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We're live in DeSoto, Kansas at Panasonic's brand new EV battery plant four point seven million square feet at full capacity, which will happen later this year. So news we broke with Panasonic's North America CEO Megan Young one lee thirty gig or hours of capacity. That's enough cells for five hundred thousand EV's Parana one of the key customers Lucid, and Lucid CEO Mark went Off Interim CEO Mark winter
Off is with us. Now. This is a significant moment for you as well, because your first domestic supply of cells reflect on that.
That is true. Yeah, So currently we're getting our battery supplies either from Japan or from Korea, depending on the supplier, and Panasonic is a great partner for us. We decided two and a half years ago to make together this investment here and to localize the production. That's hope for bugs from here to country.
It's not just volume supply. This is twenty one seventy. But my understanding is there were some co engineering to make this as good as it can possibly be. Explain how that works.
It's a great collaboration between our engineering departments and their engineering department. We bring in a lot of experience on what this cell is supposed to do in real life, and they make it happen with you know, chemistry and with all of the parameters of the cell. So it was really really great collaboration. And that we also then are able now to produce us here locally obviously in the current climate, helps us a lot.
How did the economics of the DeSoto Candice May twenty one, seventy stack. I know that you love charts and spreadsheets as much as I do, but you must have done that analysis.
Yeah, absolutely, I mean, like I would say, we wouldn't have done it if it wouldn't be economically feasible or beneficial. As I mentioned before, we made that decision, not just recently so terriffs were not on the radar screen at that time. We did that decision two and a half years ago, and at that time, together with the forty five x incentive text credit, the economics make sense. I still have to say, and I hope the Panasic sonic here's that that you know, there's some room of improvement.
But also right now, obviously with the tariffs, this is a very good move for us.
Because the same cell that would otherwise have come from Japan or Career is subject to tariffs. It is that's a part of the equation that is correct.
And the other thing that we are currently working on together with Panasonic is obviously further localizing the supply chain for the cell, because it doesn't do you a lot of good if your manufacture here, but you still import the raw material, which is then subject to teriffs. So we're already doing a lot of investments in that. You heard about our graphite one investments on the graphite and other materials, so we're working with them on making that happen as well.
Mark, I've covered Lucid for a number of years. This is the first time you and I have spoken, and I'm grateful for your time. Your predecept sessor Peter Robinson had a very simple argument. Lucid had the best technology on the hardware side and software battery management system. And even though your journey started in the premium segments, that you would scale to volume because you would just say this performance and range in this pack, we can just
scale it down make a more affordable version. Have we hit that inflection point yet?
Well, I mean we're about to you know, everybody knows by now that follows loserd that you know, we are very very strongly working on our mid sized platform, right, which is a you know, smaller platform also from a price point perspective, more in the round, in the fifty thousand dollars range and not where we are right now, and that's when we really hit that inflection point. But mister gravity that we are ramping up right now, we're already expecting to have much higher numbers that we had.
In the past, right, I think, you know, there's a lot of work to do in the second half of the year to reach twenty thousand. What role does the DeSoto plant play. Will you be able to get hold of sales from here for vehicles sold or delivered in this calendar year?
No, not yet, okay, so something that is something for next year. And again with our partners with Panasonic, we are working on opportunities to further bring this in because obviously in the current climate, that is very important for us to localize.
We've focused this morning a lot on policy. You've brought up the forty five X credit, but the consumer credit of seven thousand, five hundred dollars likely no more. What can you do in that environment with the vehicle? Are you able to pull forward lower price point variant? Are you looking to just appeal to the premium segment on an ongoing basis.
Well, first of all, when it comes to our our current vehicles with the Air, it might not be widely known, but we are the best selling vehicle in our segment, the best selling ev and we also were in the second half of last year. Actually know, in the beginning of this year, we were the best selling vehicle in
the whole segment, including ice vehicles. So the Air is actually doing well, although the numbers are obviously when you look at the broader scheme of things, I'm not that high yet, but that's because of the size of the segment. With gravity, obviously, we're now reaching a different scale and we're still ramping up the production and as you said, we have to do quite a lot in order to get to our target for this year. But it's going well.
We're unclocking some of the blockages that we had in the supply chain, and our plant really got into the groove to create the vehicle. So I would say the inflection point of having really economics of scale is still a little bit out. We're still were appealing to the higher price segment. That's what we have. And I mean in automotive, you cannot just decide, oh, let's let's put out a new cheaper variant next week. It takes ten
years to implement, to plan, to engineer, to validate. So that's that's sometimes you know, not well understood that manufacturing and then building great cars is a long term game. You have to build also, economics of scale over time. It's not something that happens from one day to the odd.
I'll hold you to it. Twenty thousand is realistic this year with the time left to you.
We're in a quiet period right now, so I cannot really talk about it. I suggest you tune in in our earnings call on August fifth. I will do and you will definitely hear about it.
And the mid sized platform is on track for next year.
And the same applies to that as well. We're working very hard, but on August fifth there will be news on them.
The other part of Lucid's history was idea of partnerships, manufacturing partnerships licensing technology. Has that idea change given the political environment.
No, actually no, it hasn't so as a matter of fact, And I said that in the last couple of months, and everybody honestly understandably asked me, okay, where is it? Where is it again? Those things take time, and particularly in the last couple of months with the uncertainty of the terrorists. Have to say, many of the people we had conversations was to have other issues, you know, they
have pressing things to solve right now. In the last quarter we also, on top of that, had you know, the magnet shortage which actually halted production for several players. So those discussions still happen on our EV court technology, but also beyond that, stay tuned, there will be other news also.
Those potential partners, though motivated by the environment, the effort to onshore industry in this country exactly to work with American.
Yeah, they're different, they're different things. First of all, Right now, with the let's say perceived slow down of EV adoption, especially companies that have both ice vehicles and evs, they can only invest the dollar once. So right now we see let's say shrift back to ice vehicles and therefore, but they still need to come out with new models, and therefore we have increased interest in Hey, can we do things together? So and I expect this to continue.
Actually, you talked to a moment ago about being dominant in your segment, the lead seller in that segment. But everyone always asks me if somebody is put off buying a tested vehicle, I drive a tested vehicle or model. Why But there are many out there that say I don't want to buy a tested vehicle. Have you any data that says those buyers turn to Lucid in the pure play categories that you operate in.
Yeah. Absolutely, I mean, as I just said, we're now the best selling vehicle in the United States in our segment that includes the model, our segment. I mean I don't compare right now the gravity because we're still ramping up. We're in the phase of ramping up. I guess let's talk again by the end of this year where we stand on the gravity. But the ear Yes, we see a lot of incoming. We always actually, by the way, had a lot of interest Fumpter's love byers. It's not
really new, but it has increased. Absolutely.
This administration is fascinating in Lucid's contexts. Maybe the pro EV policy is not there, but supporting US manufacturers is. You also have the relationship with Saudi Arabia, and the administration in the context of GPUs for example, has been supportive in those trade deals. What has the experience been like leading this company under the Trump administration in net, how do you think you've come out so far?
Well? I mean, obviously things became more complicated. I mean the the tariff situation. I mean, there's no doubt it increases our cost and it also creates a lot of additional headache because you now have to completely rethink the supply chain. Are you continuing certain things or are you localizing? Again, that's nothing that happens from one day to the other. We are doing okay when you compare to other players
in the industry. Also from the cost increases, particularly because we build everything right now in the United States, and we build all of the vehicles, our key components, they're all built here in the United States. Having said that, we are hit by obviously raw materials or let's say Tier two suppliers that we have to import and we have to pay teriffs on that. So it's not that we are not impacted, but we are less so than others.
So yeah, I mean it's something we have to do to work with and for us, it's also because we are a pure EV manufacturer. We believe in the future of electrical propulsion. We're not wavering. We're not saying, oh, let's do I don't know a range extender or something that is not going to happen with LUCID. This is part of our vision. You know that this is the future and actually important to save our planet. So we
will find a way through this. But also have to say, for the American consumers, vehicles are going to be more expensive under the terriff region. There's no other way around it.
There is. Yes, you can say, oh, you just need to localize, well, yes, but that still increases the costs because there's a reason why the supply chain is so global because certain things are either not available here in the US or are just very expensive, so you import them, and if you change that, you still have higher cost in the United States, which means manufacturers like US are
actually any manufacturer has to increase prices. There's no other way unless you want everybody to be nonprofit organizations, which then would lead to no innovation, no technology leadership, and I think that's in the current climate. Globally, it's the last thing we want.
The cost of doing business in America. Mark winter offf Loucids Interim CEO, one of the core customers at this Panasonic De Soto, Kansas plant that is due to hit full capacity this year