Lucid Motors Q2 2024 Earnings Call

[00:00:01] [SPEAKER_01]: Oh, the telecom costs 4 mobile phones, now it's only 16,20€.

[00:00:06] [SPEAKER_04]: Wow, mega! Can I get one, dad?

[00:00:08] [SPEAKER_04]: Of course, we all switch to the telecom.

[00:00:11] [SPEAKER_01]: And the card too!

[00:00:12] [SPEAKER_05]: Whether card or child, friends or family, the more you are, the cheaper it gets.

[00:00:18] [SPEAKER_05]: The Magenta Mobile offers the largest 5G network.

[00:00:21] [SPEAKER_05]: In total, the average is already 16,20€ per card per month, only on the telecom.

[00:00:35] [SPEAKER_06]: Q2 2024 Earnings Conference Call, please be advised that today's conference is being recorded.

[00:00:40] [SPEAKER_06]: I would now like to turn the conference over to you, Speaker, for today.

[00:00:44] [SPEAKER_06]: Maynard Senior Director of Investor Relations, please go ahead, sir.

[00:00:50] [SPEAKER_03]: Thank you and welcome to Lucid Group's Q2 2024 Earnings Call.

[00:00:54] [SPEAKER_03]: Joining me today are Peter Rawlinson, our CEO and CTO, and Gaggen Dingra,

[00:00:59] [SPEAKER_03]: our interim CFO and principal accounting officer.

[00:01:01] [SPEAKER_03]: Before handing the call over to Peter, let me remind you that some of our statements on this call

[00:01:06] [SPEAKER_03]: include forward-looking statements under federal securities laws.

[00:01:09] [SPEAKER_03]: These include without limitation statements regarding the future financial performance of the company,

[00:01:15] [SPEAKER_03]: production and delivery volumes, financial and operating outlook and guidance,

[00:01:19] [SPEAKER_03]: macroeconomic and industry trends, company initiatives and other future events.

[00:01:24] [SPEAKER_03]: These statements are based on predictions and expectations as of today,

[00:01:27] [SPEAKER_03]: and actual events or results may differ due to a number of risks and uncertainties.

[00:01:32] [SPEAKER_03]: We refer you to the cautionary language and the risk factors in our most recent filing

[00:01:36] [SPEAKER_03]: with the FTC and the forward-looking statements on page 2 of our Investor Deck

[00:01:41] [SPEAKER_03]: available on the Investor Relations section of our website at ir.lucidmotors.com.

[00:01:47] [SPEAKER_03]: In addition, management will make reference to non-gap financial measures during this call,

[00:01:52] [SPEAKER_03]: a discussion of why we use non-gap financial measures

[00:01:55] [SPEAKER_03]: and information regarding reconciliation of our gap versus non-gap results

[00:01:59] [SPEAKER_03]: is available in our earnings press release issued earlier this afternoon,

[00:02:03] [SPEAKER_03]: as well as in the Investor Deck.

[00:02:20] [SPEAKER_00]: Hello everyone and welcome to Kilowata Podcast about electric vehicles,

[00:02:24] [SPEAKER_00]: renewable energy, autonomous driving and much much more.

[00:02:27] [SPEAKER_00]: And as you heard from that introduction, we are going to be talking about Lucid's Q2 2024 earnings call.

[00:02:33] [SPEAKER_00]: And I don't really have a lot of preamble, so let's just jump right in to the earnings call.

[00:02:39] [SPEAKER_00]: We're going to start with Peter Rawlinson's opening remarks.

[00:02:42] [SPEAKER_00]: Peter Rawlinson is the CEO and CTO of Lucid Motors.

[00:02:47] [SPEAKER_00]: And as always, these opening remarks have been edited to apply to what we talk about on this show

[00:02:55] [SPEAKER_00]: if you want to listen to the entire earnings call, I will put a link in the show notes.

[00:03:00] [SPEAKER_00]: And that will be unedited and you'll get all of the really fun and sometimes boring financial stuff.

[00:03:06] [SPEAKER_00]: Unless you're into financial stuff, then it won't be too boring for you.

[00:03:10] [SPEAKER_00]: So let's go ahead and jump right in.

[00:03:13] [SPEAKER_08]: Now, turning to deliveries, we delivered a record 2,394 vehicles in the second quarter

[00:03:21] [SPEAKER_08]: and that was up 21.7% sequentially and up 70.5% year upon year.

[00:03:31] [SPEAKER_08]: The increase was driven by strength in North America where deliveries were up sequentially.

[00:03:38] [SPEAKER_08]: Now, turning to production, we produced 2,110 vehicles in the second quarter

[00:03:45] [SPEAKER_08]: and we're on track to produce approximately 9,000 vehicles in 2024 as I've noticed previously.

[00:03:53] [SPEAKER_08]: Production is not our bottleneck and we are managing production to prudently optimize cash flow

[00:04:01] [SPEAKER_08]: and to match deliveries.

[00:04:05] [SPEAKER_08]: Lucid's bland awareness continues to grow, reaching at all time high in June

[00:04:10] [SPEAKER_08]: since we started tracking the metric.

[00:04:14] [SPEAKER_08]: Now, we still have more work to do but the combination of a science-based data-driven approach to marketing

[00:04:21] [SPEAKER_08]: an increasing number of Lucid heirs on the road

[00:04:24] [SPEAKER_08]: and the word of most advocacy of our loyal customers is building momentum.

[00:04:32] [SPEAKER_08]: I think customers are also increasingly becoming aware of the tremendous value in technology in the Lucid air.

[00:04:40] [SPEAKER_08]: In many ways, we've reached parity or even surpassed death cards in our class

[00:04:46] [SPEAKER_08]: when it comes to range, performance, technology and pricing

[00:04:51] [SPEAKER_08]: and this is especially true when compared to other electric vehicles.

[00:04:58] [SPEAKER_08]: So it may come as no surprise that Lucid air has once again been named the best luxury electric car

[00:05:05] [SPEAKER_08]: by US News and World Report.

[00:05:09] [SPEAKER_08]: This is the third year in a row that this award has been bestowed upon the air

[00:05:15] [SPEAKER_08]: and no other car has ever achieved this.

[00:05:20] [SPEAKER_08]: But we're moving beyond being known as a luxury car maker.

[00:05:24] [SPEAKER_08]: We're a technology company and people are recognizing that we have the most advanced electric vehicle.

[00:05:32] [SPEAKER_08]: We announced in July that we achieved a landmark five miles per kilowatt hour with the Lucid air pure.

[00:05:39] [SPEAKER_08]: A critical element in achieving this was our software and innovations in our advanced motor control mathematical algorithms.

[00:05:50] [SPEAKER_08]: And I'm pleased to announce that with an over the air software update coming soon,

[00:05:56] [SPEAKER_08]: I expect all vehicles in the fleet will see some further efficiency improvement

[00:06:01] [SPEAKER_08]: bringing greater value to the car well after a customer's initial purchase.

[00:06:08] [SPEAKER_08]: 2025 air sedans will also have the Sapphire heat pump and of course the latest advancement in motor design.

[00:06:18] [SPEAKER_08]: Now this collectively is how we were able to obtain a 512 miles of EPA estimated range for the Lucid air

[00:06:29] [SPEAKER_08]: grantoring under the more stringent EPA testing and achieve five miles per kilowatt hour with the new air pure.

[00:06:40] [SPEAKER_08]: And we'll continue to provide more features and value.

[00:06:44] [SPEAKER_08]: We are planning an over the air software update that will significantly enhance our advanced driver assistance system or ADAS.

[00:06:54] [SPEAKER_08]: In late July, the first lucid gravity pre production body shell dropped down from the roof conveyor and into the main production line at our factory in Casa Grande, Arizona.

[00:07:08] [SPEAKER_08]: This marked the beginning of the Lucid gravity pre production run on our assembly line.

[00:07:14] [SPEAKER_08]: And just last week, I had the honor of driving the first pre production lucid gravity off the production line a key milestone in the journey to the schedule start of production later this year.

[00:07:30] [SPEAKER_08]: Each unit will help us perfect the process and will be used for final validation testing to ensure top tier build quality in full scale production.

[00:07:43] [SPEAKER_08]: Now I'd like to emphasize something that may still not be well appreciated by the market.

[00:07:49] [SPEAKER_08]: Whilst many may now understand the concept of efficiency, which means how many miles can one go with a given amount of battery.

[00:07:58] [SPEAKER_08]: It may not be broadly known as to why this energy efficiency is so damn critical.

[00:08:04] [SPEAKER_08]: It's quite interesting. Some might believe that it's the engineer in me driving the narrative of the importance of efficiency, but actually it's the businessman in me that's driving the efficiency story.

[00:08:18] [SPEAKER_08]: So let me explain. According to the database a two Mac one nearly 40% of the bill of materials or the cost of the material to make an electric vehicle is attributable to the battery pack.

[00:08:34] [SPEAKER_08]: Almost 40% in cars above $60,000 and in lower price cars the battery cost as a percentage of the bill of materials can be even higher than that 40%.

[00:08:48] [SPEAKER_08]: And this is why energy efficiency matters so much because the higher the energy efficiency, the smaller the battery needed for a given amount of range.

[00:08:59] [SPEAKER_08]: And this is worth repeating the higher the energy efficiency, the fewer battery cells we need for given amount of range.

[00:09:08] [SPEAKER_08]: And this is an essential factor to lowering cost when it comes to making a need be and a key element in improving gross margins.

[00:09:18] [SPEAKER_08]: It also means that battery raw materials, which is better for the environment. And this is critically important. This is truly our life mission.

[00:09:29] [SPEAKER_08]: And we can start having a greater impact through our technology because not all EVs are born equal.

[00:09:38] [SPEAKER_08]: And our technology life and the thing and access business enables our partners to accelerate their EV transition and reduce emissions with a goal of achieving the mission of a cleaner environment.

[00:09:53] [SPEAKER_00]: Let's start off with some things that I thought were important, but I didn't have clips for because we can just talk about them real quick here.

[00:10:01] [SPEAKER_00]: First, the Saudi public investment fund gave Lucid or invested one and a half billion dollars into Lucid.

[00:10:09] [SPEAKER_00]: We've talked about this before. There's a lot of... So there's one big massive public investment fund and then there's a lot of like offshoot funds which are still massive that feed it back into that fund.

[00:10:23] [SPEAKER_00]: So there's a lot of stuff going on with the PIF and Lucid has received money from different parts of that overall fund.

[00:10:35] [SPEAKER_00]: So we're just going to call it the PIF fund, but technically it comes from a different, I guess subsidiary would be the right word, a different portion of that fund.

[00:10:45] [SPEAKER_00]: Next, somebody asked what the update was on energy storage solutions like when Lucid announced the gravity however many years ago they went big on how they're going to build these energy storage solutions.

[00:10:58] [SPEAKER_00]: Right now Peter Alinson said not a priority. That makes sense.

[00:11:02] [SPEAKER_00]: Okay, let's get to his opening remarks and we've talked about most of this stuff in the past.

[00:11:08] [SPEAKER_00]: Lucid thinks that they're a tech company because they are a tech company. Any automotive manufacturer right now that's building a car outside of the physical parts in the vehicle are...

[00:11:21] [SPEAKER_00]: They're a technology company whether you have an infotainment system or an MCU or whatever. If you're controlling something with a computer, you are now a technology company.

[00:11:31] [SPEAKER_00]: Whether you want to be or not. He talked a little bit about Lucid's UI UX design improvements and I have not seen the Lucid infotainment system in a little bit, but it looked nice when I saw it.

[00:11:48] [SPEAKER_00]: One of the things I'm thinking about doing and it's not a matter that this is difficult. It's just a matter of finding the time to do it is I think I'm going to schedule a Rivian test drive and a Lucid test drive to kind of see where this is at because Rivian also had some UI UX design improvements as well.

[00:12:07] [SPEAKER_00]: So user interface user experience is what that UI UX is. Let's see deliveries and production good for Lucid, not great for other car companies but good for Lucid.

[00:12:21] [SPEAKER_00]: He said that production is not a factor and then he talked about brand awareness and how brand awareness is improving but they still have a lot of work to do on that front.

[00:12:34] [SPEAKER_00]: Lucid sells a car, you know, a vehicle that starts at $67,000 and goes all the way up to like $250,000, $260,000.

[00:12:47] [SPEAKER_00]: There are people in my life who don't really care about electric cars one way or the other who know who Lucid Motors is but they also think Lucid Motors is a very expensive brand.

[00:12:57] [SPEAKER_00]: And one of the things and I can't remember if I put this in a clip or not but one of the things that Peter Rawlinson talks about is he thinks, you know, people think that Lucid is an expensive brand.

[00:13:09] [SPEAKER_00]: And he points at the Lucid Air Pure which starts at $67,000 as proving that it's not an expensive brand.

[00:13:16] [SPEAKER_00]: But that's not true. That $67,000 there is a finite amount of people that can afford a $67,000 vehicle. So yes, it's not a $260,000 vehicle but it's not a $30,000 vehicle either.

[00:13:35] [SPEAKER_00]: So don't get me wrong, I think Lucid has a really great car. I've not heard much of any complaints about their vehicles. It sounds like, you know, other than some snafus here and there with customer service stuff, the car itself people tend to like when they buy it.

[00:13:53] [SPEAKER_00]: Now do they like it because it's a great car or did they like it because they spent a bunch of money on a vehicle and they don't want to feel foolish? Like that does happen.

[00:14:03] [SPEAKER_00]: Let's go ahead and move into our retail investor questions.

[00:14:08] [SPEAKER_03]: 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's motors and how are you staying ahead of the upcoming tech?

[00:14:21] [SPEAKER_08]: Oh man, don't get me started here. So there's two categories of some of the motors and the axial flux motor which is larger diameter and it's shorter. It's more like a pancake shape and then Lucid's motors are radial flux.

[00:14:37] [SPEAKER_08]: They're more like a drum shape and it's quite fascinating. I mean, really, I think there's a fundamental lack of understanding just how technically advanced Lucid's radial flux motors are.

[00:14:52] [SPEAKER_08]: The axial flux motors stack up reasonably well against other people's radial flux but compared with what the level of technology that we got at Lucid for a battery EV and axial motor, flux motor really sucks.

[00:15:09] [SPEAKER_08]: Now because they're large diameter, relatively low revs and quite flat, they've got a great application in a gasoline hybrid and you see these in super sports cars and they're great for that because they rev about 8000 LPM like a fast internal combustion engine.

[00:15:28] [SPEAKER_08]: But really, the problem they've got is there are very high thrust forces and they are thankfully because they're large diameter, they can't spin very fast.

[00:15:41] [SPEAKER_08]: And if you want to get the speed up to maybe 10,000 RPM, you really need to resort to carbon wrapping and believe you may, anyone who has to resort to carbon wrapping doesn't really know what they're doing with electric motors because it's super high cost.

[00:15:56] [SPEAKER_08]: It's super difficult to manufacture. You do not want to do carbon wrapping, it is a last resort. And also axial flux motors are super difficult to manufacture.

[00:16:08] [SPEAKER_08]: They've got these segmented laminations and they're radial layered so each laminations at different sizes are a nightmare to put together.

[00:16:15] [SPEAKER_08]: And so here's the thing that you can for a similar per to weight ratio get more torque out of an axial flux.

[00:16:24] [SPEAKER_08]: But it's about 23% more something like that, a really good example compared with where a lucid radial flux is.

[00:16:34] [SPEAKER_08]: But the lucid radial flux will spin about 20,000 RPM compared with the axial flux of 8000 RPM.

[00:16:42] [SPEAKER_08]: And what I said in one of my tech talks and motors is what really matters is not just not even gravimetric power density.

[00:16:52] [SPEAKER_08]: It's this bandwidth between maximum spin speed and bottom end torque.

[00:16:59] [SPEAKER_08]: And we're just so far ahead of an axial flux motor.

[00:17:05] [SPEAKER_08]: And as I say, I think there's a fundamental lack of understanding just how far advanced we are.

[00:17:14] [SPEAKER_08]: We're not going to get to five miles per kilowatt hour anywhere close if we went axial flux. I'm sorry.

[00:17:22] [SPEAKER_01]: Oh, the telecom costs four mobile phones, now we have 16,20€.

[00:17:28] [SPEAKER_04]: Wow, mega! Can I get one too, dad?

[00:17:30] [SPEAKER_04]: Sure, we're all changing to the telecom.

[00:17:32] [SPEAKER_01]: And the card too.

[00:17:34] [SPEAKER_05]: Whether it's card or child, friends or family, the more you are, the cheaper it gets.

[00:17:39] [SPEAKER_05]: The Magenta Mobile offers the largest 5G network, four in average per card already from 16,20€ per month, only on the telecom.

[00:17:51] [SPEAKER_00]: I don't actually have enough knowledge about electric motors to tell you whether this is a good answer, a bad answer.

[00:18:01] [SPEAKER_00]: What I can tell you is that Peter Rawlinson is an engineer. He is a smart person.

[00:18:08] [SPEAKER_00]: Even if some people find him off-putting, you cannot argue that he's an intelligent engineer.

[00:18:17] [SPEAKER_00]: He knows what he's talking about when it comes to this stuff.

[00:18:22] [SPEAKER_00]: Is there spin in this? Probably.

[00:18:25] [SPEAKER_00]: Is what he's saying technically correct? Probably that too.

[00:18:32] [SPEAKER_00]: I actually thought it was a good answer.

[00:18:35] [SPEAKER_00]: I learned something because there are things that I didn't understand or know about when it comes to this stuff.

[00:18:40] [SPEAKER_00]: But is it the definitive answer?

[00:18:44] [SPEAKER_00]: Probably not. It's Peter's answer.

[00:18:47] [SPEAKER_00]: Our next question is again from Retail Investors and it's about the lucid gravity in reservations.

[00:18:58] [SPEAKER_06]: Our next question comes from Alana Steven Gingaro with Steve O'Leilis Open.

[00:19:04] [SPEAKER_07]: Thanks, good afternoon everybody.

[00:19:07] [SPEAKER_07]: Two questions from me. The first just quickly. When do you think you'll start opening reservations for the gravity?

[00:19:16] [SPEAKER_08]: Okay. Well, we haven't disclosed that yet.

[00:19:20] [SPEAKER_08]: I would say that we will do so at an appropriate time.

[00:19:26] [SPEAKER_08]: What we feel is that some companies have really done their customer base of this service by prematurely opening a reservation list.

[00:19:35] [SPEAKER_08]: It becomes very speculative and almost meaningless to a certain degree.

[00:19:40] [SPEAKER_08]: What we are thinking of is opening a pre-order list and we'll let you know as soon as we're in a position to do so.

[00:19:51] [SPEAKER_00]: Quick correction. That was an analyst question, not a retail investor question. So my bad there.

[00:19:57] [SPEAKER_00]: But I agree 100%. I think that having reservations for something that's coming out two, three years in advance.

[00:20:06] [SPEAKER_00]: Yeah, I think that is or can be a disservice to reach consumers.

[00:20:13] [SPEAKER_00]: Now I will say that Lucid Motors did this with the Lucid Air.

[00:20:18] [SPEAKER_00]: So it's not entirely and I think their reservation was like $1500 or $5000.

[00:20:23] [SPEAKER_00]: There's a lot. But as we grow and learn as people, if you're not growing, you're dying, your perspective changes and you learn.

[00:20:36] [SPEAKER_00]: And this is hopefully in the case of Lucid Motors, this is them learning that maybe having reservations too soon is not a great idea.

[00:20:47] [SPEAKER_00]: Because I do think that on some level, this kind of thing, especially when products are two and three years out, I think that is going to end up grading on consumers.

[00:21:01] [SPEAKER_00]: Like think about subscriptions. Like back in the day, some software packages used to cost multiples of hundreds of dollars if not thousands of dollars.

[00:21:11] [SPEAKER_00]: We'll use Adobe for instance. And then Adobe came out with this really cool subscription where you for like 50 bucks or whatever it was, you could get every Adobe product but it's 50 bucks a month.

[00:21:23] [SPEAKER_00]: And you get all the updates and all that stuff. That's a great deal on the surface.

[00:21:30] [SPEAKER_00]: However, they locked you into a one year contract and that's $600 a year or whatever it is if it's 50 bucks a month.

[00:21:38] [SPEAKER_00]: I don't remember what it was. And all of these other companies thought looked at subscriptions as a great revenue service and it is and I'm not, it's not lost on me that I ask people to pay a monthly fee for the show not to have ads.

[00:21:54] [SPEAKER_00]: So that's not lost on me. But there is a thing called subscription for fatigue.

[00:21:59] [SPEAKER_00]: And I think that we're going to get to a point of reservation fatigue like there is so much to be excited for in the EV space.

[00:22:09] [SPEAKER_00]: But I think opening up the reservations too early, I think is a mistake that is something that has bothered me in the last couple years for sure.

[00:22:19] [SPEAKER_00]: Our next analyst question is about ADAS features and ADAS is advanced driver assistance system.

[00:22:27] [SPEAKER_00]: And those are things like lane keep assist basically, you know what all these companies are trying to do with level two autonomy and beyond.

[00:22:35] [SPEAKER_02]: Can you just talk about the importance you're finding initially with customers in terms of your ADAS features that you have in place in a rolling out.

[00:22:44] [SPEAKER_02]: Right.

[00:22:44] [SPEAKER_08]: Right. So we're having a big, big push on software. I personally taken a leading role in driving software.

[00:22:53] [SPEAKER_08]: I was reviewing ADAS this morning with the team.

[00:22:56] [SPEAKER_08]: There is a new vigor in the company and we're going to introduce hands free lane assist before the year is out.

[00:23:07] [SPEAKER_08]: We've got a whole range of improvements that I am personally driving and that isn't just ADAS.

[00:23:14] [SPEAKER_08]: That's the whole infotainment stack in the car.

[00:23:18] [SPEAKER_08]: And I want to roll a lot of that out this year on air in the run up to gravity.

[00:23:23] [SPEAKER_08]: So people will see what's due on gravity and what it's going to be and there'll be incremental evidence of improvement on air as we roll towards gravity.

[00:23:33] [SPEAKER_00]: I'd really like to have access to a lucid air for an extended period of time.

[00:23:39] [SPEAKER_00]: So I am rolling out the sapphire tier for this podcast in our Patreon.

[00:23:44] [SPEAKER_00]: It's $250,000 a month.

[00:23:47] [SPEAKER_00]: That would allow me to purchase a lucid air sapphire and live comfortably for quite a long time.

[00:23:54] [SPEAKER_00]: If somebody wanted to jump on that tier $250,000 a month seems like a good deal.

[00:23:59] [SPEAKER_00]: But in all seriousness, I would like access for a week or two of a lucid air.

[00:24:08] [SPEAKER_00]: And I want to see how their ADAS system performs and I want to see how their infotainment system performs.

[00:24:15] [SPEAKER_00]: And then compare that to the Rivian infotainment system and ADAS system as well as Teslas which already got the Tesla.

[00:24:24] [SPEAKER_00]: I've got the Tesla covered folks.

[00:24:26] [SPEAKER_00]: I just need the other vehicles.

[00:24:27] [SPEAKER_00]: I guess what I'm saying is I would like to be like Kyle Connor and just have all of these vehicles or a lot of them to test.

[00:24:35] [SPEAKER_00]: Anyway, the point is I don't know how good Lucid's software game is.

[00:24:42] [SPEAKER_00]: Their hardware game seems to be fantastic.

[00:24:45] [SPEAKER_00]: I'm not going to say unparalleled because Peter throughout this earnings call tends to put lucid in the leader role in the EV market.

[00:24:57] [SPEAKER_00]: It's here in North America and that may not necessarily be the case.

[00:25:02] [SPEAKER_00]: But they do have like great hardware for their vehicles.

[00:25:09] [SPEAKER_00]: How their software stacks up to that I'm just not sure.

[00:25:13] [SPEAKER_00]: So that is something I'm going to look into through September and October and see if I can't get my hands on one at least for a 30 minute test drive.

[00:25:23] [SPEAKER_00]: All right, let's move on to our next clip.

[00:25:27] [SPEAKER_09]: I wanted to touch on something we haven't maybe spoken about in a couple of quarters, but just on the licensing agreement with Aston Martin.

[00:25:36] [SPEAKER_09]: I'm curious if you could maybe expand on how that relationship is going and particularly when and how that might, you know, that you expect that to ramp up in terms of revenue.

[00:25:48] [SPEAKER_09]: Yeah, thank you.

[00:25:50] [SPEAKER_08]: There was an announcement that there's a little delay on their end, which is disappointing because, you know, it's disappointing that any EV is delayed.

[00:26:00] [SPEAKER_08]: But I completely am empathised with where they are in terms of their customer requirements.

[00:26:06] [SPEAKER_08]: I don't think it makes any long term difference to the relationship with solid as a rock.

[00:26:12] [SPEAKER_08]: Aston is fully committed.

[00:26:13] [SPEAKER_08]: We are.

[00:26:14] [SPEAKER_08]: We're all into ensure that Aston creates the best electric hypercars in the world.

[00:26:21] [SPEAKER_08]: And what's great about that is, you know, our price range from 69,900 we got to 249,000 Sapphire.

[00:26:27] [SPEAKER_08]: We're not going to go above that and Aston starts where we finished.

[00:26:31] [SPEAKER_08]: So there's no cannibalisation.

[00:26:33] [SPEAKER_08]: There's absolute synergy and a great working relationship.

[00:26:37] [SPEAKER_00]: I think it's great that Aston Martin and Lucid are working together.

[00:26:43] [SPEAKER_00]: I think it's great that Aston Martin is leasing Lucid's technology because that gets them to electric vehicles faster.

[00:26:51] [SPEAKER_00]: I did not realise how much money Aston Martin vehicles cost.

[00:26:58] [SPEAKER_00]: According to supercars.net, the cheapest one I can find, brand new, is $146,000.

[00:27:04] [SPEAKER_00]: But most of them start over $200,000.

[00:27:07] [SPEAKER_00]: That's insane.

[00:27:08] [SPEAKER_00]: And that's why I would like to introduce the Aston Martin tier of the Patreon for $145,000.

[00:27:18] [SPEAKER_00]: I will buy an electric Aston Martin, $145,000 a month.

[00:27:22] [SPEAKER_00]: I'm probably going to need six or seven people to join that tier.

[00:27:25] [SPEAKER_00]: Patreon.com forward slash kilowatt.

[00:27:28] [SPEAKER_00]: And here is our final question on deliveries.

[00:27:32] [SPEAKER_11]: Hi everybody.

[00:27:33] [SPEAKER_11]: I have a question on deliveries for this year.

[00:27:39] [SPEAKER_11]: You obviously have the production guide of 9,000 units.

[00:27:43] [SPEAKER_11]: You saw a nice uptake in North America demand, North America deliveries in the second quarter.

[00:27:50] [SPEAKER_11]: We could see that in the sequentially lower Saudi revenue in the second quarter.

[00:27:56] [SPEAKER_11]: But I think the indication was her lower third quarter deliveries.

[00:28:02] [SPEAKER_11]: Just curious what's in play there and what the expectation is for that whole year.

[00:28:10] [SPEAKER_08]: Sure, sure.

[00:28:10] [SPEAKER_08]: So what we haven't guided on deliveries, what we have guided upon is that we plan to make approximately 9,000 cars this year.

[00:28:20] [SPEAKER_08]: And we've just reaffirmed that today that we're on track for that.

[00:28:24] [SPEAKER_08]: Now of course, regarding deliveries, we're on the back of two record quarters, 70% up from Q2.

[00:28:32] [SPEAKER_08]: This year over last year.

[00:28:34] [SPEAKER_08]: But clearly what we're trying to do is prudently manage the business, manage the efficiency of our inventory.

[00:28:41] [SPEAKER_08]: We need some inventory.

[00:28:42] [SPEAKER_08]: We need a buffer and we need to be able to supply to customers directly out of inventory.

[00:28:48] [SPEAKER_08]: So we don't want no inventory, but we want a managed amount of inventory.

[00:28:52] [SPEAKER_08]: We don't want that inventory to grow.

[00:28:54] [SPEAKER_08]: So therefore implicitly that implies that we want to be delivering a very similar number or more than the number we manufacture, although we haven't guided upon that.

[00:29:08] [SPEAKER_10]: And right now we believe our inventory is manageable and it also, you know, a couple of benefits that bring managing our cash flow better, reducing the risk of obsolescence.

[00:29:19] [SPEAKER_10]: Also, you know, reducing the storage costs.

[00:29:22] [SPEAKER_10]: So we believe we're in a good position from that perspective.

[00:29:27] [SPEAKER_08]: And I'm just, we were cautioning about Q3 because of the summer months.

[00:29:34] [SPEAKER_08]: I think we've just been prudent about that.

[00:29:38] [SPEAKER_11]: Okay. Yeah, that's those.

[00:29:40] [SPEAKER_11]: It's just ultimately on the deliveries and the demand side.

[00:29:43] [SPEAKER_11]: Just seems as though it's more cautionary.

[00:29:47] [SPEAKER_08]: Well, traditionally.

[00:29:49] [SPEAKER_08]: You tend to see a bit of a shutdown with people on this, their long summer vacation and then an up turning Q4.

[00:29:57] [SPEAKER_08]: But we will see.

[00:29:58] [SPEAKER_00]: All right. I want to say I'm very disappointed in Peter when it comes to this answer and not because of the answer about delivery.

[00:30:05] [SPEAKER_00]: We'll talk about that in a second.

[00:30:06] [SPEAKER_00]: But because he said vacation and not holiday.

[00:30:09] [SPEAKER_00]: This man was born or at least grew up in South Wales.

[00:30:13] [SPEAKER_00]: He knows that's not a vacation.

[00:30:16] [SPEAKER_00]: That is a holiday.

[00:30:18] [SPEAKER_00]: And for him to say that, I think is extraordinarily bad form.

[00:30:25] [SPEAKER_00]: In terms of his answer with the deliveries, he should just say we want just in time delivery with a little buffer.

[00:30:34] [SPEAKER_00]: We want to be able to produce every car that we are going to deliver.

[00:30:39] [SPEAKER_00]: And we want to have a couple of cars and reserve just in case somebody can't wait a month to get their car.

[00:30:45] [SPEAKER_00]: That's it.

[00:30:46] [SPEAKER_00]: The thing that concerns me about him saying, you know, we've only provided guidance on production is because that's what they control.

[00:30:55] [SPEAKER_00]: They didn't provide guidance on deliveries because they don't control deliveries and that goes back to having demand.

[00:31:02] [SPEAKER_00]: That goes back to Lucid being in a position where people think, oh, I'm going to buy a new car.

[00:31:10] [SPEAKER_00]: I'm going to go buy a Lucid Air or even even in some cases know that Lucid Motors is a company and you know they're selling vehicles under $250,000.

[00:31:20] [SPEAKER_00]: They have a marketing issue and a demand issue.

[00:31:25] [SPEAKER_00]: So guiding on production seems like the easy way out.

[00:31:31] [SPEAKER_00]: Because people are rarely disappointed in Tesla's ability to produce vehicles.

[00:31:37] [SPEAKER_00]: They're disappointed or the market, I should say is disappointed in Tesla's inability to hit their delivery goals.

[00:31:46] [SPEAKER_00]: So or guidance so that this seems like a cheat and it's not even a very good cheat.

[00:31:54] [SPEAKER_00]: All right everybody, that is it for this episode.

[00:31:57] [SPEAKER_00]: I hope you all enjoyed it.

[00:32:00] [SPEAKER_00]: Our next earnings call will be Rivian and I'm pretty sure that will be our next and our final earnings call.

[00:32:07] [SPEAKER_00]: So I'm considering doing Nikola just because I like to throw that company in every now and again.

[00:32:15] [SPEAKER_00]: Next quarter when we do this again, I'll probably throw out Ford and GM.

[00:32:23] [SPEAKER_00]: We probably won't cover that one.

[00:32:24] [SPEAKER_00]: We'll probably cover Stellantis.

[00:32:26] [SPEAKER_00]: I'm going to start mixing these companies around a little bit based on what's going on in the news and how long we've heard from them.

[00:32:35] [SPEAKER_00]: Just because you know I think we're starting to hear the same tune be played over and over and over again.

[00:32:44] [SPEAKER_00]: And I don't, I think it's less interesting.

[00:32:47] [SPEAKER_00]: So maybe we take a pause from some of these companies and hear from others and then just kind of mix it up.

[00:32:55] [SPEAKER_00]: Every other earnings call will hear from Ford and GM.

[00:32:59] [SPEAKER_00]: And then we'll mix in Stellantis with that because they're such a big brand.

[00:33:03] [SPEAKER_00]: But we'll continue with Rivian and Lucid and Tesla, the pure electric vehicle companies.

[00:33:09] [SPEAKER_00]: We'll continue with those.

[00:33:10] [SPEAKER_00]: All right everybody, I hope again, I hope you enjoyed this program.

[00:33:14] [SPEAKER_00]: If you want to email me it's bodhi.

[00:33:16] [SPEAKER_00]: B-O-D-I-E at 918digital.com.

[00:33:19] [SPEAKER_00]: If you want to support the show, it's super easy and all we ask for is $1 a month and you get an ad free experience.

[00:33:25] [SPEAKER_00]: You can go to patreon.com forward slash kilowatt or support kilowatt.com.

[00:33:29] [SPEAKER_00]: You can also look in the show notes and we'll have information on how to support the show on ACAS Plus if you're not a Patreon fan.

[00:33:37] [SPEAKER_00]: And just one more quick thing.

[00:33:39] [SPEAKER_00]: I've thought about it long and hard over the last 30 seconds and I'm not going to do the Aston Martin tier for Patreon

[00:33:46] [SPEAKER_00]: or the Sapphire tier for Patreon because I'm not a very good business person.

[00:33:53] [SPEAKER_00]: So I want to thank everybody for listening.

[00:34:16] [SPEAKER_03]: Thanks everyone.

[00:34:17] [SPEAKER_03]: So this concludes Lucid's second quarter 2024 earnings conference call.

[00:34:21] [SPEAKER_03]: Appreciate everyone joining us today.

[00:34:23] [SPEAKER_06]: Ladies and gentlemen, you may now disconnect.