0:00Good day, and welcome to Lucid Group's fourth quarter 2025 earnings call. At this time, all participants are in a listen only mode. I would now like to hand the conference over to your speaker, Mr. Nick Twerp, Vice President of Communication. Please go ahead. Thank you and welcome to Lucid Group's fourth quarter 2025 earnings call. Joining me today are Mark Winterhoff, our interim CEO, and Tau Fik, Bussai, RCFO. Before I end the call over to Mark, let me remind you that some of the statements on this call include forward-looking statements under federal securities laws. These include, without limitation, statements regarding the future financial performance of the company, production and delivery volumes, vehicles and products, studios and service networks, financial and operating outlook and guidance, macroeconomic, policy and industry trends, tariffs and trade policy, company initiatives, and other future events. Many statements are based on various assumptions, whether or not identified in this communication

1:02and on the predictions and expectations of our management as of today. Actual events or results are difficult or impossible to predict and may differ due to a number of risks and uncertainties. We refer you to the cautionary language and the risk factors in our most recent filings with the SEC, including our annual report on Form 10K for the year ended December 31, 2025, and the forward-looking statements on page two of our earnings presentation available on the Investrelation section of our website at ir.lucidmotors.com. We undertake no obligation to revise or update any forward-looking statement for any reason except as required by mom. Hello everyone and welcome to Kill a Watt, a podcast about electric vehicles, renewable energy, autonomous driving and much, much more.

2:04My name is Bodhi and I am your host and on today's episode. Obviously, we are going to talk about lucid motors and their Q4, or Q4 2025 earnings call. So here is the thing. This earnings call was recorded prior to the US's involvement in Iran. So just kind of keeping that in the back here, had obviously the Saudi wealth fund big investor into lucid and then also lucid has a factory in Saudi Arabia that's either just barely coming online or will come online soon. I'm not sure quite where they are in the process. In my head, I want to say they've already started building cars there, but just kind of keep all that in the back of your head. Recent events don't necessarily apply to this earnings call. And if you're like, well, why are they mentioning X, Y or Z because that's obviously a concern. It's because it was recorded before X, Y or Z happened.

3:06So yeah. All right. Also, when I was sitting down to prepare this last night, prepare for the show last night, right on cue, I got an email from Thomas and he's like, hey, FYI, lucid's investor day is next week. And I was like, I already planned to do lucid's earnings call today. Normally, I would just wait for investor day, but because I didn't have anything else planned, this was my plan for today, it was to actually do the earnings call. So we're going to do the earnings call. And then next week, we have two interviews, and I'll tell you about those at the end of the show, but we have two interviews that we're going to do. And somewhere in there, I'll see if I can fit in the investor day, but it might be pushed to the week after whatever that week is. So the next week would be the third or the fourth thing to like the week of the 16th. All right. Everybody with that, because this is going to be a long one, let's go ahead and jump in to Mark Winterhoff's opening remarks, who is the interim CEO of lucid motors.

4:10Good afternoon, everyone. And I thank you for joining us. 2025 was a defining year for the industry at large. It was a year of extraordinary macro trouble in this, with the implementation of increased tariffs, the role of a federal incentives, shifting EV demand, and multiple supply chain disruptions that no one predicted at the start of the year. I'm glad to be able to say that we navigated those challenges quite well. We nearly doubled production, we significantly grew deliveries, we reduced unit costs, we gained market share, and we continued to strengthen our financial position. Let's start with production and operations. In 2025, we ramped up our first SUV, the award-winning lucid gravity. We about doubled annual production, and I will address why I'm using the term about shortly. Total units produced were not far off the expectations we set at the beginning of 2025.

5:10Despite unprecedented industry, headwinds like tariffs, magnitude shortages, even fires at one of our major suppliers, turning 2025 into one of the most challenging operating environments in recent industry history. I'm very proud of what the lucid team was able to achieve given the manifold challenges and headwinds. I think we did pretty well in comparison with others in the industry. I'm not going to name names, but I encourage everyone to do your own research. Specifically I'm proud of us being able to double production from Q3 to Q4, clearly showing that our manufacturing system is capable of scaling when supply chain moves are resolved. During the year we improved throughput, reduced rework, built repeatable processes, and expanded our manufacturing workforce in a disciplined way to scale flexibly. We also overcame quality problems that hindered our gravity ramp in the beginning, both related

6:11to hardware, but even more so related to software. We listened to our customers, acknowledged the problem, and focused on solving it. To that end, this month we rolled out a new software to all gravities which helped address a large number of these concerns, and we are grateful that this is recognized both by our customers and media. We also achieved a meaningful reduction of the material cost for the lucid air and gravity, partially offsetting the additional cost introduced by the tariffs. We implemented key organizational changes, streamlined decision-laking, improved collaboration to drive efficiency and enable accelerated growth. We landed our second much larger technology partnership, this time not only focused on EV components, but a broader partnership with Uber and Loro, leveraging a whole vehicle the lucid gravity. We see great long-term value there. We also defined and executed on our plan for autonomy.

7:13Our approach allows us to provide highly competitive solutions both for customer vehicles and robot taxis designed to be executed in the shortest time possible with limited capital expenditure. We view the emerging global robot taxi market as a prime opportunity to utilize our leading technology for potential partners and their customers. This approach delivers a lower and industry leading total cost of ownership, making new partnerships possible and significantly expanding our total addressable market. Autonomy effectively expands our total addressable market to an estimated 700 billion by 2035. As a first step in July, we announced our agreement with Uber to develop a robot taxi based on the lucid gravity, leveraging Nuro's proven level 4 stack and deploying at a minimum 20,000 autonomous lucids on Uber's global rideshare platform, which included a significant

8:14equity investment by Uber. In Q3, we closed that 300 million investment from Uber and already began delivering the first engineering vehicle for evaluation at the dedicated testing facility. In Q4, on-road testing of the robot taxi began in the San Francisco Bay area, which we also announced as the area of first deployment later this year. And at the CS in January this year, we unveiled the production intent design, the result of tight integration between our engineering team and our partners at Uber and Nuro. But advanced autonomy is not only enabling the new robot taxi market. It is also a key feature for our customer vehicles. Today, many of our customers are using our drive assist feature, and we expect that in the future, the majority of our customers will want to be able to choose whether they want to drive themselves or being driven autonomously in the moment.

9:16To provide enhanced autonomy to our customers, we are partnering to offer highly competitive autonomous functionality as fast as possible in a capital-efficient way. Our roadmap is clear. Point-to-point autonomy rolling out in gravity late this year, L3 targeted for 2028, and L4 targeted for 2029, starting with our mid-sized vehicles. Which not only provides leading autonomy functionality to our customers, but also enables new software revenue streams. We've proven we can compete and lead in luxury sedans and SUVs. Just as a reminder, the lucid air was the number one selling EV in the US in its segment in 2025, and in third place in the whole large luxury car segment, including traditional internal combustion engine vehicles. With the mid-sized platform, we are getting ready to enter much higher volume segments

10:18with a price range beginning below $50,000, which is around the average selling price of a new vehicle in the US since recently. The mid-sized platform expands our TAM from 40 billion, currently, to 350 billion by 2030. Over time, our involvement in the robot taxi market further increases this TAM to 700 billion, as mentioned earlier. We recently began production validation builds for the first model of our mid-sized platform, and they came together seamlessly. The total cost of the source components to date for mid-sized are below our initial cost estimates. And overall, our mid-sized bomb costs compare favorable to competitors. The construction of our M2 factory in King Abdullah economic city, Saudi Arabia, remains slightly head of schedule, with equipment installation having started in Q4 and progressing

11:19as planned. Also, the local supplier ecosystem around M2 is developing rapidly, with partners like Ureli, Lear and Bentley, and others localizing production. This is just the beginning. Start-up production of the first of our mid-sized platform vehicles remains scheduled for the end of this year. In Q4, we marked our eighth consecutive quarter of record deliveries, and we continue to take share. In our biggest market, the United States, in 2025, the lucid air was the number one selling EV in its segment, and in third place, the whole large luxury car segment, including traditional internal combustion engine vehicles. Q4 deliveries were up 72.5% year-over-year, and increased 31.1% from Q3. Almost all other manufacturers reported EV sales declines, and many of them were drastic. Only lucid and another manufacturer reported a relevant increase in EV deliveries in the

12:25United States in the fourth quarter. Our full-year deliveries increased 54.7% versus full-year 24. As expected, lucid gravity represented the majority of our deliveries in Q4, which was also a key reason for our significant ASP increase for the quarter. I also don't want to miss mentioning that the lucid gravity follows lucid air's tradition of collecting many awards. In close 2025, with major accolades, S-quire, car of the year, good housekeeping, luxury SUV of the year, and car driver 10-best in its first year of eligibility. Actually, not only was lucid gravity named to car and driver 10-best for 2026, lucid air was also added to the list for the third year in a row, which makes lucid the only manufacturer with all offered models on the 2026 list and we were the only EVs on the list

13:27as well. And for 2025, lucid was named best electric luxury vehicle brand by US News and World Report. Also, contradicting a common belief that EVs are not suitable for the winter, in no ways an AF winter test, lucid air once again proved its range leadership driving 520 kilometers on a single charge in temperatures as low as negative 31 degrees Celsius, nearly 100 kilometers farther than the next close competitor. In addition to gaining further accolades, we continued our momentum to build our brand awareness. We launched our global campaign with Timothy Shalamay and expanded awareness through collaborations with NBA superstars, Jalen Ronsen and Teenage George Hart. The heart-long campaign featuring those three stars was the best performing campaign so far for lucid. To serve as the new customers we are attracting, we expanded our sales studio footprint in

14:32the United States, Europe and Middle East, and I'm pleased to say that we have signed our first European dealer group agent in Germany and are in advanced discussions with more than 10 others as well as importer candidates for other European markets. We also expanded service lift capacity by 40% in the US and Canada to better serve our expanding customer base. And to make the ownership experience even better, we unlocked access to more than 27,500 Tesla superchargers in North America where gravity is able to achieve some of the fastest charging speeds in the industry at more than 400 kilowatt. Altogether, lucid customers now have access to more than 66,500 fast chargers across the US. In December, we opened a new more accessible entry point to the brand by launching lucid recharged our certified pre-owned program. For operational progress and demand for our award-winning vehicles translated into financial

15:35improvements, I will let you speak provide the details in a bit. Before I leave 2025 and talk about 2026, I'd like to explain why I said about doubled our production in 2025 earlier. After we released our Q4 production and delivery numbers, we determined that 538 vehicles that were counted as factory-gated at M2 in Saudi Arabia, the last week of 2025, did not complete certain procedures as required by our standards to be counted as factory-gated. While those vehicles were already built completely in our plant in Arizona, shipped to KSA as kits and reassembled in M2, power defined standards we only count factory-gated vehicles as produced. Therefore, you will note that our final production number for Q4 2025 has decreased from what we had announced earlier this year, and those units are now instead expected to be considered

16:36factory-gated in 2026. To be clear, there's had no impact on any customer deliveries. We are taking a number of additional steps to ensure the accuracy of our production numbers going forward. Okay, so before he gets to 2026, and honestly, I haven't listened to this earnings call, so what he says about 2026 might actually be boring enough that I don't include it, but before he gets to 2026, I kind of want to cover what he's talked about in 2025. So we just explained the production numbers, doubling and being more accurate with delivery numbers. So that was kind of the first thing that I was going to talk about, but we're going to remove that. It sounds like the year 2025 for Lucid was pretty amazing. They did, despite having some issues with the tariffs and the incentives going away,

17:36and their supplier had a fire, which I believe, and I'm going to try and look this up right now. Luminum manufacturer supplier, fire forward, this is, so there was a series of fires at the novellus plant in Oswaga, New York, and we talked about this. It was from September to November. It really caused Ford some problems. Wonder if novellus is their supplier. Novelus aluminum lucid motors, killing it on being prepared. So yeah, looks like, looks like novellus did, in fact, supply lucid motors with aluminum. So yeah, that's the supplier he was talking about with the fires and I thought that that was the case.

18:37So yeah, they definitely faced some headwinds when it comes to different, not only supply chain, but the tariffs and there was incentives that were ending and then also the supplier fire, which caused problems for not just lucid but Ford and other companies as well. Now he talked about how they released a software update that made the lucid software better. Yesterday, as I'm recording this, which I would have been March 5th, I actually got a chance to drive the lucid air and the lucid gravity. I drove the lucid air pure, so the most basic version of lucid air. And I drove the touring or grant, I think it was the touring of the gravity. And you know, I'm just going to kind of pepper my experience and throughout the earnings call where it's appropriate because this isn't like a car review, but I did want to, like have more relevant context when I'm talking about this stuff. And I'm going to be doing other drives and other vehicles as the months go on.

19:41I just don't have a lot of time to get them done. But yeah, lucid was nice enough to let me out there an hour each, one hour in that gravity and one hour in the air. So I found lucid software to be actually very responsive and super well organized. I did not have a problem finding anything when it comes to like hidden menus, you know, like everything was just kind of out there. So in the lucid air, there's an infotainment screen that's kind of down into the right, if you're sitting in the driver's seat. So that's not necessary. It's not in your field of view when you're driving. And then you had like abbreviated options in the infotainment screen that was up above that. So that's in your view. So things like the radio or navigation, that kind of stuff, that was there. And then there was more detailed stuff on that on that smaller or that bigger screen

20:41that was down to the right infotainment screen. And in terms of the software, I thought it was really good. One of the funny things is lucid has both the software that you can change things as well as the, they have physical buttons for like temperature and stuff. And you know, when I hit the button, right, it's a toggle. So I hit the button and for to turn the temperature down and the temperature went down, but then I couldn't figure out how to make the temperature go up. And like I said, the physical button is an actual toggle. So if you want the temperature to go up or the fan to go up, you actually have to tap the button up or the toggle up. So that wasn't my first test drive. I didn't find that out until the very, very end. I did have a salesperson who walked me through the car. His name was Jesse. He was amazing. Did a great job with it with a walkthrough. But yeah, for what a reason he either didn't mention that or I missed it or it's painfully

21:45obvious for most people. But yeah, that was a little bit of an issue learning curve, but in general, you know, the software I was very impressed with. And the responsiveness of the buttons and all that other stuff, once I got it all figured out, it was a great experience. Now I want to talk just a short little bit about their experience with Nero and Uber. So it sounds like Lucid wants to be like the vehicle that fits all these different ride sharing RoboTaxi platforms. So if other companies come to Lucid, they're going to have a solution ready for them and all they have to do is, you know, implement that into their RoboTaxi platform. And I think that's a really good idea, especially for a company like Lucid because not a lot of folks are out there spending $80,000 on a vehicle.

22:48But if you have, you know, if you're a Uber or a Lyft, you can spend a little bit more money on a car and an experience for the person in the car if you're not paying a driver to drive people around. And so, especially when you consider their mid-size platform, and we'll talk about that in here in just a second, he did mention autonomy and talked a little bit about DreamDrive. On the Lucid Pure, they didn't have DreamDrive for me to practice on. They had like a version of it, but it was basically like adaptive cruise control. And I use that temporarily, but it was not, I wouldn't say that was a good experience for me, but on the gravity, they had the full version of DreamDrive. And that was actually really good. I would compare that to my experiences in a Tesla with their FSD supervised. Now it can't navigate like the Tesla does, but if you're, you know, driving to, if you're

23:53driving on the freeway, and it's only designed for the freeway, it's not necessarily designed for public roads according to Jesse. If you're driving on the freeway and you want to make a lane change, you just hit the blinker and it makes the lane change safely for you. So yeah, I found that to be very, really nice. I don't remember quite what the cost was, but that was a really nice experience. He said that Lucid Air was the number one selling sedan and its price range in market. And with, okay, not taking anything away from this, but this is not a very big market. So congratulations, but sedans are not popular in the United States. I'm not sure how popular they are in Saudi Arabia, they're not super popular in Canada. And in Europe, this is a big car for Europe. So I can't imagine that the Lucid Air is selling like gangbusters there. So really this, this is one of those things that sounded like you's like fishing for a compliment.

24:55Like great. The number one selling sedan in the US and its price range in its class, but it's not a big class. It's pretty small. Talk to a little bit about the mid-sized vehicle. By the way, based on the gravity and the air, I prefer the gravity by quite a bit. But based on that, I would say that I would be interested in looking at their mid-priced SUV. I think that might be a nice car to drive around, you know, a little bit more higher in than the Tesla that I have. Not to say I'm about to buy it, but that would be something that I would look at the next time I need a car. And I mean, I hope he's able to hit production by the end of next year. But this was all, these comments were all made before all this stuff with Iran was going on. So, oh, but you know what? By the way, I made a comment earlier about Lucid's plant being in Saudi Arabia. And you might be wondering, well, that's not where the conflict is happening.

25:58Well, you know, there's lots of bombs being lobbed into different countries in that region. So it wouldn't be too far-fetched, in my opinion, for a missile or a bomb to hit an American company's factory, even though Lucid is mostly owned by the Saudis. Also, we have no idea how this is going to affect the supply chain. It might be affected very little or it might be significant. There's lots of things going on in the world right now, so let's move on to gravity. Gravity was the majority of the deliveries, which does not surprise me. And with my experience with the gravity, it was fantastic. It's weird because the glass kind of comes up over, it kind of, how am I thinking about this? Either you have the windshield and then there's a, the glass roof doesn't go all the way

27:00to the back. It just kind of goes to the back of the driver and passenger seat. So it feels like it does, but it doesn't really. But normally, in all the other cars that I've driven, the visor is mounted to a place that's not the window, right? In this, the, the sun visor is just, it's just mounted to the window. It looks very weird. And to me, it looks like a set of big fuzzy, crouch-o-mark, marks eyebrows, you know, with, with the way that it looks. It's a beautiful car. That's just a, it's just a weird, it looks weird. Having it just attached to the window itself, instead of attached to some structural part of the car. So that's a small quibble, but still, it was just, it's a weird look, it just, it just looks like big, fuzzy eyebrows. You know, some of the other things that I experienced with the gravity was, they have three

28:00different modes, drive modes, they're smooth, they're swift, and they're sprint. Smooth is just like a casual drive, Swift is a little bit more aggressive, and sprint is much more aggressive. And with the gravity, I enjoyed all three of these modes. With the lucid air, I did not enjoy the Swift, or the sprint, it just felt like the car was too rigid, whereas the smooth, it felt like it was just a more comfortable ride for me. The gravity, all three, I enjoyed, and that might be because the gravity has air suspension. So at its lowest, you can get 5.3 inches of ground clearance, and at its highest, it's 9.3. But I will say at the lowest and at the highest, those are temporary settings. You can't just drive around at 5.3, and you can't drive around at 9.3. But if you have somebody that's getting in and out of the vehicle, who has some mobility issues or their kids, being able to lower that down to the ground to get over that, I think is great. And then 9.3, obviously, if you're going over something, and you need a little more

29:03clearance temporarily, you can get that, and it will adjust. You can also have it set to automatic, so the car will decide when you need to have a little bit more clearance or a little less clearance, so yeah, overall, just fantastic. All right, let's continue on with the earnings call. For 2026, we have five clear priorities, one, further grow production and deliveries by leveraging the full potential for air and gravity, expanding our footprint into new markets. In the US and in our international markets, we plan to open 42 new locations in 2026. Second, continue to enhance our vehicles through over the air updates, given our recent software improvements, driving the gravity is now even more a true pleasure, which has been mentioned by recent teleparty reviews and our customers. Additional features will soon follow. Third, start off production of the first model from our midsize platform by the end of

30:08this year. Midsize represents a radical shift in our variable and fixed cost structure, and we will share more details at our investor day on March 12th. Delivery of our first production vehicles to Uber to support commercial operations for our robot taxi partnership. We are currently delivering our final alpha test vehicles and remain on track for commercial deployment in San Francisco Bay area later this year. Fifth, continue with prudent cost and cash management, but I will leave this to to share more. In closing, 2025 was a year of progress against extraordinary macro challenges, and we met those challenges. We exited the year stronger, operationally, financially, and strategically. All right, I actually cut quite a bit out of that. I just want to go through some of the things that he mentioned about 2026 that I didn't include in the clip, and I'll just say this real quick, there's a lot of uncertainty

31:11when it comes to 2026, I'm understatement. Lucid reduced its workforce by 12%, while at the same time paying expensive spokespeople to advertise for the company, I'm not saying that that's a bad idea or a good idea. I'm just saying while I think Timothy Chalamet is great, the movie that he did when he was where he was Bob Dylan, fantastic. I think he's great, however, I'm not going to buy a car because he's the spokesperson of the car company, and that goes for any celebrity. I don't care. You're the spokesperson, that's not going to sell me a car. In my head, paying people that much money, and I don't know what they're getting paid, but I would imagine it's a significant amount, paying people that much money to show their faces and further in paid endorsement is not worth the money. 12% reduction and worth workforce that might have been actually needed. I'm not saying it wasn't, I'm just saying if you're trying to make your stock look better and make more money, maybe one celebrity endorsement instead of multiples, maybe.

32:22I don't know. I'm not a business person. Let's go ahead and move on to our next clip. By the way, I skipped past the CTO because it wasn't that interesting and the CEO or interim CEO had already said that stuff. So let's go ahead and move on to rc.com questions. Our first question comes from Cahier A. Will Lucid earn ongoing revenue through its partnership with UberNero, such as fleet maintenance services, software licensing, or subscriptions? Thanks for that question. For this particular arrangement that we have with Uber and Nuro, we're basically selling the cars to Uber or one of its fleet partners, so there are no further licensing or subscription revenues involved. Having said that, this is only the start of our relationship both with Uber or with other players in the markets, so we're working on other arrangements in the future. I think that's interesting. I don't think we've heard about this talked about in the past, but effectively, they're

33:25going to get the money for selling the car, and then I'm sure they'll have to pay for whatever warranty costs out there, but no service type of fees as of yet, but it sounds like they're planning on it. Let's move on to our next question. With Tesla scaling back the number of miles they will be offering, what is Lucid's plan and the grab market share? Well, first of all, I would like to acknowledge the role that Tesla and also the Model S have played was paving the way for electoral mobility, and I would say we take it from here for the Model S, but also for the Model X, I think we are the natural successor of those two vehicles, and we are certainly seeing an uptake in customer inquiries from Model S and Model X owners, and we're working right now on plans on how to further accelerate that. You know what? I think this is great. I do think Lucid is, I think, well, okay, it's been a while since I've been at a Model X or Model S, so taking that caveat, I think Lucid, based on my very limited experience

34:32with both of those companies, or I guess all four of those cars, I think Lucid's the better option in terms of like it just felt like it was nicer than when I've been in Model S and Model X, and listen, there's nothing wrong with the Model S and Model X, it just felt nicer, right, to me, but I've also written in, you know, the Mercedes SUV, and it feels nicer than the Lucid. The Cadillac, a friend of mine, has a Cadillac, I think it's a lyric, and Herkhar is very nice since it might be, it feels like a better build quality than the Lucid gravity, for instance, if we're going to compare the two. So this is all to say, yes, I think that Lucid will convert some Model S and Model X customers in the future, however, there's still plenty of people being W, you know, like I said, Mercedes Cadillac, you know, Polestar has some cars that are in

35:42that, touching that price range, Volvo has some electric cars, Genesis has some electric cars touching that general price range, so, you know, it's not a given that those folks are going to head over to, to Lucid. I mean, you also have like Rivion and Scout is coming out with the, the Tara, it kind of depends on what people are looking for, but I, I, I'm not so sure that you're going to, maybe Model S, maybe people who want to stick with the sedan would go with the Lucid air, but because I don't know that any of those other companies are really offering us to Dan at that level, with that's electric, but yeah, I don't, I don't necessarily think people who are looking for an SUV, I don't think that's a slam dunk at that price for the gravity. I don't think it's a bad option. I just don't think it's a slam dunk. There's lots of options. Let's move on to the next question. Oh, and now we're on to analyst questions.

36:42All right. Next question. Just curious. If you're seeing any constraints with D-Wand memory at all in production, just countries what you're seeing out there with that situation. Thank you. Memory? You're wrong. Yeah, not right now. Not right now. I mean, obviously, we are monitoring this situation very, very closely. We have seen cost increases, but at the same time, not a shortage. And the cost increases, you know, given the percentage of the overall bond costs they are measurable, so really on a, on a small level compared to the overall cost. So far, we are in good shape, but that is absolutely one of the topics that we are monitoring on a daily basis. I think this is a good question. If you're not familiar, there's a chip shortage, and that has raised the price of electronics. Apple just released a bunch of products this week, and they didn't necessarily raise any prices, however, you know, they kind of got rid of the lower end of things.

37:49So like, if you could have gotten a 256 gigabyte in the previous MacBook, it's now 512, but you can't get it for that affordable 256 price anymore. You pay the 512 price, for instance. So they're not really raising prices, but this is affecting electronics companies throughout the world. And it's, you know, I was talking to someone and they wanted my hard drive, and they're like, what do you edit with? And I was like, well, I use this type of hard drive external when I'm editing video, because it's fast. And he's like, oh, and they look at it and he goes, how big? I said, four terabytes is what I use. And he goes, that's $500, and I was like, I know, they're really expensive. He's like, how many you have? I said, two, but I didn't pay $500 for them. I bought them on sale. But yeah, I mean, I think I paid maybe $300 for one and maybe $320 or $2.79 or something that for the other one. But they're very expensive to have these drive, to have these components.

38:50So in one way, I think that it's a problem because it might mean that Lucis is not a big enough customer to get a priority on these chips. It may not be a big deal money wise, but it might be a big deal for them to acquire because they can't make a place a big enough order because Lucid, honestly, they sell a small amount of cars relatively a year compared to GM, for instance, or if the same chip needs to go in an Android phone, that Android phone is going to sell way more to that Android phone manufacturer than they are to Lucid. So I don't think it's a problem price wise. It might be a problem down the road, just them being able to get a hold of those chips that they need and not have to make sacrifices. All right, let's move on to our next clip. Great. Thanks so much for taking the questions tonight.

39:52Maybe just to start on the margin cadence throughout the year, I know you'll probably give us some more details on this in a week or two, but can you just help us bridge some of the moving pieces for 2026 out of feel having an increase in production based on your guidance, but presumably there's also some ramp cost headlands and maybe some commodity headlands that's given where we're steel and lithium and then where your prices are going to just help us square that circle a little bit here in terms of what the bridge is for 2026 on some of those marketing drivers. Thank you. Well, I mean, there are different moving pieces associated with the margin progression and the trajectory that we're expecting. So the first thing that I think it's important again to put emphasis on is that we're expecting an improvement overall in gross margin 26 versus 2025, different levers that will be activated.

40:56The first one is volume driven, so the ramp and incremental volumes have definitely an impact on our margin and that's something that we have tried to explain in the tech that we have shared with you earlier. So I think the first absorption is an important lever. We do expect as well significant progress when it comes to our ramp to our efficiency. So we're expecting to improve, to continue improving our productivity in the plant. So when it comes to the throughput, the first time through and so forth, these are important KPIs that we will continue to leverage. We will improve the quality and all the cost associated with the rewards are supposed to decrease, the scrap impacts, all these as part of the productivity pocket. So you mentioned some of the constraints on the supply chain. I think that what we have demonstrated last year is the agility of the company when it comes

42:00to managing some of these headwinds. The plan that we currently have is still aiming at further improvements when it comes to the bill of material of the existing programs for the earned and the gravity. So there's something that we will continue working on and we have made an announcement recently about the appointment of our new head of supply chain and there's a renewed level of energy and looking at opportunities from that area. So that's certainly not something that where we will relax our effort. So it's really a set of key actions that we will be activating. But the volume and the scale remains an important component of the overall package. Okay, not something we typically talk about on the show, obviously, but I do think it was a good kind of follow up question to the question about chips.

43:03So with that, I left it in just because, you know, some of you might find it interesting. I thought it was a good answer. We'll see how it ends up working out for them at the end of next year. But yeah, all right. Let's move on to our next question. Got it. That's helpful. And maybe just to follow up, it sounds like Europe is becoming, or has been, but feels a bit becoming a little bit more of a growth strategy for you guys this year. Can you just elaborate in terms of what your expectations are? I don't know. I don't know if you can break out, you know, what percentage of these guys you expect to be versus US, but it's trying to get a sense of your expectations there. There's obviously a lot of focus around, you know, what China is viewing. And I know it's a different part of the market, but generally curious what your expectations are for growth in that geography. Thank you. Yeah. I can take that. I mean, we're planning for growth, but in this upcoming year, until we have the mid-size

44:05available, we're not planning for a gigantic growth, because, you know, our view of the vehicles that we have right now with the air and the gravity, they're still actually on the large site when it comes to the vehicle demand in Europe. And so, therefore, there's not a tremendous growth that we're attributing to that region, which will change with the mid-size. And you mentioned the Chinese, and you're right, because we actually just checked the numbers, the vast majority of the growth of Chinese co-EMs in Europe is linked to low cost vehicles. When you look at the brand that are selling more higher priced vehicles, they're actually not doing very well at all. And even, obviously, big players like BYD are seeing some kind of slowdown in Europe, in their expansion in recent weeks and months. So yeah. Again, from our side, when you look at our numbers, the Europe will play a much bigger role

45:11when the mid-size comes around, because that is also then a form factor and a size of a vehicle, which is more fitted to the European market. I mean, I think this is obvious, right? Does anybody else not think this is obvious? The gravity and air I mentioned this earlier are just huge. For Europeans, the huge, I was in 20, man, might have been 2008 or 2009. My wife and I went to Italy, and we were in Siena, which is an awesome, amazing place, where we had to park our car. Mind you, we had a small car, I don't remember what I think it was, a Pujo, we had a small car already, but where we had to park, my wife had to get out. And then the spaces were so tight that she helped guide me in to the parking spot. So I didn't hit anybody. And listen, this was not just me, stupid American. There was, this is how everybody parked in this parking lot.

46:13But she guide me in so that I can park. And then I had to exit, I'm a bigger guy, but I had to exit out the back, like out the back hatch. Imagine taking a seven row SUV or something as long as the lucid air and sit in and trying to get that around Europe in some of these towns, like again, another story. We were looking for parking in SEC and I did not, I did not understand the road signs. And I thought what it was saying was there's parking just beyond this wall here. And there wasn't, you know, it was beyond the wall. There was no driving area for tourists. You could drive there if you were, if you lived in the city, but the spaces that I was driving through were so tight that people would have to get up on a sidewalk that was about eight inches thick or eight inches wide.

47:15It was, I mean, it was amazing because I got to have that opportunity and I didn't get in trouble for it. But, you know, you're not going to do that with a bigger car like that. That's just, it's not practical, not in every place in Europe, but in a lot of places in Europe, it's not practical. However, R2, not the R2, I'm sorry, well, the R2 also, but the mid-sized, that's going to still be a bigger car for Europe, but more appropriate, but also a little bit bigger of a car. You know, I don't know if I was to go to Europe and at the car rental place, I had a chance between a choice between a Pujo, an R2 or, you know, a small Pujo or an R2 or a gravity mid-sized, what we're really going to call it, Earth. I would probably go with the Pujo just because, you know, it's, I know that it's going to be really stressful trying to get around to certain places.

48:15Not every place. I realize there are places where this car will be fine, but there are also places where it's going to be a little bit of a challenge. All right, that was our last question. So we are able to burn through this in 48 minutes, which is good because the whole earnings call was only about 48 minutes, so bravo to us for being able to do that. If you want to email me, it's b-o-d-i-e at 918-digital.com. If you want to find me on X, you can do so at 918-digital. Although I'm not over there very often, like I said, you can find me on LinkedIn where I'm more active on, which is b-o-d-i-e, grim, g-r-i-m-m. And yeah, so I'm going to have two guests next week, two different, two different interviews. The first is Jeremy Cohen, and we're going to talk to Jeremy about switch energy, and

49:18they have a whole platform, or I get a platform, a suite of products, where I guess it would be services for EV chargers. So we will talk to Jeremy on Tuesday. And then on Friday, we're going to talk to Chris Figuarita, and Chris developed a product really cool. Basically, it allows you to pump water out of things like your pool, or maybe have a cistern, but you can pump water out of that. And then you can use that water with some soy based foam, and you can spray your house down before you have to evacuate if you're in a wild land fire. So it's a really cool product, and then he has a new product that we talk about as well. So that will be on Friday, but if you want to learn more about what Chris is doing, it is firecart.co. Let me double check and make sure that that's correct. Firecart.co. All right, that's it.

50:21And then with the switch energy, it's switched without the valve. So it's s-w-t-c-h, and then energy, commonspelling.com. And you can see what they're up to before that, if you're interested, before we talk to Jeremy. All right, everybody, that is it for me. I hope you all had a wonderful week, and I hope you all have a wonderful weekend. And we're getting this show out on Friday on time. We'll see if we can get the interviews out on time. Fingers crossed. All right, everybody. Thanks so much. Talk to you soon. Thank you. That is all the time we have for our question and answer session, as well as our conference call. This concludes the program. Thank you all for participating.

51:22You may now disconnect.