Lucid (LCID) - 2024 Q3 - Earnings Call Transcript

Financial Data and Key Metrics Changes - In Q3 2024, Lucid Group reported revenue of approximately $200 million, up 45.2% year-over-year and flat sequentially [31] - The company delivered 2,781 vehicles, representing a 91% increase year-over-year and a 16% increase sequentially [10][30] - GAAP gross margin improved by 28 percentage points sequentially, driven by cost reduction initiatives [32] - The adjusted EBITDA loss was$ 613.1 million, an improvement from $647.6 million in Q2 [38] Business Line Data and Key Metrics Changes - The company produced 1,805 vehicles in Q3 and reaffirmed guidance to produce approximately 9,000 vehicles for the full year 2024 [30][41] - The Lucid Air outsold many competitors in both the electric and gas vehicle markets in September [11] - The Lucid Gravity SUV has opened for orders, with significant interest noted from customers [22][23] Market Data and Key Metrics Changes - Lucid's brand awareness reached an all-time high in Q3, contributing to increased delivery numbers [11] - The company noted a 70% increase in foot traffic at studios during the Lucid Gravity Roadshow events [23] Company Strategy and Development Direction - The company raised approximately$ 1.75 billion through a public offering to support its strategic initiatives and maintain financial runway into 2026 [8][39] - Lucid aims to leverage its technology and scale to enhance gross margins and drive long-term shareholder value [48][50] - The upcoming Lucid Gravity is expected to enter a significantly larger addressable market compared to the Lucid Air [49][50] Management's Comments on Operating Environment and Future Outlook - Management acknowledged challenging market conditions impacting share price but expressed confidence in the company's strategic direction and long-term potential [46][48] - The company is focused on cost transformation initiatives and anticipates improved operational efficiency and profitability [43][50] Other Important Information - The Lucid Air received a five-star safety rating from the National Highway Traffic Safety Administration [19][21] - The company plans to strategically expand its studio and service center footprint to enhance customer satisfaction [36] Q&A Session Summary Question: What do you have to say to early investors about the share price? - Management acknowledged market challenges but emphasized ongoing initiatives to drive growth and improve financial performance [46][48] Question: Do you plan to offer a more affordable vehicle? - Management confirmed plans for a midsized vehicle with a target price of $48,000 to$ 50,000, scheduled for production in late 2026 [54][55] Question: What are the chances of the Saudis buying out Lucid completely? - Management highlighted the strong partnership with the Public Investment Fund but did not comment on potential buyout scenarios [56] Question: Can you reach positive margins for the Air and Gravity? - Management expressed confidence in achieving positive margins for both models, citing significant reuse of powertrain technology [57][58] Question: What is the anticipated unit mix for next year with Gravity ramping up? - Management indicated a focus on high-end Gravity models first, with a transition to lower-priced models as production ramps up [74][75] Question: What are the working capital implications for next year as you ramp Gravity? - Management stated that funding will support operations well into 2026, with ongoing cost reduction initiatives in place [90][92]