Earnings call transcript: Lucid Group’s Q2 2025 earnings miss forecasts

Lucid Group reported its Q2 2025 earnings, revealing an earnings per share (EPS) of -0.24, falling short of the forecasted -0.22. Revenue reached $259.4 million, missing expectations of $283.19 million by 8.4%. Despite these misses, the company’s stock saw a modest increase of 2.49% in the aftermarket session, closing at $2.47. According to InvestingPro data, Lucid maintains a market capitalization of $7.48 billion and shows relatively moderate market sensitivity with a beta of 0.8. The stock currently trades below its InvestingPro Fair Value, suggesting potential upside opportunity.

Key Takeaways

• Lucid’s revenue grew 29% year-over-year, with vehicle production up 83%.
• The company reported a negative gross margin of 105%, affected by tariffs.
• Partnerships and innovations, such as with Uber for robotaxis, were highlighted.
• Adjusted EBITDA showed a loss of $632 million, a 12% decrease from previous quarters.
• Stock price rose 2.49% in aftermarket trading despite earnings misses.

Company Performance

Lucid Group demonstrated significant operational growth with a 29% increase in revenue and an 83% rise in vehicle production compared to the previous year. However, the company continues to face financial challenges, evidenced by a negative gross margin and substantial adjusted EBITDA losses. These results are set against the backdrop of a temporarily slowing EV market.

Financial Highlights

• Revenue: $259 million, 29% increase YoY
• Vehicle Production: 3,863 units, 83% increase YoY
• Vehicle Deliveries: 3,309 units, 38% increase YoY
• Gross Margin: Negative 105%, impacted by tariffs
• Adjusted EBITDA: Negative $632 million, 12% decrease

Earnings vs. Forecast

Lucid Group’s Q2 2025 EPS was -0.24, missing the forecast of -0.22 by 9.09%. Revenue of $259.4 million fell short of the $283.19 million forecast, marking an 8.4% miss. This discrepancy highlights ongoing operational and market challenges.

Market Reaction

Despite missing earnings forecasts, Lucid’s stock rose by 2.49% to $2.47 in aftermarket trading. This movement suggests cautious optimism among investors, possibly driven by strategic partnerships and product innovations.

Outlook & Guidance

Lucid has updated its annual production guidance to 18,000-20,000 vehicles and revised its CapEx guidance to $1.1-$1.2 billion. The company plans to start midsize platform production in late 2026, aiming to ramp up deliveries through 2027.

Executive Commentary

Interim CEO Mark Winterhof emphasized, "We are not simply building electrical vehicles. We are pushing the boundaries of what EVs can be." CFO Tawfiq Boussaid added, "At Lucid, we are committed to building a great company, not just a great product."

Risks and Challenges

• Supply chain issues, particularly with magnets, could impact production.
• Negative gross margin and significant EBITDA losses present financial risks.
• The macroeconomic environment and EV market slowdown pose additional challenges.

Q&A

Analysts inquired about midsize ASP expectations and supply chain challenges. Lucid confirmed no changes to ASP expectations and addressed ongoing licensing agreement discussions.

Full transcript - Lucid Group Inc (LCID) Q2 2025:

Conference Operator: Ladies and gentlemen, thank you for standing by, and welcome to the Lucid Group Second Quarter twenty twenty five Earnings Conference Call. Please be advised that today’s conference is being recorded. Later, we will conduct a question and answer session. I would now like to turn the conference over to your speaker for today, Nick Twerk, Vice President of Communications. Please go ahead.

Nick Twerk, Vice President of Communications, Lucid Group: Thank you, and welcome to Lucid Group’s second quarter twenty twenty five earnings call. Joining me today are Mark Winterhof, our Interim CEO and Tawfiq Boussaid, our CFO. Before handing the call over to Mark, let me remind you that some of the statements on this call include forward looking statements under federal securities law. These include, without limitation, statements regarding the future financial performance of the company, production and delivery volumes, vehicles and products, studios and service networks, financial and operating outlook and guidance, macroeconomic, policy and industry trends, tariffs and trade policy, company initiatives and other future events. These statements are based on various assumptions, whether or not identified in this communication, and on the predications and expectations of our management as of today.

Actual events or results are difficult or impossible to predict and may differ due to a number of risks and uncertainties. We refer you to the cautionary language and the risk factors in our annual report on Form 10 ks for the year ended 12/31/2024. Subsequent quarterly reports on Form 10 Q, current reports on Form eight ks and other SEC filings and the forward looking statements on Page two of our quarterly earnings presentation available on the Investor Relations section of our website at ir.lucidmotors.com. We undertake no obligation to revise or update publicly any forward looking statement for any reason, except as required by law. In addition, management will make reference to non GAAP financial measures during this call.

A discussion of why we use non GAAP financial measures and information regarding reconciliation of our GAAP versus non GAAP results is available in our earnings press release issued earlier this afternoon as well as in the earnings presentation. With that, I’d like to turn the call over to Lucid’s Interim CEO, Mark Winterhoff. Mark, please go ahead.

Mark Winterhof, Interim CEO, Lucid Group: Thank you, Nick, and thank you everyone for joining us in our second quarter twenty twenty five earnings call. I’d like to begin by expressing my sincere appreciation to our employees, customers, partners and shareholders. Your continued belief in our mission is what drives us forward every day. In the 2025, we achieved meaningful progress on both operational and strategic fronts. We delivered 3,309 vehicles, up 38% year over year, now a sixth consecutive quarter of record deliveries.

We produced 3,863 vehicles, up 83% year over year. As expected, ASP increased sequentially this quarter due to improved mix. However, gross margin was negatively impacted by tariffs as Tafiq will detail in his remarks. First, we’ve been sharing with you that we are in active discussions about partnerships beyond selling or licensing our industry leading EV technology. On July 17, we took a big step in this direction with the announcement of a partnership with Uber in Euro on a next generation premium robotaxi created specifically for the use on Uber’s ride hailing platform.

This partnership combines the industry leading software defined vehicle architecture of the Lucid Gravity, the scalability and proven capability of the Neurodriver Level four autonomy system and Uber’s vast global network and dynamic fleet management, delivering a fully integrated robotaxi experience developed for comfort, safety and scale. Our industry leading efficiency and technology like our AV capable sensor suite, redundant steering and braking systems, and highly efficient compact and high power density motors help maximize uptime and reduce operating cost per mile. Key success factors in a successful robotaxi program. The Lucid Gravity software defined architecture makes it the ideal platform for third party autonomy stacks. As part of the agreement, Uber will invest $300,000,000 in Lucid, subject to regulatory review.

Uber plans to deploy a minimum of 20,000 Lucid Gravity vehicles equipped with the NeuroDriver over six years in dozens of markets around the world, with the first vehicles launching late next year. This is an important step for Lucid into the multi trillion dollar robotaxi market, but it’s only the first step. And while we are working with external partners on this initiative, we continue developing our internal ADAS and AD capabilities, such as our recently announced hands free driving software update, with more improvements to be announced. We’re also leveraging our partnership with the King Abdullah of University of Science and Technology or KAUST to train our AI models for ADAS and AD and bring cutting edge innovation from the lab to the road. I’ve been clear about our intention to monetize Lucid’s technology through licensing deals or strategic partnerships.

And this announcement signals our right to win in new markets. Uber’s investment in Lucid is yet another example of a third party validating our highly advanced technical platform and we remain in active discussions with other potential partners. Second, we follow through on our commitment to drive awareness for our products and the Lucid brand last week when we announced Timothee Chalamet as Lucid’s first ever global brand ambassador. Chalamet will be featured in a new campaign promoting Lucid Gravity that marks another significant milestone in our commitment to raise brand awareness. This first campaign of the partnership will launch in early September.

In addition to stimulating near term demand, this multi year partnership with Timothy is designed to anchor the Lucid brand in popular culture ahead of our entry into the mass market with our midsize vehicles. Now, let me take a moment to go in-depth to explain how these initiatives fit into our mission to not just deliver the best car in the world, but also the best business. Since we started our respective roles, Tufic and I have dedicated time to aligning our priorities for the business. We are laser focused on three important near term priorities for Lucid. These are: first, operational discipline second, building a distinctive scalable brand and third, maintaining and enhancing a sustainable edge through our technology.

Operational discipline relates to manufacturing, cost control, and practically every element of the business. As we communicated in our press release, our target is to produce 18,000 to 20,000 total vehicles in 2025 and as of the second quarter, we have produced just over 6,000. On this topic, I feel that it is important to acknowledge that we are not where we want to be with lucid gravity production relative to our target at this point in the year. However, our team has been working very hard all year to address bottlenecks in our supply chain and improve manufacturing efficiency. I’m happy to say that we have overcome most of these issues and are beginning to ramp up lucid gravity production.

We believe we will significantly increase production in the second half of the year. The challenges we faced were multifold, but can primarily be attributed to first, the capacity of certain suppliers in our supply chain, and second, the availability of magnets originating in China, an industry wide challenge. To the first point, we’ve been working closely with our suppliers to alleviate issues that could prevent us from producing the necessary volume to achieve our targets in the second half of the year. We’ve also implemented key initiatives that are focused on fostering enhanced accountability and data driven decision making. We are already seeing the benefits of this as we work diligently to improve lucid gravity production.

Turning to the second point, to mitigate geopolitical supply chain challenges, our team was able to quickly integrate substitute magnets in production and because of our nimble in house vertical integration, this process took weeks instead of months. Software changes, manufacturing changes, and software hardware integration all work together to make this happen. Without our vertical integration and ability for our team to make quick changes, we would have stopped production in Q2. I’m happy to say that we believe this issue is behind us and we have secured enough magnets to meet our production target for the remainder of the year. As we have noted before, we have a strong commitment to our U.

S.-based manufacturing. We believe this will make us more resilient and help mitigate the impact of tariffs and other geopolitical issues. In that regard, I wanted to highlight a couple of recent announcements that further support our position. First, in June, we announced a preliminary agreement with GraphiteOne to source natural and synthetic graphite domestically, beginning in 2028. This agreement complements our existing non binding supply agreement with Graphite-one that was signed in April 2024.

Following this announcement, we helped establish the Minerals for National Automotive Competitiveness Collaboration or MINAK, a partnership among U. S. Critical minerals producers that are focused on supporting US based manufacturing and sourcing. We view these as necessary corrective steps to help insulate our supply chain from global volatility. We also recently celebrated the opening of Panasonic’s U.

S. Factory in DeSoto, Kansas. Panasonic is one of our key suppliers and the presence of this U. S. Factory will strengthen our domestic supply chain starting in 2026.

Our next priority is to amplify demand through brand, marketing and partnership initiatives. Our team’s hard work in this regard has been on display through recent announcements over the past few weeks that I’ve already discussed. I’m pleased with the progress we are making to enhance our brand, but this work is only the beginning. As I mentioned earlier in my remarks, in September we plan to launch a new Gravity brand campaign featuring Timothee Chalamet as part of our broader partnership. To further deepen brand affinity and trust, we are expanding our efforts beyond traditional advertising.

This includes new brand ambassador partnerships with world class athletes, influential cultural voices, and globally recognized creators who share our vision and values. We are also developing strategic collaborations with brands and organizations at the forefront of sports and culture. These partnerships will allow us to tap in new communities and strengthen emotional connection consumers have with our brand. Regarding the scalability of our brand, many new customers are now experiencing lucid gravity in our studios and we’re seeing a high order conversion rate for prospective customers once they experience the vehicle. In fact, our daily order rate has nearly doubled since display and test drive vehicles have been widely delivered to studios.

Our final priority is to maintain and enhance our competitive edge through our technology. Engineering and technological excellence have long defined Lucid’s brand and we remain committed to these tenets as we grow the business. Just a few days ago, we deployed a software update to our DreamDrive Pro advanced driver assist system. This update enables hands free driving and lane changes and is also expected to be released for Lucid Gravity later this year. Recently, we also began production of the 2026 Lucid Air, which features a new battery pack for Touring models that extends the models EPA rated range to four thirty one miles compared to four zero six in the previous model year.

Notably, all 2026 Lucid Air models now utilize the same AC compressor as the Lucid Gravity, marking the beginning of further efforts aimed at part communization across our vehicle lines. The Lucid Air Grand Touring demonstrates its range leadership recently by garnering the Guinness World Record of the longest journey by an electrical vehicle on a single charge. Additionally, Car and Driver named the Lucid Air Sapphire the quickest car they’ve ever tested, top lane the Porsche Taycan Turbo GT Weissach. The Air Sapphire set a zero to 60 time of one point nine seconds and completed the quarter mile in nine point one seconds. In Jason Kamesa’s ultimate drug race on Hagate, the Lucid Gravity three Medition with dual motors completed the quarter mile in ten point five seconds, matching the quad motor Rivian R1S.

But where the Lucid Gravity truly stood out was an acceleration beyond 60 miles per hour, showcasing the superior passing power and highway merging confidence that define Lucid performance. The same Lucid Gravity Dream Edition can also reach 150 miles per hour faster than a Corvette Z06 according to current driver. At the beginning of my remarks, I highlighted our recent partnership with Uber and Neuro, which showcases and validates that the advanced capabilities of lucid gravity provide an ideal platform on which to integrate AD technology. Looking ahead, our mid sized platform vehicles will play a crucial role in maintaining Lucid’s competitive edge in technology. These vehicles have been meticulously designed to achieve leading product features and specifications with low cost, enabling us to position our company for significant market expansion.

By adopting this approach, we aim to strike a balance between cost competitiveness and high volume production, while still preserving the premium attributes that our customers have come to expect from Lucid. Technology leadership is the key enabler for this previously opposing combination. A prime example of this approach is our Atlas drive unit, which serves as a cornerstone of our higher volume and cost efficiency strategy. We are committed our powertrain efficiency leadership, while simultaneously achieving lower costs and maintaining exceptional performance. Lastly, as you may know, the Lucid Gravity was the first non Tesla vehicle sold to offer a built in NEX connector and supports native Tesla Supercharger network access.

We have also recently opened this access for Lucid Air owners as well. As of July 31, Lucid Air owners with an approved adapter in North America can now charge their vehicles at any one of the 23,500 plus Tesla Supercharger locations throughout the country. With access integrated into the Lucid app. This is in addition to more than 30,000 CCS chargers already available across North America to Lucid drivers. In closing, we are not simply building electrical vehicles.

We are pushing the boundaries of what EVs can be. From the record breaking performance and efficiency of the Lucid Air, to the game changing Lucid Gravity to our upcoming midsize platform, our technology continues to redefine what’s possible. While our mission isn’t only to make the best EVs in the world, it’s to build a great business around them. That means continuing to drive innovation while also scaling intelligently, building a robust supply chain and making strategic decisions that position us for long term success. We’re entering a pivotal new phase, one where world class engineering meets world class execution.

And with the talent, focus, and drive across our team, I truly believe we’re just getting started. Thank you for your continued belief in Lucid, not just as a car company, but as a company shaping the future of mobility and American manufacturing.

Tawfiq Boussaid, CFO, Lucid Group: Thank you, Marc, and thank you to those who are joining us today. I’d like to build on Marc’s comment by sharing more details about our operational and financial performance this quarter. I will also provide clarity on the strategic steps we’re taking to position Lucid for the long term success. In the last few months, focus has been on execution, turning strategic commitments into measurable progress across production, cost discipline, and financial resilience. We have also taken meaningful steps to strengthen our capital structure and accelerate monetization of our technology.

One of our most significant recent developments was our agreement with Uber and Euro, which represents far more than a commercial transaction. It is a strategic alignment with two leading players in mobility and autonomy, who choose Lucid Gravity as the core platform for the next generation robotaxi. Uber’s planned $300,000,000 investment in Lucid, subject to regulatory approval, will directly support the development and integration of this program. It reflects external confidence in our underlying architecture and is a validation of the broader platform opportunity we see beyond direct to consumer sales. It also confirms our ability to create scalable enterprise value by deploying our technology in new verticals, fleet, autonomy, and AI mobility.

In parallel, we announced our intention to implement a one for 10 reverse fat split. This is not a cosmetic action. It is a deliberate and targeted measure to ensure Lucid’s equity remains accessible to broader universe of long only institutional investors. It also aligns our share price with the strategic trajectory of the company as we move into the next chapter of scaling our operations and deepening our capital markets engagement. The reverse split is expected to take effect in early September, subject to shareholder approval.

Turning now to the numbers. We have delivered $259,000,000 in revenue in Q2, marking a 29% increase year over year. We produced 3,863 vehicles and deliveries reached 3,309 units, up 38% compared to the same quarter last year. This marks our sixth consecutive quarter of record deliveries. Despite ongoing challenges facing the AAV sector, particularly in supply chain, we maintained positive momentum and continued progressing towards our volume targets.

Given the continuously shifting market environment, we have decided to provide our production guidance as a range. Gross margin for the quarter was negative 105%, reflecting a $54,000,000 impact from tariffs alone. This impact accounted for a 21 percentage point decrease in gross margin, offsetting the benefits from sequential improvements in ASP. While we anticipated this pressure, we’re actively taking decisive actions to move margins back towards a positive trajectory. These actions include material cost optimization, improving production efficiency, and tighter inventory management.

We also saw continued cost discipline across the organization, while maintaining targeted investments in products and brands. R and D totaled $274,000,000 for the quarter, reflecting higher spend on the mid sized platform and Atlas Powertrain. SG and A was two fifty seven million dollars a sequential increase as spent normalized following the one time reversal of previously recognized stock based compensation expense in the first quarter. Importantly, we are continuing to make deliberate trade offs across the business, investing where it matters and streamlining where appropriate. Adjusted EBITDA was negative six thirty two million dollars down 12%, driven mainly by gross margin pressure.

We ended the quarter with $3,600,000,000 in cash and investments and total liquidity of $4,860,000,000 Our financial position remained strong, providing us the runway to fund operations and execute our long term plans. CapEx totaled $183,000,000 consistent with our guidance and inventory rose to $730,000,000 reflecting Lucid Gravity production build and preparations for ramp up. Looking forward, we are navigating an environment that remains volatile and uneven. We flagged earlier this year the potential impact of tariff related margin headwinds in the range of 8% to 15%. Based on what we know today, and the mitigations we have already activated, including the localized sourcing, engineering substitutions, and vertical integration, we now believe the actual impact will fall at the lower end of that range.

We are also continuing to manage exposure to magnet supply risk through a combination of supplier diversification and in house reengineering. The lessons learned during the Lucid Gravity ramp are informing our decisions as we prepare for the start of mid size production in late twenty twenty six. On the policy front, most of you are aware of the $7,500 EV Lease credit will be eliminated beginning in Q4 of this year. We have defined countermeasures that will be implemented in Q3 to address this change. This next phase of our strategy will require us to scale with precision.

The mid sized platform represents a critical opportunity to expand Lucid’s addressable market, enhance manufacturing leverage, and offer a broader value proposition to customers without compromising on performance and efficiency. We are applying everything we’ve learned from the Lucid Gravity to ensure this program comes to market with greater agility, lower unit cost and shorter lead times. Lastly, we are updating our annual production guidance to a range of 18,000 to 20,000 vehicles. Going forward, we will provide production guidance as a range to reflect the potential impact of continuously changing market environment and external factors. We are refining our 2025 CapEx guidance to a range of $1,100,000,000 to $1,200,000,000 This adjustment reflects a more focused investment approach, prioritizing critical programs with the highest near term return and long term strategic value and deprioritizing lower return investments.

We remain committed to finding future growth and all other operational and strategic targets remain unchanged. Let me close with this. At Lucid, we are committed to building a great company, not just a great product. That means scaling responsibly, investing wisely, and staying laser focused on the fundamentals, quality, cost, and capital discipline. We are operating in one of the most dynamic and competitive industries of our time.

What will distinguish the winners from the rest is not ambition alone, but execution, and execution is what we are committed to. Thank you for your continued belief in our mission, and with that, I turn it back to Nick to open the line for questions.

Mark Winterhof, Interim CEO, Lucid Group: Thanks, Tafiq. We’ll now start

Nick Twerk, Vice President of Communications, Lucid Group: the Q and A portion of the call. Before we take questions from those on the phone, I want to post the questions that our retail investors sent in through the SAIT technology platform. The first question comes from Sean B. How many current gravity orders are there?

Mark Winterhof, Interim CEO, Lucid Group: We don’t disclose the specific number of orders we’ve received. However, as I referenced in my prepared remarks, customers are now experiencing lucid gravity in our studios and we are seeing a high conversion rate once people see the vehicle for themselves. We are happy with what we’re seeing and we remain supply constrained and not demand constrained. We expect the situation will normalize soon.

Nick Twerk, Vice President of Communications, Lucid Group: Our second question comes from Paul C. Is the mid sized platform still on target for production in late twenty twenty six? Are deliveries expected to start in 2026 or 2027? And did the acquisition of the Nikola facilities allow midsize to be brought forward at all?

Mark Winterhof, Interim CEO, Lucid Group: The midsize is still scheduled for start of production in late twenty twenty six and we are planning to unveil the vehicle next year. Given that production starts in late twenty twenty six, we expect deliveries to ramp up throughout 2027. Regarding the nuclear facilities, while the facilities we acquired bring it added capabilities, they will not impact the timeline of our midsize vehicles.

Nick Twerk, Vice President of Communications, Lucid Group: Our third question comes from Adrian D. How will the partnership with Uber aid in company growth, and how big of an impact do you expect it to have?

Mark Winterhof, Interim CEO, Lucid Group: The strategic partnership with Uber and Neuro is our entry into a large and very attractive market. As far as impact, partnering with companies like Uber and Neuro is another data point that validates Lucid’s highly scalable platform and signals our right to win in new markets as we continue to pursue additional partnerships. This is the start of our path to extend our innovation technology leadership into this multi trillion dollar market.

Nick Twerk, Vice President of Communications, Lucid Group: Now we’d like to take questions from the phone lines. Operator?

Conference Operator: Thank you. And our first question will come from the line of Andres Sheppard with Cantor Fitzgerald. Your line is open.

Andres Sheppard, Analyst, Cantor Fitzgerald: Hey, everyone. Good afternoon, thank you so much for taking our questions. Congratulations on the quarter. Hey, just a quick question Just given the macro environment, should we be expecting any changes to the midsize initial ASPs as they ramp up?

Thanks.

Mark Winterhof, Interim CEO, Lucid Group: Midsize ASPs ramp up, think that is still some time out. Are you referring to gravity?

Andres Sheppard, Analyst, Cantor Fitzgerald: No, just on the midsize. I know we haven’t we’re not there yet, but just curious if, you know, as the macro worsens, if you’re expecting any changes to initial ASPs once it’s available.

Mark Winterhof, Interim CEO, Lucid Group: No. No, I mean, there’s no plan and no expectation that the ASP of the midsize will impacted. As a matter of fact, I mean, we have the current situation, I personally, and we as a company, see this also as a temporary phase, where we had a big hype on EVs a couple of years ago, and now there’s more a slowdown, but, you know, we are fully convinced that EVs is the way forward, and, you know, this will normalize over the next years.

Andres Sheppard, Analyst, Cantor Fitzgerald: Got it. That’s very helpful. Thank you. And just as a follow-up, maybe for Tafiq, can you just remind us the plans regarding the 2026 convertible that’s coming up? Like, remind us how you’re planning on addressing, I think, the remaining 900 or so million that’s left.

Thanks.

Tawfiq Boussaid, CFO, Lucid Group: Yeah. Hi, Andres. So, I mean,

Tawfiq Boussaid, CFO, Lucid Group: the plan is still I

Tawfiq Boussaid, CFO, Lucid Group: think we we touched quickly on it last time we spoke. I mean, the plan is still to go to the market in the next coming quarters. So, I mean, there’s no change to that. So, obviously, we’re carefully monitoring the market situation in order to take advantage of the best conditions. So, but it’s something that for the moment we’re planning for towards the 2025, early twenty twenty six.

Andres Sheppard, Analyst, Cantor Fitzgerald: Wonderful. Thank you so much. Congrats again. I’ll pass it on.

Tawfiq Boussaid, CFO, Lucid Group: Thank you, Andres.

Conference Operator: One moment for our next question. And that will come from the line of Stefan Gengaro with Stifel. Your line is open. Mr. Gengaro, if you’re on mute, please unmute your line.

Stefan Gengaro, Analyst, Stifel: Okay. Sorry about that. I, I hit mute by mistake. Thanks for taking the questions. What I would like to start with, if you don’t mind, is can you talk about the approach, the current approach and if it’s changed to licensing agreements and kind of what you see the potential there for over the next couple of years?

Mark Winterhof, Interim CEO, Lucid Group: Yeah. I mean, the comment on that one would not change or has not changed compared to what I said three months ago, because we have still ongoing discussions on that topic. Most of the other OEMs we are talking to, they have other problems right now. I mean, they’re still very much focused on grappling with the tariff effect and those kind of things, and so those discussions are still happening. They’re just progressing slower.

And we still see the potential in those deals, but as I said Would the last time

Andres Sheppard, Analyst, Cantor Fitzgerald: you like that?

Mark Winterhof, Interim CEO, Lucid Group: No, thanks.

Andres Sheppard, Analyst, Cantor Fitzgerald: No, okay, just wait.

Mark Winterhof, Interim CEO, Lucid Group: Background noise there. But we also have now discussions on partnerships beyond this topic, and you know, this is the neuro and Uber deal is one example of that, and that’s now what we are expecting to come to fruition more in the future as well.

Stefan Gengaro, Analyst, Stifel: Great. Thank you, and I apologize for that background noise. The other question, just the the update on how the new Atlas powertrain is coming, and so that your your your confidence in in the development of that and the efficiency of that product versus kinda because you’re just so well known for how efficient the the motor systems are. So I’m just curious where things stand there.

Mark Winterhof, Interim CEO, Lucid Group: Yeah. On track. I mean, to say it to say it short, because, obviously, this is our next generation powertrain that will achieve or we are targeting to achieve, the same efficiency or even better at a much lower cost. So, we are we are fully on track with that at this point and, yeah, looking very much forward to deploy this in the midsize platform as the first vehicle.

Stefan Gengaro, Analyst, Stifel: Great. Thank you, Mark.

Conference Operator: And that will come from the line of James Picariello with BNP Paribas. Your line is open.

Jake, Analyst, BNP Paribas: Hi, guys. This is Jake on for James. I was wondering if you could just quantify gravity deliveries in the second quarter. And based on third party data, which is admittedly unreliable Lucid, there were no deliveries in July. So is there a hang up, you know, like quality issue with the gravity delivery ramp, and when should we expect to see material volumes?

Mark Winterhof, Interim CEO, Lucid Group: Yeah. Well, let me address July 1. That number is false, and that’s all I want to say about that. It’s totally false. But when it comes to number for second half, we are not disclosing this, but we’re definitely in the process right now of ramping up GRAVITY in the second half of this year.

The GRAVITY will actually be the majority of our deliveries. But yeah, going back to the July number, we saw that as well, but yeah, it’s unfortunate that something like this is published.

Jake, Analyst, BNP Paribas: Yeah, thanks for clarifying on that. And then CapEx is an area where I think you guys have done a good job controlling your costs, keeping it under expectations, But even the revised guide, it looks like, you’re implying spending will more than double in the second half. So could you just talk through some of the puts and takes there? Thank you.

Tawfiq Boussaid, CFO, Lucid Group: Well, I mean, as as you can imagine, I mean, when it comes to the CapEx spend, it’s

Tawfiq Boussaid, CFO, Lucid Group: not a linear exercise. So, I mean, between the moment you place your POs, you finalize all the blueprints and so forth, I mean, there’s a lag of time. So this is why, I mean, we see a CapEx is back loaded. So most of the spend will be related to our AMP2 facility in KSA. So again, it’s not a linear spend.

What we have tried to do is to have a critical look at all the CapEx spend proposal and make sure that we only spend where it deserves to be spent with the highest probability of return and the highest level of return, hence the revised guidance that we have provided. But again, yes, I mean most of the spend will happen in the second half of the year.

Jake, Analyst, BNP Paribas: Thanks guys.

Conference Operator: Thank you. Our next question will come from the line of Tobias Baith with Rothschild. Your line is open.

Tobias Baith, Analyst, Rothschild: Hi. Good evening, Mark and Tafiq. I hope you’re both well, and thanks for your time. I have three questions, if that’s okay. Two for Mark and one for Tafiq, and I’ll ask them separately.

Mark, in your prepared remarks, you cited the supply of magnets as constraining production, but output in the second quarter was at an all time high and also above demand. And I also understand that gravity in the air use the same magnets. So I’m slightly confused and I was wondering if I can ask for further details on that topic or if you can tell me what I’ve missed.

Mark Winterhof, Interim CEO, Lucid Group: Yeah, well, first of all, that problem is behind us, so we solved that problem in Q2. Second half of the year, we have secured enough magnets, so we have no problem with that anymore. When it comes to your second part that, you know, the gravity and the air use the same magnets, that’s actually not exactly true, because what happens is that over from each model year and from each model, we have minor changes in the chemical setup of the magnets and those kind of things. So that is not really correct. So we had a shortfall for a certain TRIM, and we were able to overcome this with some magic, I would call it, that our engineering teams then were able to do.

So we actually didn’t with production due to that in Q2, and, yeah, that helped us over that hump.

Tobias Baith, Analyst, Rothschild: Okay. I think I understand. Second question for Mark. About two years ago, I asked your predecessor to detail the timeline and the required milestones from then to starting production of the gravity to help me judge progress from the outside. I was wondering if you could please do the same for the ATLAS powertrain and the first model based on the mid sized platform.

Mark Winterhof, Interim CEO, Lucid Group: Yeah. I mean, right now, one key thing that we’re doing is basically we’re in sourcing right now, and basically what I’m saying right now applies to the ATLAS powertrain, but also to the midsize, so there’s not really a difference because both of them will come at the same time. Then sourcing is important because we are sourcing right now for the so called PV builds, which is the product validation builds. So all of the engineering work will very quickly be finalized, and then from there we go into a validation phase with all kinds of testing, including winter testing later in the year, and then homologation. So those are the things that are following.

I guess the background of the question is, are we on track with what we planned, you know, to start the production of the midsized in 2026? And the answer to that, this is our current plan, has not changed.

Tobias Baith, Analyst, Rothschild: Thanks for that. T. C, final question from me. How much do you step up in the write downs on inventories and losses on firm purchase commitments is attributable to tariffs versus building raw inventory to aid the ramp up of the gravity?

Tawfiq Boussaid, CFO, Lucid Group: Yeah. So, again, first of all, yes, there is an impact on inventory adjustment on inventory for the next six months commitment of purchases. It’s, as far as we see it, I mean, an event which will hit primarily Q2 because for the subsequent quarters, I mean, we will need to do a reversal, which will offset the new provision that we will book, provided that we maintain roughly an equivalent volume of procurement. So knowing that we have acquired and we did an increase in our inventory in Q2, we should expect the volumes to remain roughly stable in Q3 and Q4 and therefore it will not raise any incremental impairment that we might have to book. So we have stated that the tariffs, the impact from the tariffs in Q2 was amounting to roughly 55,000,000.

So this is actually a net figure which is made of three different amounts. The first one is the actual tariff impact, which is in the range of $55,000,000. Then there’s the impairment that we book only in Q2, and then there’s a netting effect coming from the reimbursements that we’re getting, the famous 3.75% that we get. So all this leading to a net 55 plus million dollars for the quarter.

Tobias Baith, Analyst, Rothschild: Okay. So just so crystal clear, at the 21 points of tariff impact, not all of it was actually realized in the second quarter, and you’re still expecting some reimbursements to come later in the year. So actually, the impact from the second quarter was more than 21%.

Tawfiq Boussaid, CFO, Lucid Group: So, no, no. I mean, we will have reimbursement, so this will continue. It’s a flat percentage, which is a function of the localization of the procurement activity and the volumes. So this will continue until the end of the year. The only difference that will not happen or the only element which will not happen or will not have an impact on our financial for the balance of the year is the booking of the impairment of the inventory because this will be netted off between reversal and provision that we book.

So that’s why when you look at the statement that we have or the guidance that we have given, we are saying that the tariff impact on a full year basis will be on the lower end of what we have provided, so we said 8% to 15% on a full year basis. We have 21% in Q2, primarily because we had to book the first impairment on inventories. That will not happen for the subsequent quarters.

Tobias Baith, Analyst, Rothschild: Okay, understood. Really appreciate the detail from both of you. Thanks for your time. Pleasure.

Conference Operator: Thank you. I’m showing no further questions in the queue at this time. This concludes Lucid’s second quarter of twenty twenty five earnings conference call. Thank you all for joining us today, and you may now disconnect.

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