more in the next few minutes. So that's Just on the one hand, on the right hand of your slide, you see business-to-business customers for robotaxi operations, where we see a strongly developing market that is happening after many, many years of promise and many, many years of hard development. So in short, Lucid Motors pursues a dual strategy when it comes to commercializing autonomy. A few facts. When you look at the overall industry right now, not just Lucid Motors, not just the segments we play in, But overall, what is the adoption rate or take rate for level 2, level 3, level 4 autonomy in the overall market? Well, it's at about 25% right now, give or take. But that is growing to more than 60% by 2035. Overall market. Now, Irvin shared with you earlier, the lucid take rate for our award-winning Dream Drive Pro is already between 40% to 65%. 40% to 65% take rate of Dream Drive Pro when the rest of the market is at about 25% or less. So you see the outside potential, because we can really forecast and assume that our take rate will not just be 60% in 2035, when it already goes up to 65% today. We anticipate a much higher take rate. On the other hand, on the right hand of your chart, you see the developing robotaxi market. That's been a promise a long time in the making, but it is here. You see the scale, you see the growth. Yes, total addressable market for ride-hailing with robo-taxis, less than a billion dollars last year. But that is growing to more than $300 billion by 2035, total addressable market. More than $300 billion. How is that possible? It's possible because the percentage of driverless taxis will grow in the same time frame from about 1% today to about 65% by 2035, leading to more than $300 billion of total addressable market. But in order to actually make that a reality, and this to become reality in the future, there's some important enablers that need to be in place. One such enabler is an underlying vehicle platform that allows for autonomous operation. So what does that mean? That means the subsystem that Ima talked about in the vehicle needs to be ready for level 4 autonomous operation. We're talking the steering system, the braking system, the network communication, the low-voltage power supply, the sensors, the compute, and the list goes on and on and on. And here's the rub. You get all of that straight from the factory from Lucid Motors. No retrofitting, no removing components or subsystems, no adding components straight from the factory from Lucid Motors. So let's take a look how we compare to our competition. There we go. So, some of these vehicles on the right, Some of you may already experience yourself in a robotaxi. At a minimum, you have seen or you may have heard about them. And their reality today, the I-PACE, the ONIQ 5 coming soon, the Zika RT coming soon. If you look at how we compare already today with lucid gravity, and you can see it right here we have it in the foyer you can touch it you can feel it you can check it out I will be around after the presentation to answer your questions we're already beating that in several metrics we're beating that in efficiency efficiency in miles per kilowatt hours we're beating it in charging speed think about this in 11 minutes you can charge at 200 mile range. 11 minutes. Think about what that means for operation of a robotaxi fleet. And of course, as I mentioned, we have the safety backups in place for the core vehicle operation, steering, braking, etc. But also the safety backup and redundancy in place for the specific autonomous operating system, like the compute, like the sensors and other elements. Now, when you look at how the Lucid midsize compares for Vortex, the operation, we blow them out of the water. Efficiency up to 4.5 miles per kilowatt hour. Charging speed with a smaller battery pack than the Lucid Gravity and others, up to 14 minutes, charging speed up to 200 miles, and of course, the same safety backups in place that we already built into LucidGravity. Now, this may all look nice on a chart, in a table. What does it mean in reality for our customers? Well, here's what that means. Here's how radical efficiency that Emad and Zach have talked about earlier translates into cost efficiency. Our lucid mid-size vehicle platform for robotaxi operation and for level 4 technology in general offers a significant lower operating cost per mile. You can see others have an up to 34% higher cost per mile for robotaxi operation. Now that may look very abstract in this chart. Let me make that specific for you. Just from charging speed and the range we get per one charge, that is a $2,000 cost difference per vehicle per year. $2,000 per vehicle per year. That still may not sound like much. $2,000 per year, big deal. Well, it is a big deal. Let's do the math together. $2,000 per vehicle. Let's assume a robotaxi fleet of 20,000 over the course of six years. 2,000, 20,000 vehicles, six years. That is $240 million, ladies and gentlemen, 240. Now, that is not small in terms of a cost advantage for our customers. Now, the efficiency that EMAT and Zach have talked about and some of the underlying technology foundation that I'm talking about has not gone unnoticed by major players in the tech and automotive industry. As a matter of fact, in July of last year, Uber decided to partner with us in a joint partnership with Nuro and committed to 20,000 units over the course of six years and decided to invest in our future with $300 million as well. But don't take it from me. There's a quote from Dara, the CEO of Uber right there, that says, Lucid's unmatched efficiency, autonomy-ready vehicle architecture, autonomy-ready vehicle architecture, and customer-centric approach gives us confidence in our ability to deliver autonomous mobility together at global scale. Those are not my words, those are Dara's words. So, you may ask, okay, you signed this deal with Uber and Neuro last summer. Great. How's the project going? What's happening? Well, here's how the project is going. We are right on track for commercial operation by the end of this year. Just a few milestones that we already have achieved since July of last year. Within seven weeks, only seven weeks after contract signing, we already delivered our first prototype vehicle to our partner Neuro for them to start testing and development and their software stack in our vehicles. Seven weeks from start of project. Since then, since September of last year, within the last six months, we added 75 more vehicles that are already delivered to Neuro. So that gives our partners a fleet already of up to 80 vehicles to collect data, to test and develop already today in the San Francisco Bay Area. This is only possible because our vehicle comes level 4 already from the factory. If we would have to re-architect, if we would have to re-engineer, remove components, add components, you can't do that in seven weeks. And you will see the production intent version right here in 3D and live in this room to touch and feel. So there's a couple more milestones to come, of course, this year. More vehicles, more homologation, more testing. But eventually, the start of the commercial operation by late 2026. That is how the project is going. Now, autonomy is a topic that's been talked about, written about for the last 20 years. And there's a lot of investment that has gone into autonomy. It is estimated that the industry between auto and tech has spent between $160 to $200 billion over the last 20 years to develop autonomous vehicles. between 160 and 200 billion dollars so matter of fact if you look at company ABC on this chart some of them have spent billions some others have spent tens of billions to develop autonomy vehicle technology well I'm here to tell you this morning that we are not going to spend a billion or a couple tens of billions very much to the joy of Taufik we're gonna achieve this with a lot less as you can see on this chart how is this possible a lot has changed not only from 20 years ago 10 years ago five years ago but two years ago in terms of how do you achieve autonomy when it comes to the availability of high performance compute when it comes of the availability to collect and store data in the cloud, however, the possibility has come to learn, train, and optimize your AI model in existing infrastructure. The cost of sensors has come down, et cetera, et cetera, et cetera. Drastically declining investment in order to get level four autonomy. So there's the declining technology costs on the one hand, but there's also the smart collaboration that we do with our partners, and that enables a reduced investment by Lucid Motors to get to level four autonomy. Another fact I want to share with you is our timing. So cost is one element that's very important. Maybe it's the most important, but there's also time to market. So if you take a traditional OEM approach, and you've seen some of the vehicle examples on the prior chart, you have to re-engineer, retrofit the vehicle. You have to remove components, you have to add components, you have to ensure that every subsystem of the vehicle has redundancy for the autonomous operation. Now, if you do that and re-engineer, you change the steering, just that. You have to re-test, you have to re-homologate, you have to re-validate. So that whole process, until you finally get to deployment, easily takes three to four years. We are cutting this time in half. We are able, because our vehicle comes ready from the factory for a level four operation, of course, software needs to be added, model deployment needs to happen, test and validation needs to happen, But we can offer and support time to market within 12 to 18 months. 12 to 18 months compared to 3 to 4 versus the competition. So a cost advantage as well as a time to market advantage. So besides RoboTaxis, I also would like to talk about our offerings and autonomy for our retail customers. Already in production, as Erwin alluded to earlier, is our hands-free highway driving. That will be added also in Lucid Gravity with a city drive assist by the end of this year. In 2027, we will have hands-free highway and city driving in Lucid Gravity, and it also comes to the brand new Lucid Cosmos. And that is followed by Level 3, ice-off driving in 2028. And last but not least, eyes off, hands off, mind off, highway and city operation by 2029. So I know there was a lot in this video, so let's recap. Very clear roadmap when it comes to the rollout for autonomy features for retail customers. Step one, hands off driving. Check. already in lucid air today coming to lucid gravity in q2 of this year step two now we're expanding that to city driving in 2027 both for lucid gravity as well as for our midsize platform specifically in 2027 on lucid cosmos followed in 2028 by isoft driving on the lucid midsize platform And last but not least, the mind of HyVee and City driving by 2029. Urban talked about our high take rate and the fantastic feedback we have gotten from customers. So let me share with you a couple of the feedback that we received since rolling out our hands-free driving and lane change. So what are customers saying? Those are not my words. Those are feedback we get from the Lucid Owners Forum. we get it from reddit we get it from other platforms fabulous update hence 3da was flawless turns as now as smooth as silk lucid knocked the ball out of the park it's that perfect i drove it with zero issues try the lane change to the far right as the vehicle was going downhill Brutal test. Not my words, that's the owner's words. Brutal test and it handled it like a champ. I have nothing to add to that feedback when it comes to our Dream Drive Pro performance in the real world. Now what I'd also like to share with you this morning is that we're introducing the option to get autonomy levels by subscription. Starting in 2027, we will offer different levels of autonomy once they become available, starting from $69 a month, and that starts with level 2 plus plus or hands-free driving, as we've seen in the prior roadmap slide. $69 to $199, depending on the autonomy level, when the technology becomes available from Lucid Motors. So what have we heard this morning about Lucid's approach to autonomy? What we learned is that through leveraging our core technology foundation, our relentless innovation, and smart partnerships, we're participating strongly in the developing market for autonomy, both for robotaxis as well as personal vehicles. With that approach, we have a right to win. How do we have a right to win? And I want to come back to what Mark shared with you earlier. I give you five reasons how Lucid is going to win an autonomy. Number one, level four ready vehicles straight from the factory. What you see right here in the room, the gravity robotaxi, That comes off the assembly line by the end of this year from Lucid Motors. Sensor integrated, everything integrated, ready to go. Number two, as Zach and Derek and Imad have shared multiple times, we have the best efficient EV platform on the planet. Number three, we're partnering with the best of the best, namely uber nvidia neuro and others number four our approach is responsible from a cost and investment perspective we call it the capital efficient approach and last but not least we're pursuing a dual path to commercialize autonomy both for robotaxis as well as autonomy features for our retail customers. That's what I would like to share about autonomy. But now it is my pleasure to call our CEO, Mark Winnerhoff, back to the stage to share with you some exciting news.

Speaker 5

Thank you. Thank you, Kai, for all of the information and really exemplifying how important autonomy is for us. I actually have a special guest that I would like to ask to the stage now because we have here today Andrew McDonald from Uber, president and COO of our, I would say right now in that space, most important partner. And I'm super excited to have you here for a little bit of a fireside chat asking you about things, how you see the market and other things. Thank you for coming.

Speaker 9

Happy to be here.

Speaker 5

Thank you. So sit down.

Speaker 9

So good to be here. It's such an exciting day.

Speaker 5

Maybe I kick it off with some questions. So, I mean, we just talked a big game about the robotics market, right? How does, Uwe, how are you seeing it? Is it developing now and is it scaling? Or how are you thinking about that?

Speaker 9

I mean, first off, I'd say I think you guys are thinking about it the right way. So I think that was a very compelling narrative. Our, you know, from our perspective, and I think this is sometimes a misconception people have about Uber and what autonomy means for Uber. But we are extremely excited about autonomy. You know, we think we're the largest mobility platform in the world. Autonomy is going to make mobility much safer. It's going to make roads much safer. It's going to ultimately over the long term bring down the cost of transportation and bring a vision that we've frankly talked about for 16 years but haven't yet brought to life, which is true mobility as a service. I think the days of I've got three daughters under the age of five, I don't think any of them are going to get a driver's license. and you can see it in the data today that 16 year olds in the US aren't getting their driver's license like they used to so we're big believers in autonomy it is gonna take some time right I think the edge cases in autonomy still exists you still see it every single day as commercialization starts to happen there are edge cases that need to be ironed out but we think as the largest mobility platform in the world that we can help bring autonomy to life and we're encouraged by the progress progress uh on the software side you know there are multiple l4 players today that have sort of hit this finish line on l4 capable software and are hitting the starting line on commercialization there are vehicle oems platforms emerging such as lucid with the gravity today that are autonomy-ready, that have the necessary levels of redundancy and compute on board and then are able to build in the sensing. That cost needs to come down over time, and we can talk about that. But the OEMs are getting ready, and I think Lucid is the leader amongst the OEMs or one of the leaders amongst the OEMs. And then finally, consumers are ready. I mean, we see it in our data. We have deployments live in the U.S., in Austin, in Atlanta, in Phoenix, in Dallas, and rolling out more and more. And what we're seeing is not only are existing ride-sharing customers choosing autonomy when given the option, it's actually growing the market in cities that we're operating in. And that's exciting.

Speaker 5

Awesome. Awesome. Yeah, I mean, now that we're sitting here together one-on-one in a small setting, nobody's watching, maybe you can share a secret. Why did you choose Lucid for that collaboration?

Speaker 9

That tee-up wasn't in the script. I was wondering where you were going there. Over didn't throw you off. Yeah, no, it's better to keep it real. Look, I think a couple things, and I just heard in Kelly's presentation some of the why, right? We believe in a vision for transportation and a vision for mobility, which is shared, electric, and autonomous. I believe Lucid is going to be one of our premier partners in bringing that vision to life. Why? Well, A, you're ready today. You know, the gravity platform has the necessary redundancy built into the core components, the efficiency, as we just heard a lot about, which is really important when you think about how autonomy is going to commercialize. These vehicles need to be ready for long-range fleets today. there's a lot of wear and tear on rideshare vehicles it's a different it's a different ultimately a different asset experience than a personal vehicle in the sense that you need ultimate durability ultimate efficiency and the ability for long-range and you know 20 plus hours a day of driving and the gravity platforms ready so so one is is just the you you guys are ready today and that that's really exciting for us too and I think this matters there's sort of the right DNA at Lucid. You've been a tech forward OEM from your inception. And with respect to our many other OEM partners around the world, a lot of the automotive industry is trying to adapt and become tech first, become software first, become electric first. But you guys started there, and I think that's really important. So for those two reasons, plus our just shared belief and the vision for where we head, I think Luce is a great partner.

Speaker 5

That's great to hear. Another question that I have. You have a lot of autonomy partners. You have a lot of corporations that you signed. As a matter of fact, you just announced one this morning. Overnight, yes. Overnight on the other side of the world in Japan and also one, I think, yesterday. So how do you see our collaboration compared to others? What is different?

Speaker 9

Yeah, and to start, I think we've been very open about our strategy and our belief in how the market evolves. And we think that every automotive OEM is going to need an autonomy strategy and it's ultimately going to need to produce all four vehicles. There are dozens of software companies around the world building the software capabilities to drive a vehicle autonomously. And our intent is to be an open platform and partner with everyone, and partner with everyone to provide a great experience for consumers, to make the world a safer place, to improve mobility, all these great things about autonomy that we were just talking about. I do think our relationship in the Lucid-Uber and Lucid-Uber-Neuro partnership is particularly unique for a few reasons. One is, I think, the depth of collaboration. you know from my perspective goes deeper than in many cases what are commercial agreements with other players but not the sort of true in the trenches building the platform and approach together i mean you know it as well as i do our teams are together daily working on how's the exterior of this vehicle going to look as we add autonomy sensing capabilities what is the interior your experience look like? How do we optimize that for rideshare passengers, which again is different than personal usage? What does the vehicle controls look like? What does the interface customers are using look like? How does that all blend together seamlessly and really adhere to the standards that Lucid has set? And that's hard work. It takes trust and it takes, actually, I think a deep understanding between organizations, and we're doing that work today. So that's really important the second thing that's unique is this is a three-way partnership right we both have independent partnerships with neuro and we are doing a three-way thing here which can be very complicated right i think in any industry doing sort of multi-party partnerships is complex but we've we've got a a unique opportunity to leverage what each of our companies is best at right lucid leading on our vehicle experience and the vehicle platform, neuro leading on the L4 software, and Uber leading on the platform and network, and go to market for autonomy. I think that's a really compelling group there, and that's unique. And then finally, I'd say we have aligned interests. And in a relationship, that matters. In a partnership, it matters. we have a vision that i think is shared for the future we want to scale volume we want to go big with this we want to go global with this we have management team relationships we have board level relationships we're an investor you know there's just a lot of tight ties that i think means that moving forward together makes a lot more sense than moving forward apart and it's going to be

Speaker 5

great for our customers yeah yeah and i have to actually say our teams work great together i mean I mean, I was also kind of hesitant, OK, there's a lot of cooks in the kitchen when three parties are coming together. But everything that I see and what I also hear from my own teams, it is actually pretty seamless and it's really integrated teams. And that's the only way to make this work.

Speaker 9

It's been fantastic. And I'll tell you, everyone at Uber who works on this project is just a true believer in your product, which I think makes a big deal as well. people want to work on stuff that they're inspired by and i think that's great to hear yeah that's

Speaker 5

awesome okay well so we announced the 20 000 gravities and how do you think this coloration is developing what comes after the gravity yeah i mean it's a great question because i think the

Speaker 9

what we have planned for 2026 is really exciting but we know that's just the foundation for something that's going to be much bigger and is going to change the world uh you know the ride sharing industry right uber was founded in 2009 i've been with the company 14 years the ride sharing has always been a supply-led business right um if uber's had the great fortune of having such great product market fit that if we put more cars on the road we can fill those cars with customers and i think the development here is going to be the same uh we want to get to scale that means we need volume we want to launch more cars in existing markets as we stand them up we want to go to more cities more countries and we want to do so with volume now today lucid offers a premium experience and that's really important and I think it's really important for the early adopters of autonomy in the consumer space to experience that premiumness I think over time though we want to go mass-market right you and to do that you need to bring the prices down, both of the individual consumer rides, but also of the underlying vehicle platform, the compute and operational cost, the sensing kit, all the things that we know goes into the deployment. So we've got to bring the cost down over time to go big on volume. And I'm really excited about the sort of development track of the midsize platform. In fact, I think I'm now authorized to say that we're finalizing an agreement, Uber and in Lucid to do a similar deployment of the Lucid mid-sized platform at similar levels of volume of the Gravity RoboTaxi platform. And I think that's really exciting. It's a great development, and I'm so happy to be here.

Speaker 5

Thank you. Awesome. Yeah, we're working very hard on this to, you know, as you said, you know, you really want to bring down the costs. And, you know, we started together with the gravity, but we all knew this is more for the premium sector and we need to go one step down. We are totally excited about the status, which is almost done. We'll see. Well, now we have to get it done. That's right. Maybe I take over and say a little bit how I see what comes after the midsize. I would love that. Yeah, because we are not stopping with the midsize, as you can imagine. Mid-size as it is today, because what I would like to reveal is that we are working on a dedicated Lucid Robotaxi, which is based on the mid-size platform, but we made a lot of changes to make it even more efficient and more suited for Robotaxi applications. Do you want to see it?

Speaker 9

Who's going to say no to that?

Speaker 5

Why don't you join me? Come over there. Let's do it. Take a look.

Speaker 9

I'm not going to fit in this vehicle, right?

Speaker 5

I hope so. Not that we designed it wrong.

Speaker 9

Oh, it's beautiful.

Speaker 5

I'm introducing here Lunar, our two-seater Robotaxi concept that we have developed. As I said, it's based on the mid-size platform. So again, it has a lot of commonalities. It doesn't mean we can do this tomorrow. And as you can see, it's still a concept. But again, we can implement a two-seater robotaxi in a very, very short period of time. Maybe we can walk by. Maybe if you can take the passenger seat. We actually have to rephrase this in the future, right? There is no passenger, no driver anymore. So you take the right seat, and I take the left seat then. But you see here, purpose-built, very easy to access a luggage compartment. And when we go and sit in the car, I mean, and you are much taller than I am. Let's see whether you fit.

Speaker 9

It's a beautiful vehicle. I'm amazed by the storage space.

Speaker 5

So here in the front, we have also integrated the new white screen where the left passenger and the right passenger in the future can actually interact together. There's also an AI assistant in this, which we have not activated today. But I wanted to point out, well, are you sitting comfortable?

Speaker 9

It's wonderful. More space than I could have imagined. I think the view is beautiful. The screen is beautiful. And from an Uber customer perspective, I think the whole trip changes when you're reorienting the vehicle around this in-car experience.

Speaker 5

And also, what we think is important, that's the way we have designed it, and I know we haven't discussed it with you, but when you see the front here, you can obviously relax like you're doing right now. So you can also, if it's a short trip, quickly take luggage or anything here in the front. You don't even have to open the frunk. Just put it in here. And we also watched very much out to, hey, how easy is it to get in and out? Because that's what we always hear, that in some robo-taxes it's very easy because they're very bulky, but they're not very efficient. And others are differently designed, but it's very, very hard to get in and out. So that's another point. Efficiency. This concept, based on all of our calculations right now, would achieve between 5.5 and 6 miles per kilowatt hours. So it's even a significant step up from what we have done with the midsize, although we're actually using the midsize platform. We're also estimating that the operating cost would be 40% less than what is currently being used as robotaxis. So a drastic change, which, I mean, for you is very important since every cent counts per mile, and 40% is a significant number. And as you just said, we think that having a great entertainment in the vehicle offers a lot of opportunities not only for customer experience, but even additional monetization potential in the vehicle.

Speaker 9

Yeah, I mean, I think, first of all, I feel like I'm sitting in a personal theater with a comfy chair and lots of leg room and the media center in front of me. Second of all, I think our customers are going to love it. So I'm really excited.

Speaker 5

Yeah, very, very interested in working with you guys and driving this further. As I said, we have not yet discussed whether that's exactly the specs that you guys are looking at, but our teams have actually, you know, spent already, in my opinion, way too much time. to develop that concept and drive it to where it is today. And, yeah, so this is our future when it comes to the Lucid Robotaxi. That's fantastic. Well done. Okay. Thanks very much, Mac. It was a great conversation, and thanks for all of the insights, and I hope everybody enjoyed it. Now I'm actually... Oh, it's still running. we might we might be able to to cut that short yeah coming back to yeah the specs here but now I would like actually to invite Taufik Boussaid to the stage our CFO to tell you why you are

Speaker 6

actually here you want to know about the financials so Taufik take it away thank you Mark uh hello welcome everyone so I guess that you've heard about the many obsessions that we've been developing in the company over the years obsession about technology obsession about efficiency I might add some additional obsessions of my own and it's obsession about cost obsession about free cash flow and these are obsessions that we don't want to cure actually that we will keep promoting in the organization and that's probably one of the key things that we're trying to change and which is leading us to believe that the company is going through a significant pivotal time. It's not only on the back of the macro environment, some of the technologies reaching maturity, it's also about the fact that we strongly believe that we're reaching the end of a cycle in the company it's the end of a cycle where we have been investing heavily so some of it refer to you as the cycle of cash burn we prefer to refer to it as the cycle of heavy investment and that's what we've been doing in the company so it's not like we were shoveling dollars in an oven we were taking every dollar and building a manufacturing system bringing our technology to maturity now we're entering into a cycle where it's about time to start harvesting the fruits of this investment. So three things will underpin the pivotal time for the company. It's the scale, the profitability, and the capital discipline. The scale will come on the back of the growth. So we have a very well-defined roadmap to achieve this growth. So we discussed about the mid-size, it's allowing us to tackle dramatically different markets in terms of size. We talked about the additional revenue streams that we have been working on, be it software, ADAS and so forth. These are gold revenue streams as Ervin has referred to them. I also like them a lot because of their low capital intensity. Then profitability. Profitability will come because we have a better mix. We are reaching the scale. We are in a position where we are in a bitter position to absorb the fixed costs that we have been building over the years. This is not something that we did without purpose. It has been done by design because we needed to stabilize our manufacturing system and to be ready to put in production our products, our platforms in the best possible conditions. So this is where we are now. So we will also be obsessed when it comes to profitability to going after every dollar. So we are not going to underspend. We know where our value creation areas are. We will continue investing in that, but we will do it in a smarter way. We will stage gate our investments. We will rationalize our portfolios. We will make sure that the areas where we spend our dollars do generate a demultiplied return for the company. Capital allocation. So, again, we have been investing heavily. We did this investment because we had good reasons to do it. It was by design. Now we're moving to a different type of profile when it comes to the way we will be investing in our company. So with that in mind, we have now defined our objectives for the mid-term and what we refer to as the late decade. So for the mid-term, what we're aiming at in terms of revenue is a high single digit and high teens by the late decade. gross margin positive in the midterm meetings by the late decade and capital allocation in teens as a percentage of revenue for the midterm and single digits by the late decade this is the framework against which we will be operating so now when you look at the roadmap and how we will be executing the plan. We don't look at it as a single learning or single improvement curve. We will have three distinct phases in our trajectory. The first one is right now. That's the very short term and everything is about execution. We want to stabilize our performance and we want to solidify all the things that we have been working on. We want to drive the cost per unit as low as possible and this is this will be the primary focus for us during 2026. With that we are expecting to double the revenue growth, a high double digit revenue growth for 2026 and a significant reduction of our unit economics improvement. Then comes the midterm. Midterm is very important because this is the moment where we will be able to materialize the proof point of the midsize allowing us to drive scale. We will be absorbing a higher portion of the fixed cost that we have been building over the years. We will be leveraging the mix effect that this will do on our top line and we will be moving faster to a higher gross margin generation and also a cash generation. This is also a phase where we will start seeing the effects of the diversification of our top line. We will start introducing new sources, new revenue streams which will allow us to de-risk, to diversify the way we drive our top line. Then, by the late decade, our ambition is to outperform. We strongly believe in the unique value proposition that the technologies that we have been developing over the year will allow us to do in terms of performance. We strongly believe that we will be in a position to outperform in terms of global growth, in terms of autonomous solution scaling, and in terms of advantaged cost base. So that's the plan. Again, it's not a single learning or improvement plan. It's three different building blocks, three different foundations, three different phases, each one building the foundation for the next one. So, now, if we move to 2026 very quickly, so we have already communicated some of the high-level guidance that we have for the year, just reiterating some of the key figures, the delivery is 25,000 to 27,000 units, a capex of 1.2 to 1.4 billion dollars. Again, it's a year where we need to further scale the lucid gravity. That will be the key focus. We have seen a very good level of performance for Q4 when it comes to the production. We were able to hit 2.1 or 2,100 units a month during Q4. A very strong proof point of our ability to scale the production. and that's something that we will continue doing. The expansion, international expansion, that's also something that will kick off actively in 2026. 35 new locations will be open during the year. It's something which is absolutely key for us to further expand our top line. The obsession on cost and the obsession on driving, the unique cost improvement, not only through the BOM, but also through all the work, through all the work that we've been doing in terms of engineering, simplification, rationalization. This is also a very important lever that we will be activating and also the efforts in terms of cash preservation and extending our cash runaway as far as possible. Then comes the mid-term and how we will be expanding our top line. So the graph basically shows two key data points. The first one is that for the midterm, in the next couple of years, the majority of our growth will come from the core business. So it will mainly rely on the air, the gravity, and the midsize starting in 2027 and most importantly in 2028. So altogether, these three platforms by 2028 will allow us to reach an overall production of 100,000 units per year over the period. The second important information is the change in the mix. So the gravity will keep scaling up over the next couple of years. Then in 2028, you will see significant contribution from the mid-size in terms of revenue generation. On top of that, 2028, this is the year where we will start seeing a meaningful impact on the top line from the additional revenue streams that we've been discussing. That's the ADAS autonomy, the business, the B2B partnership, and so forth that we've been discussing about. So again many things will happen. The underlying message is that we don't want to rely on one source of revenue generation. We want to diversify and de-risk this revenue generation leveraging the global scale, leveraging and offsetting some of the cyclical effects that we might have from one region to the other and also diversifying the sources of revenues and very short in a very short period of time during the next couple of years that's for the top line now if we move to the cost that's also an area where we will be absolutely relentless in terms of effort we want to be able to deliver a cost saving per unit of 50 to 60 percent overall for the company that's something that we're absolutely confident we will be able to deliver we have proof points it's something that we are not going to start it's something that we've been working already on for so many so many quarters now it's really a matter of of accelerating so the way we will do it obviously we will go after every dollar that we can find in the bill of material that's something that we do well we're very happy and Mark has touched on that we have already sourced a significant portion of the midsize bill of material in a way that makes us quite satisfied and very happy about the performance we We will continue doing that and we will leverage this success to also impact the bill of material of lucid air and lucid gravity. Then, Imad and Zak have explained what we're doing in terms of radical efficiency. This is something which has also a direct impact in the way it's driving cost. They have elaborated on that. But they will discuss and explain this much better than what I will ever be able to do. But this efficiency, the simplification, the rationalization has a direct impact on the way we're driving cost overall for our business. Then there is the mix effect on resulting from mid-size. This is something that will contribute to the overall 50 to 60 percent. And we will continue targeting ad hoc opportunities, going after every pocket of optimization that we might have in the organization. So that's when it comes to the cost. So now, if we bring this together, what does it mean in terms of our journey towards the break-even? So we have a direction which is relying on several levers. We are not counting only on scale to make the break-even happen. We have a multi-leg approach. So obviously the overhead absorption because of the installed fixed base and the fact that we will be bringing volume to absorb this fixed-cost absorption will have a significant impact overall in the trajectory. The bill of material coming from the scale and the new volumes that we will have going forward will also have a significant impact on top of the manufacturing improvements, productivity, stabilization of our manufacturing system, plus the golden revenues that we all like in the company that will also start kicking in and having a significant impact on our P&L in the next couple of years. So again, it's not something that will happen in the future. many of these levers are already happening we're tracking them through different metrics it's something that we really want to make sure that we capture as fast as possible we have specific KPIs just disclosing and showing you some of the things that that we're looking at obviously that our ability to scale the production is a very important one the extensions of the partnerships that we have just discussed about with the between uber noodle and ourselves is also a significant contributor. The start of production by the end of the year for mid-size, a significant proof point on our ability to deliver on this trajectory for the margin and obviously everything we're doing around autonomy. So now with that in mind so we discussed about gross margin that's part of the equation there's the below the line additional cost that sits in the OPEX that also something that we will be tackling in a very bullish way. We will have a phase of transition so R&D again it's something that we will continue investing on. We will constrain it at 10% of the revenue in the midterm. Same goes for SG&A with additional opportunities to improve it. I will explain later on what the profile will look like by the end of the decade but we are already taking the actions that will allow us to bring the OPEX at the level of the benchmark that we see with some of our competitors. So that's for the P&L, if we spend one minute on the balance sheet and the CAPEX. So we have been spending a significant amount of dollars for the CAPEX over the years. That was done by design. We needed to implement and to establish our manufacturing system. This is now done, virtually done. By the end of the year, it will be done. And the best proof point is how the overall spent in CapEx will shrink dramatically over the years. It doesn't mean that we will be underspending. It means simply that we're moving to a new model where we spend more efficiently and our CapEx profile is more about maintenance CapEx rather than adding up capacity. So obviously, we will retain some flexibility and we'll adjust based on the market development. But for the moment, we're aiming for a very prudent approach and a very prudent CapEx projection for the coming years. Now, the diversified revenue mix. So I already touched on the additional revenue streams, but I think that it's also important to translate into a figure some of the things that Irvin has explained earlier this morning around our expansion in Europe, Europe and the rest of the world, actually. This is really something which is important for us. So we see the potential to deliver, by the late decade, around $5 billion of additional revenue coming from these regions. But on top of the incremental revenue that this delivers or these new regions will be delivering, what is important is what it does in terms of de-risking our profiles. We will not be relying only on one region. The cycles are very different from one region to the other. And this diversification will allow us basically to counter some of the negative cycle developments that we might have between regions. So it's something which is very important to us. The second aspect on top of what we're doing in terms of diversification of the revenue is to change our model to a more efficient model. And the best indicator to measure the change towards this more efficient model is how we're spending in the different categories of spend that we have in the company, be it in R&D, SG&A and CapEx. So these figures that we have in our plan actually are the best benchmark that you can compare us to. And that's something that we will be delivering on. We are not going to wait at the end of the decade to implement that. This is something that we are already working on and we know how we will be generating that. It will not be only on the back of constraining costs. It will be on the back of all the structural changes in our operating model. so i guess that once we establish all that i think the question is how are we going to leverage all that to come to break even free cash flow again we are obsessed by free cash flow i have my treasurer right in front of me looking at the table once again so it's something which is at the part of what we're doing every day. It's something which is at the focus. We are now in a stage where we're doing a design for cost. And we're doing a design for cost for midsize specifically because we want to accelerate our path and our journey towards the neutral free cash flow. It's absolutely important for us. So we're very proud about the products and the technologies that we're delivering but as I like saying great products don't make great companies we want to become a great company and the only way to assess what the great company is is in its ability to generate cash and this is what will represent a great success for the company once it's achieved so our journey is very simple it starts already this year at the end of this year once we have completed the significant investment the investment that we have in capex of 1.2 to 1.4 billion that we have already announced in our guidance we will leverage the scale the air and the gravity are not dormant platforms gravity yes we have might have reached sorry the air we might have reached the full potential of what it can do in its segment gravity is still growing and it's a great product and we want to leverage the scale on this on this product then mid-size comes next year it will accelerate this journey towards the cash generation we will have non-new vehicle revenue work streams which will also contribute to this overall cash cash performance we will significantly reduce the capex because we will be shifting to a maintenance capex mode and then by the late decade we're expecting a positive cash generation for for the company so translating this into something that we really have at heart, which is how do we deliver shareholder return. Again, we are not only here to do great products. We want these great products to generate money and to generate shareholder returns. We have four building blocks. I already touched on them. It's about the growth, but not only the growth. It's growth at scale. It's about the profitability with the targets that I have already mentioned. It's about the cash conversion and how we accelerate the journey towards the cash positive and the capital allocation, the disciplined capital allocation policy that we want to do. So the vectors of our trajectory in terms of performance are very clear. So it's also three different steps. It's in terms of business and offering from the company. It's around the core business, which is the OEM, the automotive OEM. software and services and autonomy unfortunately but I hope that things will change today every time we were asked question about what are our upsides what are our the profile of our revenues everything was about cars we're very proud very happy to make us but we are also a technology company and we want to monetize this aspect of our company we were a little bit too humble about that I hope that now we're conveying a different message on our ability to drive the technology aspect of our company and to monetize this this technology aspect this is really something that we will be doing we like this revenue because it's recurring because it comes with the lower capex intensity because it comes with higher margins and this is something that we will be doubling on going forward so that's the plan that's how we will be expanding having said that we're very confident about the upside we're very confident about the plan but we're also realistic so we know that there are things that can go wrong so and that's the reason why on top of accelerating and having deliberate actions to drive the performance we're also spending a lot of time to understand all the potential derailers and how we can mitigate them this is a significant component of what we do on a day-to-day basis as a management team in the company so when it comes to the ev we know that the global demand for ev and autonomy can shift we are in a cycle the cycle is still uncertain it can change differ depending on how macro environment evolves but we do believe that the diversification in terms of revenue streams and also the diversification in terms of manufacturing footprint is a significant mitigating factor to this potential fluctuation. We know that competition is active. I mean, we hear about China. We hear about how fast they're going in EV and developing their technology. We know that. But we are also confident on our ability to counter this risk because we're confident on the value that our technology brings. And we're confident that the fact that we will continue investing will allow us to keep an edge versus this competition and keep this competition at bay in the future. We're still dependent quite a lot on the policy and regulatory changes. That's something that we're also closely monitoring with our own limited means. We try to influence where we can influence by explaining things and by driving a different perception on some of the things related to our sector. We're also perfectly aware that capital availability might become scarce. We're looking at interest rates on a daily basis. We know that it's something which can also make many businesses derail. That's why we're also diversifying our revenue streams with less capex intensity through less capex intensity opportunities. So that's for some of the key risks. Obviously, there are many risks on top of that that we're monitoring, but we have also a lot of upside and we have additional opportunities. So among them, we know that the tariff environment is a very fluid environment. Things might shift, and this might have a significant impact on our bill of material, on our revenue streams as well. The robotaxis scaling is also following a maturity curve. This maturity curve might go faster than what it is today, and this will generate additional opportunities for us. We will be also capitalizing upon some of the market dynamics and we have touched on some of them with some of the U.S. leading competitors withdrawing or stopping the production of some of the two platforms that they have. this is a great opportunity for us and Ervin has provided some of the metrics associated with this opportunity plus all the additional aspects related to battery cost reduction and regulatory environment which can also generate significant upside to our business. So with that in mind I think that it's probably important to summarize the key building blocks on which relies the lucid investment thesis i think that it really focuses or relies on four key building blocks the first one is our technology i think that we spoke enough about that we spoke about how proud and obsessed we are about our technology we explained how we some of the things with the wing is giving us up to five years advancement compared to the nearest competition and that's something that we will continue pushing. So it's something which has a value and it's something that we are going to monetize in a more active way. We also have, and we've been doing this for the last few years, world-class infrastructure and manufacturing systems. So we want to get the best from this manufacturing system. We didn't invest and went through the pain of investing all these billions in this manufacturing system if we were not sure on our ability to extract value out of it. And this is the phase and the moment where we will start getting value from this investment. We have front-loaded the investment. We will be moving to another profile of capital expense going forward and it's really the right moment to capitalize on the value creation on the company. We have also a capital efficient approach in terms of driving top lines. We have already elaborated on that. So the combination of all this makes our case truly compelling. So now there's a question of timing. So some might say, okay, we need to wait until we see proof points about all that happening. This might be too late. I think that these proof points are happening already now. And it happens already now because we have great products already in our portfolio. We have the Lucid Gravity, which again is by all measurable means one of the best SUV and not EV SUV available out there. So we're very proud about the potential of this product and the potential that it can generate for the company. The mid-sized dam is huge, so some of you will have the opportunity to have a sneak preview at the car, which is located just over there. So I guess that you will really feel the excitement that we all feel in the company once you see it. So it's really an inflection point that we're going to, and this inflection point is right now. So I guess that I have summarized most of the key points. We will obviously be discussing with many of you during the next coming weeks to further elaborate on some of these key messages. So for the moment, I think, Mark, I think it's time for me to hand back the stage to you. Thank you, Taufik.

Speaker 5

Thank you, Taufik. Yeah, now I have actually the difficult task to summarize it again in a broader way than you just did because I think you already summarized everything very well to the point. And I hope that everybody who is here today in New York and also online got out of it the information that you need. And as Taufik said, we are very happy to go into further elaborations, discussions. And as you probably can tell, our whole team likes to talk about those things in detail. and forever. So there's no shortage of insights that we are willing to share. So I would just like to go back to where I started. In the very beginning, I said, okay, these are the things we are talking about. These are the things that we want you to take away at the end of the day. And I hope we made clear that we have a clear vision to be a leader in the mobility technology space. At the same time, we not already have great products right now with the air and gravity, but we also have a clear plan how to grow it and to add additional revenues on top of that, both with new software revenues but also through expansion. Taufik just said that air may reach a plateau, which is correct in the United States because because we were actually very high with our market share already, but now we're actually...