We'll take a pit stop to check in on Lucid.
The stock off to the races after announcing a one and a half billion dollar investment from Saudi Arabia's Public Investment Fund. The investment comes as the ev maker beat second quarter expectations on revenue and vehicles delivered.
Joining us now as Peter Rollinson.
He is the CEO as well as the CTO of Lucid. Peter, great to have you on the program. Let me add us first about this cash injection. I think the biggest question investors have is, you know, do you have the money to get through this difficult period and to profitability kind of on the other side. How far away is that profitability on the other side, what's the plan look like?
Well, Matt, you're referencing the one point finally billion dollars that we received from the Public Investment Fund yesterday, which we announced, and this will secure our financial runway well through the Q full of twenty twenty five. And this is significant for a number of reasons. First of all, it is the resounding endorsement and the public investment funds faith in Lucid. I'd like to think they see us as the true technology leaders in this space, and that's
a cornerstone of the relationship. And also we are key to them realizing their vision twenty thirty.
But also this funding.
Sees us through not just the launch of our Lucid Gravity, but through the crucial remp up period which sees us right through twenty twenty five.
It makes a huge difference to us.
So we always talk about the forty thousand dollars or so that Rivian loses on the sale of every one of its vehicles. I don't know how much you lose on the sale of each lucid Air, but it's got to be a lot more because your burn rate is about the same and you sell far fewer vehicles. When will you start making money on the products that you sell?
On the lucid Air that we're looking at in video right now, it's beautiful review Viewers absolutely love the vehicle, they love your technology, but it's very costly.
The Gravity, I'm sure will be the same story.
When are you going to start making money on each of these vehicles that you sell?
So there's a misleading narrative here mat that all those costs are the costs of creating the car or the cost of our technology, and that's simply not true. So much of our finances are due to a long term investment. We've just completed or very nearly completed, a three million dollar buildout of our state of the art factory in Arizona.
We've brought it in logistics, we've brought it in even stamping into a vertically integrated operation, and we've really expanded and brought under one roof the world's most advanced powertrain manufacturing capability.
No one has a facility quite like this.
And also then we're building out a factory in Saudi Arabia which we'll have a capacity for one hundred and fifty thousand units per annum. On top of that, we have the investment of bringing what I believe will be the world's best SUV, the Lucid Gravity, to freition, schedule
for starter production later this year. And then we're also building out ourselves in service network and investing in our mid sized platform, which is going to be a lendmark product for US as schedule for start of production late twenty six. So with all those investments for the long term, that's what's dominating our finance. And this is falsely read as it's costing too much. We've got the best technology in the world and it is cost effective technology.
We can manufacture this, make no.
Mistake, Peter.
Another question I have for you here is going back to what that was initially asking. On one hand, here your investments can obviously be seen at scale that you have this one point five billion dollar infusion. It's a significant amount of money. You said it all last year through the end of next year to really make a lot of progress here. But how important is profitability to you? When is free cash flow going to be at more of a sustainable pace?
Totally a profitability is the end game for US away and it's all about scale. We haven't guided precisely when, but it is all about scale, and we have four steps to get to true scale. One is to grow brand awareness so we sell more Lucid airs and we
just come off two record quarters of deliveries. Q one was a record for US, Q two was a record and with that seventy percent up on our Q two of twenty twenty three, we're out selling our core German competitors in the US very significantly, and this is not really fully appreciated. Then we've got our gravity or Lucid Gravity coming late this year that will have a total
addressable market of six times a sedan. Then we have our midsized platform, potentially a total addressable market thirty times. And on top of that, the icing on the cake is if we can get some more licensing or supply deals with another automaker for our world leading technology.
It is all about.
Scale, you know, speaking of gravity as well. You mentioned later this year, but what do you think early demand will look like and what exactly are you planning on opening up those reservations.
I can't wait because the response I'm elicitating is that people just want to buy this thing. When people first saw the air, they thought it was an amazing technological product. But when they see Gravity, they say, when can I buy it?
And that's the difference.
This is the product that all America is waiting for, is yearning for. I think the market's going to be huge, and there's nothing quite like it. It's got the driving dynamics or blow off of a Lamborghini Urus, it's got the poison stature of a range Rover, and it's got more leg room than even an Escalade, and it's a really compact car usable in metropolis on the outside, so there's never been.
Anything quite like this.
Now.
Regarding when we first start taking orders, we will do so it's sometime between now.
And startup production. Watch this space.
I don't want to go too early with this because I think some car companies have gone too early and they've done a disservice to their customers. We want to see a line of sight to deliveries from that point in time where we take the first free.
Orders, but that's going to happen. Watch this space.
Are you concerned about demand?
I mean, obviously at the very top and.
People are wealthy.
People are willing to dip their toe in the EV market and buy a luxury product. But if you look at a lower price vehicle, which is i'm sure in your future, the infrastructure just isn't there and the demand doesn't seem to be there.
How do you work on that.
Well, I think we're going through a blip right now.
I think that demand is a function of people's experience with evs, and there's been a lot of par evs. People are experiencing the lucid air and more and more people are becoming aware of how awesome it is. Our sales are up seventy percent. We're not seeing a dip in demand, and we're not seeing problems manufacturing. We can make them. It's all to do with the market.
So when we go to a more affordable car, I think there's a huge lightened demand there.
And also when we talk about infrastructure, a lot of that is the draw on the grid, because we've got the most advanced technology in the world. We just announced a landmark, a record breaking five miles per kilo water Air, the most energy efficient car in the world. The lucid Air behind me. Lucid Air Pure can do five miles per killer. What app That means there's less draw on the grid, less need for electricity. This is the advancement that we can make.
You know, we are very close to a presidential all action here in the United States, and of course the Trump ticket has been somewhat critical of some of the changes being made in the United States when it comes to a vehicles and the infrastructure around it. Do you think that any potential change in administration could mean a difference for your business.
Well, look, I'm politically agnostic here, but I've got relentless faith that common sense will prevail and the market will prevail market forces. More and more people are realizing that a carlike ours is an inherently superior experience to a gasoline counterpart.
Whether you.
Invest in a car like this for its environmental credentials, which are profound, or for the driving pleasure, it's.
A superior experience.
So unlike someone else, I'm not being distracted by politics. I'm relentlessly driving to create the best product for the customer.
Peter Alison, Lucid, we thank you very much, of course, on the heels of earnings and a one point five billion dollar check here from a division of the Saudi Arabian Public Investment Fund