- Revenue: Approximately $200.6 million in Q2, up 32.9% year-over-year and up 16.1% sequentially.
- Vehicle Deliveries: 2,394 vehicles in Q2, up 70.5% year-over-year and up 21.7% sequentially.
- Vehicle Production: 2,110 vehicles in Q2; reaffirmed guidance to produce approximately 9,000 vehicles in 2024.
- Gross Margin: Essentially flat from Q1; excluding a special provision related to a warranty campaign, gross margin would have improved 800 basis points sequentially.
- Cost of Revenue: Approximately $470.4 million in Q2.
- LCNRV Impairment: Approximately $154.2 million in Q2.
- R&D Expense: Approximately $257.2 million in Q2, up less than 1% sequentially.
- SG&A Expense: Approximately $210.2 million in Q2, down 1.4% from Q1.
- Adjusted EBITDA Loss: $647.6 million in Q2.
- GAAP Net Loss per Share: $0.34 in Q2.
- Non-GAAP Net Loss per Share: $0.29 in Q2.
- Cash, Cash Equivalents, and Investments: Approximately $3.9 billion at the end of Q2.
- Total Liquidity: Approximately $4.28 billion at the end of Q2.
- CapEx: $234.3 million in Q2, up from $198.2 million in Q1.
- Studio and Service Centers: 53 locations at the end of Q2, up from 50 in Q1.
- Mobile Service Fleet: 64 mobile units and 113 approved body shops worldwide at the end of Q2.
- 2024 CapEx Guidance: Updated to approximately $1.3 billion from prior guidance of $1.5 billion.
- Liquidity Outlook: Sufficient runway at least into Q4 2025, inclusive of $1.5 billion commitment from an affiliate of the PIF.
Release Date: August 05, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Lucid Group Inc (LCID, Financial) delivered a record 2,394 vehicles in Q2 2024, up 21.7% sequentially and 70.5% year-over-year.
- The company executed financing agreements with an affiliate of the public investment fund for additional commitments of $1.5 billion.
- Lucid Air was named the best luxury electric car by US News & World Report for the third consecutive year.
- Lucid Group Inc (LCID) achieved a landmark 5 miles per kilowatt hour with the Lucid Air Pure, showcasing advanced efficiency.
- The company reported revenue of approximately $200.6 million in Q2 2024, up 32.9% year-over-year and 16.1% sequentially.
Negative Points
- Despite improvements, Lucid Group Inc (LCID) still reported a significant adjusted EBITDA loss of $647.6 million in Q2 2024.
- Gross margin remained flat from the first quarter, impacted by a special provision related to a warranty campaign.
- The company expects to incur incremental depreciation in the back half of the year for Phase two activations in their Arizona factory.
- Lucid Group Inc (LCID) recorded restructuring charges of $20.2 million related to a recent reduction in force announcement.
- The company anticipates an increase in R&D and SG&A expenses in the second half of the year, which could impact profitability.
Q & A Highlights
Q: Can you provide more information on what you're doing to cut costs? For example, Rivian recently announced a 35% reduction in costs and expect to have positive gross margin in Q4. Can you share your path to positive margins?
A: Peter Rawlinson (CEO) - We are focused on cost-cutting across the entire company, including direct vehicle costs, supplier partnerships, manufacturing efficiencies, quality assurance, logistics, transportation, inventory management, development strategies, internal policies, professional services, and CapEx. Gagan Dhingra (Interim CFO) - We've reduced bill of materials costs by double digits since launching Air and identified more cost actions for the second half of the year. Logistics costs have reduced by double digits year-over-year, and labor costs per vehicle have also decreased. Our gross margin improved from negative 240% to negative 134%. We are also evaluating opportunities to drive down cell costs and have signed a supply agreement with Graphite One.
Q: There are companies working on axial radial flux motors and claiming highest torque and power density while using less materials, some claim to be production ready within one to two years. How does this compare to Lucid Motors and how are you staying ahead of the upcoming tech?
A: Peter Rawlinson (CEO) - Lucid uses radial flux motors, which are more advanced than axial flux motors. Axial flux motors are larger in diameter, lower in revs, and more difficult to manufacture. Lucid's radial flux motors can spin up to 20,000 RPM compared to 8,000 RPM for axial flux motors. Our technology allows us to achieve 5 miles per kilowatt hour, which axial flux motors cannot match.
Q: Can you give an update on the progress for retail ESS product? Are you still running prototypes? And can you provide information on their performance?
A: Peter Rawlinson (CEO) - We are closely engaged in the energy sector and launched our range exchange feature last year. However, our main focus is on enhancing Lucid Air, launching Lucid Gravity, and developing our midsize vehicle. While we have the competency to develop energy storage solutions, our priority is currently on our vehicle products.
Q: Are you going to be able to reach free cash flow positive with the small-ish mid CV? Should we expect that you might get to free cash flow positive before that?
A: Peter Rawlinson (CEO) - Our business model is based on successive growth through product phasing. We plan to achieve free cash flow positive through scale, starting with Lucid Air, followed by Lucid Gravity, and then our midsize platform. Gagan Dhingra (Interim CFO) - Our long-term investments in in-house powertrain and battery technologies will give us a competitive advantage as our volume increases.
Q: When do you think you'll start opening reservations for the Gravity?
A: Peter Rawlinson (CEO) - We haven't disclosed that yet. We plan to open reservations at an appropriate time to avoid speculative and meaningless lists. We are considering a pre-order list and will announce it when ready.
Q: How do you calibrate or reconfigure the engines based on your phenomenal technology at a lower price point to help bring the cost of materials down on that vehicle along with the battery?
A: Peter Rawlinson (CEO) - We are using our experience to create cost-effective variants for our midsize platform. Our current technology is manufacturable and cost-effective for its performance level. We are focusing on reducing costs for lower performance units, which will suit our midsize platform and potential licensing for traditional OEMs.
Q: Can you talk about your intentions to actually draw down on the delayed term loan? Should we expect that to happen this year or next year? And can you talk more about the drivers of the CapEx outlook reduction for this year?
A: Gagan Dhingra (Interim CFO) - We have enough liquidity and do not intend to withdraw the $750 million term loan in the near future. The CapEx reduction is due to cost reduction efforts and some deferrals. We are challenging each expense and negotiating better terms to bring down costs.
Q: Can you talk about the importance of your ADAS features to your customers and their rollout?
A: Peter Rawlinson (CEO) - We are making a big push on software, including ADAS. We plan to introduce hands-free lane assist and other improvements this year. We are also enhancing the infotainment stack in the car, with incremental improvements leading up to the launch of Lucid Gravity.
Q: What is the best way to view the recent capital raise announcement? Is it a final straw from the PIF or a restrengthening of the relationship?
A: Peter Rawlinson (CEO) - It is a resounding further endorsement of a long-term relationship with the PIF. They are committed to our long-term vision and are aligned with our goals. This capital raise extends our runway into Q4 2025, covering the critical launch period of Lucid Gravity and its production ramp-up.
Q: Can you provide more information on the improvements made to reach the 5 miles per kilowatt hour threshold for the 2025 Lucid Pure?
A: Peter Rawlinson (CEO) - The 2025 Lucid Pure runs a 16-module pack at 672 volts, achieving 5 miles per kilowatt hour and 146 MPGE. We have reduced the battery size while maintaining efficiency. If we chose less range, we could achieve even higher efficiency levels.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
