Q2 Earnings Call

[illopp00]

I think he alluded to it without actually saying it. He said production to start at AMP-2 in early 2027 with ramp up happening in the second half, so maybe a delay of 3 to 6 months? But it's clear, if the car isn't ready they're not releasing it until it is.

It is a much simpler car compared to Gravity, they may have done the right expectation management thing and giving them opportunity to beat that time. I think no token deliveries in 2026 for sure.

For what it's worth, all the videos of the Luce actually driven and moving are pre-pro camouflaged prototypes....Point is, the Cosmos is already in similar state.

 

[GravitMe]

Silvio just stated launch of Cosmos will not happen without top quality, not a predetermined date.

 

[Bdr100]

Third time in four months, I got you beat hah! Mine was in service five times during my first four months of ownership for a total of 42 days. Next week it’ll be one year old and it’ll of been in service 7 times, going on 66 days as of today.

I am at 54 days in service and if current visit is similar to past visits, I should easily pass your 66 day total. Just stating this in case this is a competition and there are prizes for those of us with most time in service.

 

[GravitMe]

Sounds like AMP 1 will build Air, Gravity including Robotaxis while AMP 2 will produce Cosmos only as it would be inefficient to re-tool AMP 1 for Cosmos.

 

[illopp00]

Sounds like AMP 1 will build Air, Gravity including Robotaxis while AMP 2 will produce Cosmos only as it would be inefficient to re-tool AMP 1 for Cosmos.

Yep, that is what I heard, and any future technology business type capabilities, either motor licensing (mostly Atlas I would guess, BESS)...

He also said they need to reduce trim packages potential configs as far as streamlining production and improving quality.

 

[gaskiller]

In my opinion, looks like Silvio ripped the band-aid off and gave a sober and candid discussion on the current state of Lucid. In his own words, "Tough medicine first, clear ownership, fast action, and unity of effort." And the accountability will start with him

Some key points
- $1.4 billion in cash flow improvement by year end, with every program under review.
- Customer & Quality: Focus on customer pain points and on software. On their current changes to their software approach, they are already seeing positive results. On the AlixPartners, they expect the report by the end of the month.
- New sportier Gravity to be revealed in Monterey Car Week.
- Culture & Team: Simplified organizational structure and halved the number of direct CEO reports, with reduced number of committees.
- Operation reset: Uber/Nuro partnership remains on track. Kai Stepper (Chief Digital Officer) will head the new Lucid Technologies company which will handle robotaxis and AI
- AMP-2. Transitioning from construction to industrialization, with all buildings operational. Expect ready for production in early 2027, with midsize ramp up on second half of 2027.
- Midsize: Napoli has driven the latest Cosmos prototype and says it is true to the Lucid DNA and he was very impressed. Cosmos will still be the first out of AMP-2 and out of the midsize program. Midsize will launch ONLY when all process requirements are passed, not repeating past product launches.
- Outlook on 2H guidance. Not yet in position to provide production guidance


All in all, I'm quite happy that Silvio has shown he's not sugarcoating anything and he's rolled up his sleeves. I respect someone who gives hard, candid talks when necessary to give a reality check. I would not be surprised if official midsize launch will be delayed into 2027, and I respect that Napoli has emphasized that they do not intend to repeat past mistakes. A sobering and candid discussion. I respect Silvio's honesty and down-to-earth reality check, and I trust in his direction.

Anyone want to guess what Gravity they'll reveal in Monterey car week? I'm 50/50 between a Sapphire or a production version of their Gravity X concept

This is exactly what Lucid needs! I’m very very optimistic. No more rushing to meet deadlines releasing products before being ready. No more spending like they have a money tap! More accountability and more customer focused!

 

[donfenn]

I listened to the earnings call and they were all sober and candid about their situation... They now need to execute...

They also made it clear that they are not going to offer huge discounts and fat incentives to move cars. They would prefer to scale production to demand.

They made service improvements a serious bullet point. Good to hear. Of course there are other peripheral customer satisfaction issues the should address to retain current owners. The lease administration and return process with Bank of America destroys brand loyalty.

 

[Adnillien]

Sounds like AMP 1 will build Air, Gravity including Robotaxis while AMP 2 will produce Cosmos only as it would be inefficient to re-tool AMP 1 for Cosmos.

This seems odd since Lucid has been expanding AMP-1 to support midsize body in white. That expansion work was still continuing 2 weeks ago. I agree with what you heard on the call, I heard it the same way.

 

[TahoeMichael]

... I think no token deliveries in 2026 for sure. ...

Weren't we already at that point before anything said today? My impression was that they'd previously said they may start the production line before the end of the year, but they wouldn't be delivering any vehicles to customers until 2027.

 

[GravitMe]

This seems odd since Lucid has been expanding AMP-1 to support midsize body in white. That expansion work was still continuing 2 weeks ago. I agree with what you heard on the call, I heard it the same way.

They're building some of the prototypes at AMP 1, but all that will be transferred to AMP 2 by YE.

 

[GravitMe]

Weren't we already at that point before anything said today? My impression was that they'd previously said they may start the production line before the end of the year, but they wouldn't be delivering any vehicles to customers until 2027.

IMO, anything previous management has said should be discarded based on today's call.

 

[donfenn]

Yep, that is what I heard, and any future technology business type capabilities, either motor licensing (mostly Atlas I would guess, BESS)...

He also said they need to reduce trim packages potential configs as far as streamlining production and improving quality.

I listened to full presentation, but missed the comment about trim packages...

 

[TahoeMichael]

..

Anyone want to guess what Gravity they'll reveal in Monterey car week? I'm 50/50 between a Sapphire or a production version of their Gravity X concept

Lucid still has their Sapphire page up saying "Lucid Air Sapphire is just the beginning, representing the launch of an entirely new performance-focused brand within Lucid, one which ushers in a new era of performance for the electric vehicle market. Additional Sapphire models will be available for all Lucid models moving forward, continuing to set new standards for how luxury performance can look and feel." From this page. So I'm putting my bet down on a Gravity Sapphire announcement.

 

[nashvillelucid]

Sporty Gravity is such a gimme. An outdoorsy vehicle that is big enough to cart the family around is such an established market. How many wagoneers, rivians, g wagons, etc do you see in wealthy neighborhoods? Plenty of people want a mini van, I see it all the time where I live. But I see a lot more sporty suvs capable of hauling the kids around.

 

[erigion]

In the AMP-2 announcement, Lucid said they would be able to initially produce 5,000 vehicles with the ability to scale up to 150k at the location. Being only able to build 5,000 Cosmos for however long AMP-2 is stuck on their initial production capabilities feels like it would be pretty catastrophic.

Quick Googling says that the totality of Saudi Arabia manufacturing employment is 1.5 million. The US auto manufacturers alone employ 950k, and that's not including parts suppliers. I wonder how fast Lucid can increase production at AMP-2 just based on labor constraints. The AMP-1 expansion tells me that they don't expect to be able to reach that 150k figure very quickly.

For reference, BMW's plant in Hungary has already made 50k iX3s this year, possibly 100k for the full year, and then start production at their Mexico plant in 2027. Rivian says they want to produce 20-25k R2s this year. If they hit that upper figure selling only Launch editions for just under $60k, that's almost 1.5B in revenue. Lucid won't be able to survive if AMP-2 remains at that 5k production capability for any real length of time.

 

[erigion]

Sporty Gravity is such a gimme. An outdoorsy vehicle that is big enough to cart the family around is such an established market. How many wagoneers, rivians, g wagons, etc do you see in wealthy neighborhoods? Plenty of people want a mini van, I see it all the time where I live. But I see a lot more sporty suvs capable of hauling the kids around.

Far easier and cheaper to produce a faster version of the Gravity than an off-road version.

 

[nashvillelucid]

Far easier and cheaper to produce a faster version of the Gravity than an off-road version.

But how many people want a 3 row car that can go insanely fast?

 

[Northpointe]

For reference, BMW's plant in Hungary has already made 50k iX3s this year, possibly 100k for the full year, and then start production at their Mexico plant in 2027. Rivian says they want to produce 20-25k R2s this year. If they hit that upper figure selling only Launch editions for just under $60k, that's almost 1.5B in revenue. Lucid won't be able to survive if AMP-2 remains at that 5k production capability for any real length of time.

Lucid doesn't have a production problem per se, they have a demand problem. That's the sobering reality confronting the new leadership team. It's good to see the exercise of discipline around production commitments. The prior leadership team was seemingly more focused on how many Gravity's they could build quickly. In doing so they short-changed quality and over-estimated demand. As a result you end up with a lot of cash tied up in unsold vehicles, which in turn leads to incentives and discounts to move inventory. Throw half-baked software, and maxed out service centers fixing production issues into the mix, and you have the makings of a death spiral.

Conversely BMW is selling out of the iX3. Some might consider it to be an inferior product and perhaps it is. But the name of the game is matching production with demand. And Lucid was way off in its estimations on demand.

 

[Northpointe]

But how many people want a 3 row car that can go insanely fast?

I'm guessing not many. But that's not always the objective with a "halo" car. While the Sapphire Air doesn't sell in large numbers it's far easier to align production with demand as each one is built to order. I suspect that this would be the same approach taken with Gravity.

But an outdoorsy or off-road Gravity is likely not in the cards as it would likely represent a significant revision from the current vehicle. And the vehicles you cited are all built as outdoor vehicles from the ground up.

 

[gaskiller]

In the AMP-2 announcement, Lucid said they would be able to initially produce 5,000 vehicles with the ability to scale up to 150k at the location. Being only able to build 5,000 Cosmos for however long AMP-2 is stuck on their initial production capabilities feels like it would be pretty catastrophic.

Quick Googling says that the totality of Saudi Arabia manufacturing employment is 1.5 million. The US auto manufacturers alone employ 950k, and that's not including parts suppliers. I wonder how fast Lucid can increase production at AMP-2 just based on labor constraints. The AMP-1 expansion tells me that they don't expect to be able to reach that 150k figure very quickly.

For reference, BMW's plant in Hungary has already made 50k iX3s this year, possibly 100k for the full year, and then start production at their Mexico plant in 2027. Rivian says they want to produce 20-25k R2s this year. If they hit that upper figure selling only Launch editions for just under $60k, that's almost 1.5B in revenue. Lucid won't be able to survive if AMP-2 remains at that 5k production capability for any real length of time.

You have to start somewhere….so you want them to announce 150k production? You start slow and build up as you fix production bottlenecks.