Lucid Group, Inc.

Ladies and gentlemen, thank you for standing by and welcome to the Lucid Group fourth quarter and full year 2021 earnings conference call. Please be advised that today's conference is being recorded. If you object to the recording, you may disconnect at this time. Later, we will conduct a question and answer session. Instructions on how to queue for the questions will be given at that time. I would now like to turn the conference over to Lauren Simone, Investor Relations of Lucid. Ms. Salone, you may begin.

Thank you and welcome to Lucid Group's fourth quarter and fiscal year 2021 earnings call. Thank you for joining us today. On the call, we have Peter Rawlinson, our CEO and CTO, and Sherry House, our CFO. Our 10-K was filed and the earnings released for the issue after the close of market earlier today. Both are posted on our website. Before we get started, we want to emphasize that some of our statements made on this call particularly those regarding the future financial performance of the company, industry trends, company initiatives, and other future events, are based on the information that we have as of today and include forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are subject to numerous risks, uncertainties, and other factors that could cause actual results to differ from expectations. And we refer you to the cautionary language included in risk factors in our annual report on Form 10-K for the year ended December 31, 2021, as well as other documents filed or to be filed with the SEC for a fuller discussion of such risks, uncertainties, and other factors. Forward-looking statements made during today's call speak only as of the time they are made. and we are under no obligation and expressly disclaim any obligation to update, alter, or otherwise revise any forward-looking statements, whether as a result of new information, future events, or otherwise, except as required by law. You are cautioned not to place undue reliance on these forward-looking statements. 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 a reconciliation of GAAP versus non-GAAP results is currently available in our earnings press release issued earlier this afternoon, as well as in the appendix of our investor deck and available in the investor relations section of our website at ir.lucidmotors.com. And now I'd like to turn the call over to Lucid CEO and CTO, Peter Rawlinson. Peter, please go ahead.

Thank you, Lauren. We're excited to update you on Lucid's tremendous progress in the fourth quarter and for the full year of 2021. During the fourth quarter, we reached a significant milestone for Lucid. We commenced customer deliveries of the world's most advanced EV sedan. As of year-end 2021, this included 125 cars in customers' hands. while we've produced over 400 vehicles in total as of today. And of these, over 300 have now been delivered to customers. We accomplished these deliveries against the backdrop of an extraordinary supply chain and supply quality challenges. Indeed, we could have chosen to build faster, but we elected not to sacrifice quality given our unwavering commitment to the highest standards. These first deliveries of Lucid Air validate our mission to inspire the adoption of sustainable energy by designing and building captivating electric vehicles centered around the human experience. While the delivery of our first cohort of cars to consumers is important in its own right, It also represents the first real-world stress testing of a critical part of the customer journey, from reservation to order to production, delivery, and after-sales supports, including the over-the-air updates to the Lucid Air's onboard software. When you step back and think about it, we put both a full EV powertrain and vehicles into production across two separate and distinct factories, which I believe to be the very first time that that's ever been done. So we were able to run two parallel tracks simultaneously in our manufacturing, producing our proprietary powertrain and battery packs at one site, and then fully assembling the car a little way down the road at our AMP factory, an extraordinary achievement. And having worked through all of this, we are more confident than ever that we're building a quality foundation on which we can scale our business and build long-term growth. Starting and beginning to ramp production was a significant step in moving from concept to reality and delivering on our mission to create a future where there is no longer an artificial choice between doing great things and doing the right thing. The initial feedback from customers and third parties has been resoundingly positive. So many customers are saying that their Lucid Air is the best car that they have ever driven, and praise the quality of the build, enjoying the engaging, dynamic driving experience, whilst also relishing the luxurious interior ambiance. At the time of our last call, Lucid Air had just been named Motor Trends 2022 Car of the Year. Since then, we've continued to rack up industry accolades. We were named Best New Car to Buy in 2022 by Green Car Reports, the 2022 Luxury Green Car of the Year by Green Car Journal, and MotorWeek 2022 Driver's Choice Award for the Best EV. The EPA has officially certified the Lucid Air Dream Edition with the longest range of any EV at 520 miles. And subsequent to the end of the quarter, Inside EVs conducted a real-world driving test to validate our 500-mile range at a steady 70 miles per hour. I encourage you to take a look at their coverage, which is posted online. In addition, we have the fastest charging EV available today, independently verified to be capable of charging 300 miles in just 22 minutes. And as I recently told the New York Times, we've replaced range anxiety with range confidence. Now, on that note, I do want to emphasize a point which has been all too long overlooked here. Our transformative range and efficiency are as much due to our in-house software as our in-house hardware. We truly are becoming as much a software company as a hardware company. And I believe our efficiency in miles per kilowatt hour is an appropriate and valid metric for this. Now, these metrics reinforce that our powertrain is the most efficient in the market, in the real world, and in customers' hands. And this is a critical point. Our enhanced technology, enabling more miles from a smaller battery size, will allow us to shrink pack sizes for future products whilst maintaining a highly competitive range. And this is particularly advantageous for the Lucid Air Pure variant. All of this is translating to significant demand for our products. As of today, we had over 25,000 reservations for Lucid Air, representing a 47% increase from our 17,000 reservations in mid-November. Our reservation book represents a healthy mix across our products, from our higher-end trends through to our pure model. The Lucid Air Dream Edition was heavily oversubscribed and is completely sold out. We continue to see strong demand across our highest-performance product tiers. Actually, we're considering how best to address this demand. We are gratified that customers recognize the exceptional quality of our cars with their industry reading independently certified range, exceptional performance and handling, and unmatched efficiency. To address the rising demand for our products, we are actively working to expand our manufacturing facility in Arizona, AMP1. This is an imperative for us. Increased production capacity is essential to drive mass electrification and meet customer appetite for our vehicles. We continue to make good progress on the addition of 2.85 million square feet of manufacturing capacity as part of phase two. And Sherry will provide further details. And as we discuss ramping up our manufacturing footprint, today we are also excited to announce plans for a new factory in Saudi Arabia, our first international production facility. Lucid estimates that the selection of KSA as the location of its first international manufacturing plant may result in financial benefits to Lucid of up to $3.4 billion over 15 years. This facility will be a world-class manufacturing center with the ability to produce up to 150,000 vehicles annually at full capacity. We appreciate the efforts of the Ministry of Investment of Saudi Arabia, the Saudi Industrial Development Fund, and the King Abdullah Economic City to finalize this game-changing collaboration. We are thrilled that this collaboration will allow us to introduce the world's most advanced electric vehicles to more people and additional markets in the coming years, and also enables us to further our shared ambition to transform the economy of the KSA to sustainable transportation and energy. We look forward to breaking ground shortly and expect the facility to begin production in 2025. In the more immediate term, like many manufacturers, our production has been and indeed continues to be impacted by supply chain challenges. As you saw from our press release today, we have updated our 2022 production outlook for Lucid Air to a range of 12,000 to 14,000 vehicles. As a vertically integrated company, Our technology and engineering foundation gives us significant advantages. We have control over both software and hardware, and the proprietary powertrain and battery pack technology have been holistically designed for scalability of automated manufacturing. And because we have a clean sheet approach without the constraints of managing a legacy internal combustion-based business, we've been able to pivot and adapt quickly if availability of certain components is disruptive. As an example, we have been able to manage the chip shortage in partnership with our suppliers. The supply chain issues that we are experiencing from factors including component shortages are insistence on the highest quality parts and logistics issues. In some cases, the pandemic meant that our teams could not visit our suppliers in person to ensure alignment on engineering specifications and tooling. As travel has opened back up, our supplier quality teams have been able to address many of these issues. I will note that these issues are impacting only a handful of our approximately 250 suppliers. and are not affecting critical single source or dual source components like semiconductors or batteries. Instead, it's being commodity items like glass and carpets, and we've adapted by changing our specifications or, indeed, switching vendors if needed. In some limited cases, we are evaluating additional opportunities to move production in-house, to drive further efficiencies. We believe we will move past the key bottlenecks we're experiencing in the next few months with further improvement in the second half. We're continuing to augment our skills and capabilities and refine our processes in supply chain and logistics. As a startup, our priority is to gain efficiency and improve as we scale. None of this is possible without an experienced team that brings decades of experience in the automotive industry, including in manufacturing and the supply chain. Indeed, we recently added Ralph Jacobs, a veteran of Audi and Volkswagen, as vice president of program management to help spearhead our launch efforts alongside our existing leadership team. Overall, While we are optimistic that our current shortages will ease over the coming quarters, we also know that unexpected issues will arise in the future. And we are confident that we have and continue to augment the right team in place to manage them. We are at an inflection point in terms of consumer interest in and adoption of electric vehicles. which means our timing as we scale simply couldn't be better. The entire car market is going electric. One need not look further than the six Super Bowl ads for electric vehicles to know that the tide has turned. Whether it's Bentley planning to be all EV by 2030, GM and Renault-Nissan investing significant sums to build EV capacities over the next few years, or Volvo's effort to become the first all-electric legacy automaker. We've started where they're all heading, and I like our odds. As we put the first Lucid Air Dream Edition cars into customers' hands, we're at the forefront of one of the most significant transitions in mobility in generations. Now, not all EVs are equal. Our technology supports the greatest efficiency, as well as the roomiest interior for an exterior footprint of our size. And with the growing interest in EVs, the opportunity is enormous. And we are well positioned to target an expanding global market in the years ahead. We are attracting all types of consumers, not just luxury traditional car buyers, but also early EV adopters, consumers seeking performance, and consumers focused on sustainability. I hope you'll stop by one of our studios to see our products up close and learn more, if indeed you haven't already. As we look ahead, we are continuing to expand our retail footprint with our first studios in Europe and Middle East planned to open later this year. In addition, We're making progress in the development of new models such as our Gravity SUV. We continue to experience earnest interest in Gravity, and our ambition is to make Gravity as outstanding as our first product in the sedan category. We now expect Gravity production to begin in the first half of 2024, which will help ensure it meets our commitment to high quality standards. This will also provide us additional time to implement learnings and best practices from our AIR launch. I continue to personally oversee the engineering developments at Gravity, and I'm becoming increasingly excited by its sheer disruptive potential. In closing, I'm confident we have the right combination of technology, people, products, and funding to continue to break new ground in the large and growing market for electric vehicles. We have a significant cash position and a strong balance sheet to support the scaling of our business and to capture the tremendous growth ahead. We have great confidence that our technology will lead the industry in development of new products that will redefine consumers' expectations of EVs. 2021 was a great year for Lucid. And at the same time, we're only getting started. While I certainly have been frustrated by the supply chain and logistic setbacks that we've experienced, our conviction and proof points in what we can accomplish has never been greater. I'm incredibly proud of our team and everything that we've achieved to date. And with that, Let me turn it over to Sherry for an update on our financials. Sherry.