Lucid Group, Inc. (LCID) Earnings Call Transcript & Summary

Good morning, everybody. Thanks for coming at this rainy morning in New York City. Very glad to have you all here. And also, hello to everybody who is joining us online, maybe good afternoon, good evening, wherever you are. So I'm so excited to share all the fantastic information that the team has put together for you today. And yes, maybe let's just get right into it. Our Investor Day is actually the first Investor Day that Lucid Motors has done is under the motto, "Accelerating to Profitability." This is our North Star really focusing on profitability. And I want to quickly walk through a couple of things that we are going to cover throughout the day. And actually, what I would like you to take away is what we have written here, what I'm sharing with you, what are the main key takeaways. First of all, we have a clear vision to be the leader in mobility technology. Second of all, we have a very, very strong existing product portfolio. Lucid Air is #1 selling EV in its segment. Gravity is off on a good start, and we obviously plan to expand on this, and we will talk about this later. Then we are launching our Midsize platform at the end of this year. Midsize is a very important platform and product for us, a big portion of our future, and that's why we actually spent most of the time today talking about Midsize and how are we making it possible that the same DNA, our compromise nothing ethos that we have established with the air and the gravity, we are also able to put into the Midsize, but at a completely different price point. Then we also talk about our strategy in autonomy, which we actually started in 2025 and which we are progressing in the future. It's a very important topic for us. I really want to emphasize, it's not a one-off where we do one deal and then move on to the next, playing a big role in that upcoming robotaxi market is a strategic endeavor for us. But it's not only -- autonomy is not only important for robotaxis, it's also important for consumers. And we're also doubling down on that and creating new revenue streams, high-margin revenue streams that we can add to our portfolio of revenue-making offerings. We are working and continue to improve our operations to be able to scale in a very affordable way and capital-light way, and we go into those details later on. Last but not least, showing you the path to profitability to cash flow positive by the late decade. So if you take nothing else away, please remind those things after you leave today. Let me start with our vision. Through technology, we are creating exceptional experiences to drive the world forward. Let me unpack this a little bit. First of all, technology. I think it's widely known that Lucid is very obsessed about technology. Some people say we're doing it a little bit too far. But that's what we are. That's what brought us where we are right now as a company, and we will not relent there. It is our ethos. This is what we are focusing on also in the future. And you hopefully see this today throughout the day. But we're not doing this only because of -- for the sake because we like to do technology. We're doing this to create exceptional experience that benefit the customer and that make customers want our vehicles or other offerings that we offer. So it's very important to say it's not a -- technology is not just a thing for itself. We do this to create exceptional experiences, drive the world forward. We always try and we actually always do push the boundaries. We don't want to do what everybody else does and stop when people say, "Oh, it can't be done." We always want to push the boundaries and drive the world forward. Let me start with our current product portfolio, the success that we have with it and how we go from there. The Lucid Air in 2025 was the #1 best-selling luxury sedan in its segment. As you can see on this chart here, we outsold everybody on the [ Visa ] EV side in our segment. And actually, we're defining this segment pretty wide, as you can see here. The ones that are on the tail end, we didn't even put on the chart. Otherwise, there would be probably 10 more on the lower end. Here's the thing. We're not only #1 in the EV segment. But in the whole segment, including all internal combustion engines vehicles, we are #3. The whole segment, luxury sedan segments, we are #3 selling vehicle -- the sedan is the #3 selling vehicle in that whole segment, which we believe actually shows that our car is not only good as an EV, but it's actually -- we personally say it's the world's best dam car. Then Gravity. Gravity is off to a good start. We ramped it up last year. And then when you compare it to other vehicles that have been introduced in the market and you look at, hey, 3 quarters after the introduction into the market, we are right there where the Rivian R1S was at that time, slightly behind the model -- Tesla Model X. But let's not forget, Tesla Model X was in a completely different time. There was no competition at that time. So off to a good start here, and we obviously want to build on this. Then awards. It's probably known by everybody that Lucid received a lot of awards. As a matter of fact, the Lucid Air and now also the Gravity have received more awards than those 4 esteemed brands that you can see here together since inception in 2022. And it's not only the air, it's also now the gravity. For instance, the one that you see, the first ones that you see here, Car and Driver 10 Best list. Gravity was now also elected to be in the 2026 Car and Driver 10 Best list for the first time. Air got the same the third time in a row. There's a little fun fact on this. Lucid is the only brand where all of their vehicles are on the 10 best list of Car and Driver. I know. I don't have that many vehicles, so that might be easier for us than others. I know. On top of that, I'm personally very proud of the one in the lower left last year for the Lucid Air Sapphire becoming the German Performance Car of the Year last year. You probably know I'm German. So very surprising for me that German journalists, not just anywhere, but 32 esteemed journalists picked the Lucid Air Sapphire as the Performance Car of the Year. Very proud of that. So this picture here shows what Lucid is today, centered around our 2 awesome vehicles. We have fantastic interior, as you can see on the upper right, a very luxurious interior, fantastic driving dynamics, traction control on the upper right, repeatedly also talked about by very -- by critics. We have built our production platform. We invested a lot in the past, which is now tapering down. We will hear about that later on. And we have awesome EV technology drive units, but also our battery packs. That's what everybody knows about Lucid, centered around Gravity and Lucid Air and about, I would say, fun to drive, thrill to drive and obviously, efficiency. So where are we going from here? Our strategy, obviously, is grounded in maximizing what we have built with Air and Gravity. And we will go throughout the day in what we're doing there and how that is progressing. On top of that, midsize, a very important new platform for us, start of production end of this year and then ramping up throughout 2027 and then in the later years. Extremely important for us, and we will talk about that in further detail. On top of that, we continue to drive forward our already pretty strong software-defined vehicle platform and software innovations, not only for the sake of innovations, but also to provide new awesome products and experiences to our customers and add new revenue streams that we haven't had in the past. Last but not least, as I mentioned in the beginning, the robotaxi space is strategic for us, and we aim to lead in that space and have a big portion of that market. So scaling is very important for an automotive manufacturer. When you look at the Air and the Gravity in the lower right, the market that we are looking at right now in the countries that we are in or which we are expanding into, we're looking at a $40 billion total addressable market. With adding the Midsize platform, we're going from $40 billion, almost 10x higher to $350 billion. And if you then add on top of that, the robotaxi market, which is there are different estimations how big it is going to be, ranks somewhere between $300 billion and more than $1 trillion. We just want to stay on the low side. That's why we just used the $300 billion. And -- but we're adding that. And as you can see, it almost doubles then our addressable market compared to what we're doing with our personal owned vehicles. Why is scaling so important? And why is growing into midsized so important? Well, when you look here on that slide, on the left-hand side, you see last year's Gravity unit cost. Let's take that as 100%. If you look at our projected unit cost for the Midsize in 2028, we see a reduction of 60% to 70% right now. So a dramatic reduction of unit costs for the Midsize, which you would assume because it also comes at a lower price point, which we'll talk about later as well. But that's not the only thing. It's not only about midsize, it's also about the rest of our portfolio because that scaling, that efficiency gain also allows us to reduce the unit cost of the Gravity, which is shown here right now by 30% to 40% and also the Air, obviously. So for the whole business, scaling drastically changes the unit economics. That's what we're working on, and that's why we are pushing forward with the Midsize so much. And we have some very interesting details about that later in the presentation. It's not only about the material cost, it's also about manufacturing efficiency. And we're working very hard, and you have seen in last year that after -- in the beginning, a little bit slower ramp-up that we were hoping for of the Gravity, we were basically creating a hockey stick in Q4, doubling our production from Q3 to Q4. And for the total year, we doubled our overall production. And we did that because we really focused very much on improvements on our supply chain, as you all remember, 2025 was probably the worst year for supply chain, I can remember with all of the things that happened, talking about additional tariffs, talking about magnets, talking about other issues like fires in aluminum plants. And at the end, then we had issues about the chips availability. So a lot of things went in the wrong direction, but we overcame them. And we also were able, from the beginning of 2025 to the end of 2025, to really drive down already the BOM cost of the Gravity by 25%. On the production, I just mentioned, almost doubled the production throughout the year and also significantly decreased the gravity production cost, which is now also continuing, as I just showed you on that -- on the slide. On the quality, actually going back a little bit longer, since we started with the Lucid Air, we drove down our warranty cost by 85%. That's another big topic of us for cost reduction. When it comes to supply chain, we obviously have still work to do. I mean one big thing, for instance, right now, the way it looks, those external disruptions don't seem to slow down. Therefore, we are rethinking and reworking our supply chain to make sure that we are even more insulated from external shocks. And obviously, we are in a very good position with our bill of material costs right now with the Midsize. We need to land that the last little bit that is missing, stay there and then get into production with the Midsize. Then I would like to talk about software, software innovations. We have tons of software in our vehicle. Much of it is actually not necessarily visible to the eye. When you look here on the lower part of that slide, these are all things like traction control, our driving dynamics, our efficiency that leads to our enormous range, fast charging, all these things are enabled. Obviously, there's hardware involved, but it only gets as far as we get it because of fantastic software. And then we have what the [ IC ], which is the infotainment here with, for instance, with the new -- with the Gravity, we have our new UX 3.0. We have Surreal Sound Pro, which I'm a very big fan of. I think I talk about a lot and everybody knows that. And we have also CarPlay in the Air and Android Auto. Then you also see then when you look at our ADAS features, our DreamDrive Pro, you obviously see a little bit the vehicles driving around in the display. But the biggest portion of that technology is under the hood. Again, a lot of software. So we know though that when people look at software, what they talk about is very often, hey, that's what I see. And we do a lot of things now to make it also clearer and provide new offerings to our customers on the visible piece. Let me tell you a couple of information about that. Today -- actually yesterday, yesterday, we announced that we are now rolling out CarPlay into our Gravity vehicles. So over the next couple of days and then globally weeks, all existing owners will get an update, which then has CarPlay or Android Auto built in. We're also launching an intelligent AI assistant. You will hear more and see more about that later today. We're bringing hands-free driving, which we already have in the Lucid Air into the Gravity in Q2. We're bringing back the new user interface that we have in the Gravity back into the Air in the existing vehicles in summer. We also launched digital key in the Lucid Gravity in summer. And by the end of the year, we will have in-city hands-free driving in city and in the Gravity. We also have a new product coming, which we'll talk about later, Vehicle-to-Home. That's maybe something for a later event. So a lot of things are going to come into our vehicles, into our existing vehicles and in our new vehicles that are very visible for customers. And actually, several of those, including CarPlay, ones that customers are banging our door at. Why is it not there yet? It's there starting right now. And I tried it, I used it, works perfectly. So going to autonomy, as I said in the beginning, very, very important for us. And it's a new addressable market for vehicles, but it's also a new addressable market for revenue -- software revenue that we are embarking on. How are we doing that? Well, first of all, we obviously start with our L4-ready vehicles, and we will hear about this throughout the day. Also the efficiency that we have, the efficiency leadership helps us, particularly in the robotaxi market, where cost of operations is actually a very important topic, even more important than the purchase price or the cost of the actual vehicle in the beginning. We are working with best-in-class partners in order to do all this with a very capital-efficient approach. As I mentioned, not only at this Investor Day, but right now, Lucid is accelerating to profitability. And therefore, we want to do everything that we do in a way that is capital efficient and at the same time, provides exceptional experience to our customers. That's why we are partnering on autonomy, and that's why we are not spending as much capital as others may do or are about to do. And last but not least, I already said that it's not only about robotaxis, it's also about providing this to our consumer vehicles as something that you could compare as FSD or better. What does this mean? What does this lead us to? So Lucid Tomorrow. In the middle here of the slide, you still see our vehicles. Nothing is changing here. We're still grounded on our awesome vehicles, our compromise nothing approach when it comes to the traditional vehicle attributes will continue, but we add much more around the software, around user interfaces. You will see later on first hints of our UX 4.0 that really takes our user interface to the next level. We will have more robotaxis than what we have already announced in the future. We have an AI assistant, and we will have an even more productive environment on the manufacturing side, all to, in the end, become profitable. So as I just said, the core is the same. We're playing in a much bigger TAM. We're adding our software capabilities and making actually money with that. L4 is our North Star to get there as fast as possible and in the end, be a profitable company and cash flow positive. So with all that, I would now like to hand over to my colleague, Erwin, our Senior Vice President of Global Revenue, to take you -- tell you more about how we are continuing with Air and Gravity before we then later on go into Midsize. Erwin.

Thank you, Marc. Thank you, and thank all of you for coming out today, and thank you in the listening audience online as well. I'm really excited about the opportunity to talk to you about what we've been doing, how we got here and where we're going in the future. So today, I'm going to tell you a story. I'm going to tell you a story about Lucid Air and what we've done to get here, how we're growing Lucid Air, how we launched Gravity and scaled Gravity with a magnificent growth in Q4, and then I'm going to talk to you about our distribution network. We've got to deliver these vehicles. So we're growing our distribution network around the world. There's 42 new locations around the world. And then I'll land on this new diversified revenue source. It's $1 billion of revenue, but I really like it. I'll tell you why I like it in a little bit. For Lucid Air, Marc already spoke about the fact that this vehicle was the most awarded vehicle since inception. It's great for us that it's been growing like it has consecutively year-over-year, last year, ending up #1 in its segment, but it's not just that we're #1 in our segment for last year in the EV segment, 6 consecutive quarters leading its EV segment. And last -- Q3 to Q4, that growth is 23% in volume and 30% in market share, really solidifying our position. We're going to continue growing that position. I'm excited about that. And then we launched Gravity and started scaling Gravity. And you can see from Q3 to Q4, 4x growth in Gravity deliveries, really excited about that, positioning us well for continued growth with this vehicle already winning awards. Gravity has started -- gotten off to a really good start for us. One of the reasons I like Gravity is because 80% of the customers coming into Gravity are actually new to Lucid. So we're growing. We're expanding our attainable market, and I like that. The other thing I like about this is that 28% of the conquest in the Gravity are coming from non-SUV segments. So I'd like to say we're actually growing the SUV segment with this vehicle that's not just the best EV on the planet, it's the best dam car. And don't listen to us. Let's look at what some of the critics and our writers in the industry and outside have had to say. MotorTrend said, this is the best -- as good as an EV SUV gets. And I actually think the EV was a typo. I think they meant to say it's as good as an SUV gets. And if so, I agree with them. This is literally as good as an SUV gets. And then Esquire, we won the 2026 Car of the Year, said the car defies the laws of physics. And it's true. Who would have thought that an SUV that carries 7 people and their luggage can also get 450 miles of range on a single charge. And oh, by the way, outperform sports cars on the straightaway and around curves and in every other way. And oh, by the way, still maintain the maneuverability that we love in parking. It does things that shouldn't be possible. That's defying the laws of physics. And then I really like TechCrunch because they highlight how our brand and our brand promise comes to life. compromise nothing. In their first Gravity test drive, TechCrunch says, it's an electric SUV that doesn't make compromise. I love it when we work and we put our hearts and soul into our promise, and that promise is appreciated. But don't just listen to us. Of course, I'm the SVP of Global Revenue, I'll tell you that. But I want you to listen to somebody else. This is one of the most popular tech reviewers on the planet, not a car guy, a tech reviewer just happens to love cars. And so when we heard that he test drove our Air, I, of course, was very interested in hearing what he had to say. And what he was going to tell his 20 million followers who have looked at his videos billions of times. Let's listen to what Marques Brownlee has to say. [Presentation]

That's pretty cool. I was excited about that. And when I thought it couldn't get any better, I heard he also drove a Gravity. Here's what he had to say about the Gravity. [Presentation]

Thank you. The only thing he didn't say was otherworldly. I mean this thing is unbelievable. I know the EV industry has been seeing some headwinds. You know that. I know that I'm not going to shy away from it. The reality is we're still very bullish. And globally, we have good reasons to be bullish. When we look at the S&P Mobility forecast for the growth of EVs globally, excluding China, if China were included, this would be a much bigger number. But look at the growth at the darker portions of the bars. This is from 2025 to 2035, 15% compound annual growth rate. That's stunning. And by the way, that's when the gas-powered cars over that period will be declining. We are growing. Our segment is growing. Our industry is growing. We're very bullish, 3.5x in the next 10 years. So why would you believe these numbers? I know you see a lot of forecasts out there. Think about this. Whenever there's new technology, there's this hype, this technology hype, and there's a hype curve out there where everybody gets excited about the new technology. They don't know what it is, but they want one. And then they begin questioning themselves and then they chase after some new shiny object. But as the traction takes and people realize that in this case, the EV makes a lot of sense. They don't have to go to gas stations and smelling up their hands or stand in a dark gas station getting gas at night. They can just plug it at home. And oh, by the way, the cost of ownership is so much lower and the performance is instantaneous. And oh, by the way, it's the only thing robotaxis will work on. And these vehicles get better with time every day. As a matter of fact, I'm downloading software on mine right now. So right as I speak, like any other great investment, my investment is increasing in value as it gets better. That's why we believe this will go. So let's overlay the hype cycle over the S&P data. And it matches almost exactly. We're just at the bottom of what we call the trough of disillusionment as we begin to grow and get traction and growing -- and globally, we're going to grow. We're going to continue to grow, and I'll explain to you why in a few slides. But we've also had some industry tailwinds. Recently, you might have heard that one of our competitors who will not be mentioned, announced that they're going to cancel production of the Model S and Model X. And there's 350,000 of those vehicles in the car park in the United States. We're going to help those people learn about Lucid and learn that they can upgrade just like Marques told us, from their Tesla into a Lucid. And this is happening every day. How do I know that? Well, for people trading in their Tesla Model X, Lucid Air is the #1 vehicle they go to and not by a little bit, by a factor of 2x versus their next choice. We are the obvious choice. And Gravity is following in precisely the same footsteps. Gravity is also the #1 choice of customers trading out of a Model X. So we're already there. We are confident that we're going to get more than our fair share of that car park. In order to do that, we have to scale production. And last year, we started scaling production, as you know, the second half of the year. The dark bars represent our scaling throughout the year. And you can see here that by September, we had already achieved the run rate required to hit our initial 2025 targets. And by November and December, we got to the 2026 rate. So we've proven that we could scale. We're scaling production, and we'll be able to deliver. In order to deliver these vehicles, however, we need a distribution network. We need a global distribution network. And this map represents where we are today, the United States, 4 countries in Europe and the Middle East, with the white dots being where we are currently. And now you can see where we're going to be in just this year, in 2026. We're adding 7 new locations in the United States, which, by the way, happens to be 15% more than we have now. It's that same compound annual growth rate. And I found it interesting that the growth rate of electrical charging infrastructure is also 15%. So there's some truth here, and there's some consistency. So adding these 7 locations in North America this year is going to help position us not just to deliver this year, but to position us for midsize and the good things we're going to do with that product, you'll hear about a little later. We're adding 10 new locations in the Middle East and 25 in Europe, including all of these countries in the lighter gray. We're going into Europe. Why are we so bullish in Europe? Well, the EV adoption rate in North America by the end of this year will still be just 8%. In Europe, it will be 20%. We need to be in that market. We need to grow in that market. We need to succeed in that market. And so we're focusing there with a 200% increase in our distribution network. And in particular, in Europe -- there we go. Yes, in particular in Europe, you can see the countries that we're in. 7 new countries will be represented this year. We already have, in fact, late-stage LOIs for these 7 countries for these 25 locations. Germany is particularly interesting, as Marc spoke about the German Performance Car of the Year being our Lucid Air Sapphire designed, engineered and built here in America. I absolutely love it. But we're going to be in Germany. We already have 2 locations identified and we're moving in. And then we've got 10 other locations with late-stage LOIs. So we're really going to double down in the German market as part of the broader European operation. Our distribution network looks a little different here than it does there. And I'm going to explain that. In North America, we have enjoyed really favorable retail economics. By going directly to consumer, we cut out the middleman. And the middleman has got to get paid. So why not pay ourselves, right? We're going to retain that. But more importantly, we will retain the relationship between us and our customers from discovery the shopping, the acquisition, ownership and service and then reacquisition. And oh, by the way, this recurring revenue from software, we 100% want to retain that relationship, especially as we grow. This is the heart and soul of our brand, and we need to make sure that we deploy our culture and the Lucid brand properly here. Now in Europe and the rest of the world, we have other challenges. We need to scale quickly. We're just scratching the surface in Europe. So we need to scale quickly, and we need to do it in a capital-efficient way. And so we're engaging partners. So we have more of an indirect model in Europe that allows us to pull ahead our growth of our network by up to a full year with 85% less upfront capital. That's smart growth, it's intentional and it's demand driven. And that's why we're taking a different approach in Europe. I started out telling you about additional diversification of our revenue streams. And I love new revenue streams. This $1 billion opportunity, I know $1 billion in and of itself, well, I'll take it. But I really like it because when I look at the sources of the $1 billion, that gold bar is gold for a reason. In fact, it's gold for 3 reasons. One is that's where the money is, okay? Secondly, this is really high-quality revenue, very high margin. As you can imagine, there's not a lot of cost in maintaining that software once it's developed. But because we codevelop our software with our hardware and we can do so much in controlling the vehicles, it's valued by the customers. And this gives us an opportunity to monetize this and it's recurring revenue. So I love recurring revenue. And the third is it's growing. As we grow, it's going to grow, not only because our car park grows, but also because the value we provide to our customers continues to grow. So it's golden for a reason. This is going to help diversify our revenue, and I love what this is doing for us. You'll hear a lot more about that in a little bit. I'll give you a little bit of a tease right now. We already told you that the Lucid Air and Gravity are the most technologically advanced products on the road today. And you can see a lot of the technology that's on here. Don't worry, I won't go through every detail. There's too much. This is just scratching the surface. But in 2026 alone, look, we're adding the UI/UX 3.0 for Gravity in the air. We've got this Lucid AI assistant that you will hear about and see very soon, and that's going to be in Air and Gravity along with Vehicle-to-Home backup, just all kinds of goodness. And Gravity has got even more. And we're already in 2027. This is just what we've identified and committed to for 2027 and beyond. So I like to say like fine wine, our cars literally get better with time. The longer you own them, the better they get. And this is what we're after. 95% of the functionality of our vehicles are upgradable by software, 95%. Think about that. Last year alone, in 12 months, we had 13 over-the-air updates. That's a lot more than the industry average, which is 2. We had 13 last year. And we're going to continue making our cars better and better. Now we know that our customers absolutely love our ADAS and other software options because the adoption rate is already at the high end of -- Air is at the high end of the industry average of 10% to 40%. Air is already at 40%. And Gravity is at 65%, over 50% more than the high end of the industry average. This is very powerful. This is going to help us monetize our software, diversify our revenue and continue making our products better for our customers. So I've just told you about our Lucid Air and Gravity and how we've demonstrated market leadership and we'll continue to grow and do that. I showed you that we've proven our ability to scale production and deliveries and how we're growing our distribution network and expanding globally. And finally, the diversification of this very high-quality revenue. This is going to position us well not only for this year with the products we have, but will position us well for the future with our Midsize product and beyond. Speaking of Midsize product, please allow me to introduce you to our Senior Vice President of Design and Brand, Mr. Derek Jenkins.

Thank you. Thank you, Erwin. Good morning, everybody. Thank you for joining us bright and early today. It's really, really appreciated. I am so proud to be able to say I've been working at Lucid for over 10 years, taking us all the way back to 2015. It has been a journey, quite a journey, a very exciting one. That was when we really kicked off the mission, the innovation that Marc talked about earlier. And I think that's really set us on such an exciting path all the way through the creation of air through the creation and production of Gravity all the way to this point today, which is so exciting. Today, we're going to talk about Midsize, and this is a big deal for us. I've been working on the Midsize together with my colleagues in engineering and planning for 2.5 years now, and it takes that long to really create something special. And what is so incredible and so special about Midsize is it represents a tenfold increase in total addressable market. This is a huge step for us, but we're also maintaining the key DNA that people know about Lucid that is so celebrated by our industry experts. It's also going to be at an accessible price point that is designed to scale. We're taking our volume to the next level, all the while cutting our costs by up to 70%. This is a big deal for us. It's a big step for Lucid as a company and our core philosophies, taking this to the new level. Now we started 10 years ago with Lucid Air and Lucid Gravity with a clean sheet to really create the most innovative EVs or even the most innovative vehicles in the world. And I really think we've done that with Air and Gravity, where we've really established ourselves as key players in the luxury category with advancements in space packaging, range and efficiency, performance and of course, design. We're very proud of our design. And of course, I would say that is ahead of design. But I feel it's true. I think we really are about the future, and we bring the future to people every single day. But with Midsize, it's really about that next step in the marketplace. How are we going to win? Well, it's going to start with not just one vehicle, not just 2 vehicles, but 3 distinct products. Listen, the Midsize category is very competitive. It's a very diverse consumer segment, and we think these 3 unique products will give us maximum opportunity to hit the widest audience possible. And that audience is, as I mentioned, tenfold of where we are today, but it's a different audience than our current market. It's very price sensitive. It's very value sensitive. And we've taken that very, very serious. Now today's customer target represents about 10% of the market. It's that very desirable luxury category. And as Erwin pointed out, we do very, very well there with Air and Gravity. But if we're honest, it's a relatively small category. It's a very desirable group, tech savvy, mature EV owners, and they love their Lucid and we become the product of choice for them in that category. But as we look forward to the future, we have done our homework. We've found our key categories that we're targeting, and there are 3. From the left side, we have our upscale nurtures, they tend to be more family oriented. They tend to be more technology savvy, and they really are adapting to EV quickly. The secondary category is our trendsetting achievers. They tend to be both urban as well a little bit more adventurous and outgoing on the weekends. But most importantly, they like a very, very expressive advanced design. And thirdly, our active explorers. They like advanced technology and experiences, but they're a little bit more outdoorsy. They need more functionality in space. And of course, design is still a big, big priority. These 3 new categories represent a target of up to 50% of the EV segment. So the combination of our 10% existing EV target, our 50% new target means we will be targeting 60% of the coveted EV market. The first of those products will be called Lucid Cosmos. This is going to be -- yes, this will be our first product, very excited about this. And the second product will be called Lucid Earth. So we have Air, Gravity, Cosmos and Earth. There's kind of a theme there, right? How did that happen? Who came up with that? And of course, the third product, well, you're going to have to stay for -- maybe it's our next investor meeting, I don't know, but that's the third product. Now why is this so important? Why are these 3 products so critical? Well, it's about the positioning of these products in the marketplace. As I mentioned earlier, the Midsize category is very dense. It's very competitive, and it's diverse. It's a diverse customer segment. So on the left side, we're targeting folks that, again, want a more sporty vehicle. I always say a future-facing vehicle, more dynamic product, and we're very well positioned with Cosmos there. In the middle, it's the in betweeners. It's the product that is still sleek, it's efficient. It's fun to drive. It's spacious, but also it's a little bit more rugged, a little bit more capable. And then on the right, maybe it's a little bit more traditional, still future, but it's more spacious and definitely more geared towards an outdoors experience. And we've positioned ourselves really, really well for the diversity that exists on the global stage with these 3 products. Now we've done a ton of research about our customers, and we talk to them about what are their priorities as a design box, of course, design and emotion and experience is extremely important. The overall look and feel of the car inside and out has to be exceptional, sophisticated, modern, crisp, clean and emotional. But it's not only that. It has to be functional. It has to have the space and the utility for people, gear, stuff, pets, you name it. It all has to fit in. They demand that. And our designs will deliver as they do today at a value, at a great price point. What's next? Of course, range. Range and efficiency, we are the leaders. We do this so well, and that is right up there with the top purchase consideration for folks in this category. That is a fact, and we obsess about this, and Emad and Zach will come up in a minute to tell you exactly how we're achieving that and how we're going to do it at scale at that coveted price point. Third, performance. Lucids are fun to drive. It's a fact. They're a blast. And we get that time and time again. I love driving my Lucids and we're going to bring all that thrill, all that experience and emotion, dynamic, not just 0 to 60 times, although we do that great, but it's the steering dynamics. It's the braking. It's the way the car stays so solid and so planted on the road. We do that so well. The experience. The digital experience is an obsession, especially right now. We've taken big steps. You saw the improvements, our OTAs that have been happening with Air and Gravity. We're going to take with Lucid UX 4.0, we're going to take that to the next level with the Midsize program. And all of this is going to be done at an accessible price point and bring that value to consumers. So through that research for the customers, we actually showed them our vehicles. We shared with them the price point, the feature set, the metrics. And you know what? This was also, by the way, against a wide range of the top peer players in the category, both at the low end of the market to the high end of the market. That sweet spot where we're going to play. And guess what, we blew the competition away every single time, #1 in exterior design, #1 in interior design, #1 in specifications and #1 at our claimed price point and value proposition. And I love the quotes off to the side. It was the best-looking car, looks like the Jetson, right? I grew up with that, okay. I'm sorry. I'm dating myself. But it's about the future, right? We can still be optimistic about the future, and we're going to deliver on that. So the design itself -- this is a big opportunity, especially for us in the design department because we created Air and Gravity with a consistent DNA look and feel. With the Midsize program, we really wanted to evolve that. We wanted to mature it, but we also wanted to put even more emotion into the products. And I think we've really done that. It starts with a very sleek emotional silhouette, really concentrating on enhancing the dynamics of the vehicle. We put more movement, more muscle, more sportiness. We give the car that planted stance, the car sits so well on the wheels, and I think people are going to see that. They are a more emotional product, and it's really going to stand out in the category. Cargo. Through our miniaturization of our components, we repackage the interior, the layout, optimize space inside the vehicle, optimize cargo areas. We will be the space leader in our category. And that's so important because we're making the car oversized on the interior while keeping the outside of the car lean and sleek and compact dynamic sporty and aerodynamic. So important. We are going to have class-leading aerodynamics, a drag coefficient below 0.22, that might not mean anything to some of you, but that's really, really hard to achieve. I'm not going to lie there are days where I curse the aerodynamics team, but we work together and we solve it and we get those numbers. It's true. You know it. We've been there, but it is important. It's the design really validating itself making the car look great and work well, that's design. And the aerodynamics will deliver and that will support our range target. Now on the inside of the vehicle. Hopefully, you're familiar with Lucid Gravity. We took a big step forward with this layout. We call it the ClearView cockpit. We position the display higher in the vehicle, just below your line of sight of the road. This is good for safety, for viewing both the road in front of you as well as the content on the screen safely, reduce latency. And we reshaped the steering wheel, so you see the screen uninterrupted, and this is the ClearView cockpit. We've taken that and evolved that on the Midsize. We've moved to one single screen placed up high, 36 inches, and this is dedicated to both driver and passenger alike. And that's a big deal because we create a more unified space, a more social space, and this is something that we've really brought as a theme into the Midsize program and that allows the driver and passenger to have their own unique experience. All right, I'm going to go back one. And we kept the physical controls, of course, to be able to control fan speed, temperature, volume in the middle, keeping our tactile feeling on the steering wheel so we can control screen and features alike and brace yourself for this one, mechanical analog door handles, okay? Inside and outside the vehicle. What a time to be alive. The future is now. Okay. I'm joking, but they are pretty cool. So feature-wise, we're focused in 4 key categories with 4.0. Energy. We have some very unique applications that are basically widgets that help you understand the efficiency of the vehicle, how your driving dynamic affects your range and just inform you so you don't have that range anxiety. We put so much effort in making the car go far on as little as possible. We want the drivers to be informed and understand that. And this is something that we're continuing to work on, on the user experience team to come up with features and display items that really inform the driver. Next-gen navigation, this is going to be about a more 3-dimensional navigation experience, better way finding, and it's also going to be better turn by turn. We're working to layer the turn-by-turn navigation experience over our ADAS representation. So that's going to be super, super exciting. Entertainment and productivity. Erwin talked about this a little bit. This is really about applications coming inside the car in areas of streaming content, productivity, even gaming. And lastly, natural interactions. Obviously, we're living in a world of AI accelerating innovation and natural voice is going to be at the very center of the driving experience for Lucid going forward. Speaking of which, our AI assistant, we're all super excited about this. The team has been hard at work at it. And I think we've really hit it out of the box with the Lucid Intelligence AI experience. It's agentic. This can literally plan your day out for you, whether you do it in the car or do it on your phone prior to your trip. It can think through a plan for your day, can ask it simple things, you can ask it complex things, but it can think through it and give you recommendations. It's personalized. It learns what you like and don't like over time. It becomes your mobility partner, your friend, and it can optimize your mobility experience through personally knowing you. It's seamless, both when it's computing just on the edge inside the car. Well, it's the same when it's computing in the cloud. And so that experience is very seamless. It's not changing from one assistant to another assistant, which is so common in the marketplace today. And maybe most important with the rapid changing industry, it's language model agnostic, meaning we can work off of any language model. We're not dedicated to one single language model. And it's a very dynamic world out there right now. The news changes on a daily basis. We need that flexibility, and we need to be agnostic. So with that, I would like to first talk about the personality because the personality is quite exciting. We put a lot of work to really brand Lucid, brand the experience inside the car, whether you want a personality that's more laid back and chill and easy going or perhaps the other end of the spectrum, one that's more direct and just gets down to business and gives you the information you need or perhaps something balanced right in the middle. This is, again, something that can grow over time, and we're really going to evolve this idea of personality inside the vehicle. So to give you an example of that experience that we're talking about, I'm looking at you, Dave. Dave is here. Dave is our Head of User Experience and has been at the center of developing our Lucid Intelligence assistant. And he's going to give you a demo of that right now. Dave, take it away, if you can hear me. [Presentation]

Just a small example. And that's -- even though that's a video, it's not stage. Super exciting. I'm guilty probably more than most of looking stuff up on my phone while I'm driving. I mean you literally could go buy a drill from Home Depot with using this. And we've actually played with that, and Dave's had a lot of fun with it, but we're super excited about it. And trust me, it does work much better than that outside. Before I hand off to my engineering colleagues, I just want to leave you with one thought. Lucid is in a very, very unique position as a brand, and it's really based on kind of the values of the company that Marc and Erwin talked about earlier. We're in a unique position. If you think about the traditional brands, the storied brands in the world that we all have the most respect for, they tend to focus on traditional automotive attributes and excellence. I'm talking about ride and handling, performance, comfort features, design, these traditional elements that have evolved over 100 years and modern automobile is quite impressive as a result. And then you consider the traditional players, the new -- sorry, the new players, whether that be our fellow start-ups or even our competition from China, focusing more on advanced technologies, ADAS, connected experiences, aspects of EV. They do that well. Lucid is rare. We're able to compete at the highest level with the storied brands on those traditional attributes, true excellence at what makes a solid car great. At the same time, we're competing at the highest level on the new world technologies in ADAS, connected experience and cutting edge with EV efficiency and performance packaging, et cetera. Very few companies can claim to live at the intersection of those 2 worlds. In fact, I would say nobody else can say that like Lucid. That is what's going to give us the edge when we come down into that coveted Midsize segment because we're going to do it like we've done it with Air and Gravity at an awesome price point. So with that, I'm going to hand off to my colleagues, Emad Dlala, our SVP of Engineering and Software; and Zach Walker, Chief Engineer of Midsize.

Thank you very much, Derek. Welcome, everyone. So every time Derek talks about Midsize, my excitement level goes up so high. And why not? It should. Because Midsize is really a pivotal moment of Lucid in many ways. And today, I'm going to talk how we're able to deliver that amazing experience that Derek just showed us at scale and at that accessible price point. So like Derek, 10 years ago, I joined Lucid. And the first thing I was asked is to design the most efficient car, the most powerful and the most spacious. And I said, maybe that breaks the laws of physics. So I stayed humble, working with the team, including Derek, Zach and many of us here to try to approach the laws of physics smartly, not break them. And yes, efficiency was the #1 priority in that list. And this graph shows the result of that mission and that drive, which turned out to be truly rewarding. Efficiency is important because it defines the size of the battery. It defines how battery energy is converted into mileage driven. And this chart, in particular, shows 15% of greater efficiency achieved through Lucid Air compared to its best competitors in production today, including a known U.S. leader. This efficiency, as I mentioned, is important. And the question is, how are we able to achieve that? And why it's been so hard to replicate. As the graph showed, we have over 5 years of an advantage over the competitors, and that gap is widening. And my answer to that, most companies optimize a subsystem or one subsystem at a time. And that's actually a great way to make the vehicle a failure to lose the whole vehicle, because at Lucid, we obsess with the system, the entire system, not a subsystem. And that relentless pursuit of excellence across the vehicle, the systems, any system that dissipates energy in the vehicle from drive units, our Zeus drive unit in Air and Gravity set the standards in every metric possible, efficiency, power density, torque density, speed in all EVs globally. Our energy density in the battery set a technological benchmark, and combined with our software focus, as Marc mentioned earlier, the underlying secret sauce that connects and fuses all these systems together and make them work in harmony. So I want to come back to the point of efficiency just for a second. As I said, efficiency defines the battery size. Why? Because it's directly linked to the miles driven. And this is truly a foundational cost lever. So our folks and efficiency are driven by economics, not just by to make the best dam vehicle, true, that's also super desirable. We know that, but also to make the vehicle affordable. And today, of course, I'm still talking about Air and Gravity just to set the stage to Midsize, and what has been truly distinctive, as I mentioned earlier, is fusing range efficiency with performance. We didn't trade these away. We made them coexist together, blending comfort, acceleration, range, handling in one single vehicle. The Lucid Air grand touring today achieves over 512 miles of range with 819 horsepower. It's the only sedan that sets the standard. And that's not a coincidence. That's a pursuit of science at every level. And we deliver all of that while we still have best-in-class exceptional interior space. And that space is not accidental. It's super intentional, and it's engineered in the vehicle because we achieve it through not making the vehicle -- not by making the vehicle larger, but by making the technology smaller. Our drive units are super compact, power dense. Our battery backs are super energy dense. And so there is every system, the cooling systems, the body in white, the chassis, all designed intentionally to be super efficient. So now I'm sure many of you wonder, will Midsize live up to Air and Gravity? Will Midsize deliver the award-winning excellence as Air and Gravity? And at what price point? And the answer is yes. Cosmos and Earth preserve Lucid DNA, uphold fully the Lucid DNA in energy, performance and space, completely redesigned our systems, building in our promise of technology that has been realized in Air and Gravity to take Midsize to the next level. It's so many years of hard work leading to a platform. This is a platform that's used across the differentiated products that Derek just shared. And how are we able to achieve these attributes? Again, we leaned in our philosophy approach, scientific approach, designing every system holistically as one single system and meticulously innovate and optimize across all engineering domains from the drive unit, which I will speak about more in detail in a minute, the high-voltage battery system that Zach will elaborate on in a minute, our bidirectional charging systems, centralized low-voltage electronics or zonal architecture. And of course, super aerodynamics, Derek's pain. Now how do we achieve these attributes? I'm incredibly excited to reveal Atlas, our next-generation drive unit that has been entirely designed in-house and will be manufactured in-house as our previous generation of drive unit, which we call Zeus. So what's different about Atlas? When I joined in 2015, I was able to use our talented team to design that technology. But no matter how talented the team is assembled for the first time, we evolve it and of course, with a new aim and goal and scale level in Midsize. Atlas designed from day 1, low cost, high volume that results in a materially lower BOM cost, lighter, fewer parts. So Atlas isn't just a drive in it. It's a mindset. It's a shift in our mindset. So you can ask now what and how we measure the superiority of that Atlas drive unit. One of the best ways to measure that is through power-to-weight ratio criteria or metric. This metric is important because it's a key that impacts energy efficiency because that would mean you would use less material and it would also impact, of course, vehicle mass and space. Comparing against the best over there, we have astonishingly 40% higher power density in the most cost-conscious drive unit in the wallet. So where does this feed to? Ultimately, this feeds to the most important criteria in an EV. Take it from me, technical criteria in an EV, which is energy efficiency. Again, it means or directly linked to the battery size, which is the most expensive part in an EV. And I'm super thrilled to say that again, our new platform for the Midsize is going to be class leading in efficiency with projected over 10% greater efficiency compared to the most optimized and the newest, most optimized platforms in the world, including the U.S. leader of EVs, German and Chinese leader that everyone these days is talking about. So let me take a step back. So if Midsize is capable of matching Air and Gravity DNA, how do the economics work? The answer is radical efficiency. It's truly not a buzzword. It's a philosophy, it's a set of principles that we adopted at Lucid to be able to keep the Lucid DNA in energy performance and space, but expand on that with software and manufacturing efficiency. Software first, design for manufacturing mindset was [indiscernible] for Midsize. And eventually, engineering-led companies win as the head of engineering, I would say that. I'm truly sure because the right engineering decisions determine everything downstream in the product, cost, scale, and that's exactly how we designed Midsize and build it to deliver excellent product at a lower or very low price point or low cost and thirdly, at scale, all together, combined together, not choosing one, all of them. Now I want to bring Zach to the stage to give you examples of these innovations and share with you much more cool stuff.

So efficiency. Fundamentally, this means doing more with less. Radical efficiency means doing more for the customer and giving them product superiority but requiring less from our business and leading to a cost efficiency. This is radical efficiency. This is embedded in everything we are. This is what the midsized architecture was built on. Everything was about radical efficiency, the battery, the body, the drive units, the architecture. Radical efficiency defines everything we do. So what I'm going to do is I'm going to take you through 5 of these points and talk through how radical efficiency led to product superiority and cost efficiency for our business. So first, we are going to talk about energy efficiency, one of the first big pillars. And we're going to talk about the battery. So when we talk about the battery, this is the Midsize battery. And as you see, a Gravity is going to appear, and our architecture is going to come next to it. But you'll see there is multiple components that we built throughout Gravity that all merge into one. This one component is then assembled to the battery. So we have a singular high-voltage system. This joined up thinking this way to merge it all together leads to one product superiority. We still -- our superior product when it comes to charging. We still have all the features that we've talked about, vehicle to vehicle, vehicle to home, but we didn't throw money at the problem. You see radical efficiency leads to cost efficiency. When we talk about non-cell parts that is an 80% reduction in components. And all of that is one system that you can build offline and make into the full vehicle. And then when we talk about those same parts that is a 45% reduction in cost compared to Gravity. We're going to compare to Gravity a lot, and Gravity was already an engineering marvel. What we're showing here is why Midsize will be mind-blowing when we do radical efficiency. So what do we talk about with energy efficiency. I think the numbers that Emad shows can really go over a lot of people's heads when we talk about miles per kilowatt hour. So I'm going to give a reference. We're going to talk about the fact that when we go 300 miles, our vehicle, the Cosmos requires 69-kilowatt hours. That is not our overall range, but I'm just giving you a range of 300 miles, how much energy that takes us. But when you compare to others, that same 300 miles which is the same distance traveled, requires some 73, 82, 86, that is $2,000 extra dollars the customer has to pay for and get no extra value. Who likes to give away $2,000. There's no point in that where does it go? You get nothing. Radical efficiency leads to product superiority because we can give the customer more for less to us. But it doesn't stop there. Let's keep going. Let's look at the factory. Again, Air and Gravity are a marvel, but we've gone further. When you look at the left, you'll see the factory for the battery for Air and Gravity. But Midsize was miniaturized. We reduced the components. We reduced the requirements on our business. We reduced the factory itself. By doing that, we can reduce the square footage by 40%, while achieving a higher output while also reducing our labor and overhead by 50%. This is radical efficiency when we talk about the pillar of energy efficiency. Now we're going to talk about the drive unit, the amazing DNA, the thing we all love about Air and Gravity of the driving enjoyment. See Atlas helps deliver this. On the left, you'll see Zeus. On the right, you'll see Atlas. You see here how many of these components Emad just told you about, were merged. On the top now, Atlas was reduced to just a couple of components. And then we expand and we see that we merged everything, the castings, the side faces. Everything was simplified. We had to do that. So one, we could still deliver a superior product. right? We're still having the 3.5, 0 to 60. We still have amazing highway passing, and we still have this motor contribute to our energy efficiency story. But the cost efficiency, 30% fewer parts, a commonized front and rear driving it. We don't have to go resource all those components, we get scales, we get economy that comes together, and that leads to a 37% reduction in driving a cost. This is radical efficiency. And when we put this all together, when we talk about the midsize and what the customer gets, this smaller battery, this smaller drive unit, this integration into the body gives us more customer space. This is more customer space without a bigger car. This is the customer getting a superior product, but not just for them, but for their cargo, we're talking about 24% extra cargo space compared to the average of our competitors. That's 24% more space, whether it's your car, whether it's an Uber that you're trying to desperately get to an airport in or there's a robotaxi that you're doing the same. This radical efficiency goes across all of our businesses and leads to value for us and for the customer. Now Emad brought up a really good point. Software efficiency. Ironically, software efficiency is not about just the software. It's about needing to do a system. It's about a software-defined vehicle. Now I know you've all heard this term way too much, right? This is probably the buzzword that is hitting us all the time. So what does a software-defined vehicle really mean? It means changing the entire architecture, centralizing as much as you can into a couple of ECUs so that you don't have to go and update the software for tons of things, make the communications, make the connections, it means replacing components with virtual components so reducing the amount of parts but not reducing the customer experience, and this leads to an utmost software efficiency. When we talk about Gravity everything that Erwin just told you about, it's still true. It is an amazing vehicle. It is constantly getting better. At the moment, multiple people are downloading OTAs and their cars are becoming more valuable. But we had to take to the next level. And our new architecture takes all the same body electronics and merges them into 3 ECUs. What does this mean for us? This means, again, a superior product. You're still getting the over-the-air updates. You're still getting reduced latency because we have less connection that's all happening on less ECUs. And you're getting this AI assistant that you just saw that can -- is a game changer for the experience and brings you into the world of the vehicle, but it gives you cost efficiency. 40% fewer wires compared to our competitors, 40% fewer wires, every wire you cut is cost. You have to go make it, you put it in the bundle that is 40%. That is a reduced assembly time. I'll tell you, if you're in the automotive industry, wire harnesses are usually not your friend. They are like the worst thing to put in the car. It is so difficult to deal with. So when we were building our first midsize, everybody was afraid. We basically put like a full day. Like the entire team was circled around, okay, how are we going to do this? We're going to have to rework this? We're going to do that. How are we going to force it in there? We are prepared. The wire harness went in 4 minutes. We've prepared a day, and it took us 4 minutes because the team was obsessive with radical efficiency, obsessive about how we build this faster and have less demands on our business. This is radical efficiency in our product, in our software and our software-defined vehicle. I want to really just show a scale and show what that means, right? We talk about this electronics architecture. I want to pull farther to the right because we want to centralize. Again, centralizing is not reducing customer value. It's increasing our ability to deliver customer value with less needs for us. So everyone is trying to pull to the right? We see here that there are some OEMs who are still more in a domain, but we see them more advanced pulling to the right and going to centralized. But you also need to move up in this matrix, moving up as a reduction of wires, that's not just a reduction of wires, but reduction of parts. Again, that is using virtual components rather than real ones, and no one compares to us with that. We have reduced the wire count compared to some of those new EVs by 100%. We've really cut it in half. That is radical efficiency. That's how we're helping manufacturing, and that's how we're winning with our software-defined vehicle. And the last thing I'd like to chat about is our body. I'm here to make a huge announcement that we're not using giga castings in the midsize. And again, everyone was surprised because everyone's heard giga casting, giga casting and giga casting. It's what you hear all the time when we're talking about the automotive. But we need to not follow trends, we need to do what's right for us and for the customer. When you optimize the body, you find that there are a lot of spots that are the most efficient for steel, and there are a lot of spots which are most efficient for castings and aluminum. You have these corner nodes where we've put our mega castings in the corners because those are high focal points of stress and connections. There's where it pays to put our castings and that's where we put all of our time and effort. But there's another place, which is about customer value and customer repairability. This is a huge deal to customers, whether you can actually service your vehicle. This is needed in the midsize segments. So we obsessed about these front rails. We've actually put 2 different separate sections of rail to have both high speed, lower -- low speed, high reparability and even another high-speed rail so we don't destroy the castings, but we can easily repair and bolt in. And we see this is where we want to go. We want to have these mega castings, and we want to have repairability. We can see that other people are actually following this trend as well. It's ironic that some people have been fighting for giga castings with their latest updates have fully moved to their front underbody being full steel stampings. So we see that we believe in our trend that we believe what we've done and we believe how we design the body. So what does this lead to? It leads to product superiority. It leads to $1,000 less of annual insurance. That is how we help the customer. That's how we're going to obsess and we're going to get midsize to be successful. It leads still to our 5-star crash ratings and it leads to all the other benefits of space and performance that we've already shared. But it's cost efficiency for our business. We have a 65% reduction in our joining guns that is 1/3 for increased JPH, and we have a 2x improvement in our robot efficiency. This is how we are going to be radically efficient in our manufacturing. So what does this all mean? What does this mean for product superiority? Well, you have a vehicle with better driving efficiency, better charging speed, better cargo space and lower insurance, but we didn't throw money at the problem. No, we used radical efficiency and reduce the parts in half compared to some of our competitors. When we index to 100 parts, you see here that some have 110, some have 165 and some have 195. That is half the parts that our team needs to spend time putting in the vehicle. That is half the parts that we need to kick off that we need to design, that we need to waste our energy on. That is a superior product with a real radical efficiency for manufacturing and cost. And this is what the midsized platform was built upon, and this is what everyone at Lucid obsessed about for the last 2.5 years, as Derek referenced. So with that, you can ask the question, how do you take that and really impact your business? And what does that mean for our final outcome. Marc, do you want to come share and join what that means for us?

Thank you very much. Thanks, Zach, for all the information. Didn't I mention in the beginning that at Lucid, we're obsessing about technology. I think what became very clear. But when it drives cost down and still maintains product superiority, I don't have a problem with that. Keep obsessing and deliver on it. So I'm perfectly fine with that, because I want to show that slide again that we had in the beginning that walk that brings us down from where we are at the Gravity right now on the left-hand side to Midsize, a completely different level when it comes to unit cost and at the same time, also optimizing the Gravity and also the Air obviously. So we're moving with the whole company to a completely different unit cost level is all of this very welcomed obsession of our engineering team. The biggest part of the unit cost of a vehicle are the BOM cost, the bill of material, the parts. And now there's a lot of talk about, and we've asked very often, hey, can you compete against the best out there and particularly with the new Chinese. Let me show you something. This is a comparison of the Lucid Cosmos current BOM cost against the -- an equivalent or a comparable vehicle of a U.S. EV leader who will not be named. And a Chinese EV SUV, brand new, everybody is talking about and so afraid about. When you look at that, well, you can say, well, this EV leader is a little bit lower here. Well, but there's also a lower range in that car. So if you would normalize it, and the better way would be a little bit bigger, you would actually get to the same level we are. But we are on a lower BOM cost than the Chinese competitor that everybody is so afraid of when they come in globally. So we are in a very good position and very happy about all that obsession and what the team has done has led to this. And typically, by the way, this is typically the starting point, after you've done the initial design, that's when you actually start to drive down the BOM cost even further. So I'm very happy to see that we are currently and those are actually numbers that are sourced. It doesn't mean this is theoretically that has sourced numbers that we can already count on for the start of our production. So it's not only obsession of technology. It leads to cost reduction. And I'm very happy about. And I think my dear colleague Taoufiq even more than I am. He will tell you all about it later on. So the Lucid Cosmos is in a great BOM position, BOM cost position. But that is a good start, but remember, we have 3 products we are working on and which we will launch. The next one is Lucid Earth. And given we are already further advanced when it comes to the Lucid Earth versus the other one that you have to stay tuned for. We already know that 95% of the parts are carryovers. And particularly, the biggest or most expensive parts, batteries, the drive units, all of those things are carryovers. So you can expect that the Lucid Earth will have a very similar, very attractive BOM cost position for us. And now obviously, we're working on the third model to take as much commonality into that as possible. commonality to reduce cost. But at the same time, the vehicles will look very materially different. That means we are able with that despite the commonality to address different customer segments that Derek talked about earlier to really address the whole midsize market which is nowadays, much more competitive than it has been maybe a couple of years ago. And I also want to quickly repeat what Zach has already said. I may need to click one more time. Obviously, we're obsessive about our costs. But we also think about the customer. And when it comes to insurance, that's actually one of the big complaints that we hear quite often about EVs, hey, your insurance costs are materially higher than what I have with an internal combustion engine. That's why we actually focused so much on that, including the body composition, the body structure to make it repairable and not like when you have a small fender bender, you basically have to throw the car away. So we really have this $1,000 or 30% lower insurance cost that we are projecting based on our current information. So I would like to summarize everything that you -- as much as best as possible to summarize everything that you heard about our midsize. First of all, obviously, a significant market expansion. The term is about 10x bigger than what we are working on right now when we add the midsize to our portfolio. We will maintain same product superiority that we have worked on so hard with Air and Gravity also with the Midsize at a very attractive cost position for us and, therefore, attractive margin position for us. And based on our engineering, we make those cars also ideal platforms for our next endeavor, robotaxis autonomy that we will tell you much more about it after the break because we now have, I think, it was a 20-minute break. And yes, I wanted to just invite you for some refreshments and then see you in a few minutes here after a break when we talk about autonomy. Thank you. [Break]

Please welcome Kay Stepper, VP of Autonomy at Lucid.

Good morning, everyone, and welcome back to the Lucid Motors Investor Day presentation. Thank you so much for joining us today, both online as well as live right here from New York City. As Marc mentioned in his opening remarks, autonomy plays an outsized role for the future of Lucid Motors. So here's what I would like to share with you this morning. I'd like to talk about how our vehicle platform is ready for Level 4 autonomy. I also would like to share with you what that means in terms of time to market. I will share with you that, of course, we are not forgetting about our retail customers when it comes to higher levels of autonomy. And of course, I'm going to spend some time on our innovation, technology and commercial advantages. But before I get into all of that, I'd like to address one question. We heard a lot about great technology components Emad talked about systems and subsystems, isn't Lucid interested in selling and licensing these components and subsystems. The short answer is yes. The long answer is there is much more. So yes, of course, there is the drive units, the battery technology, our power electronics that come together to build our award-winning skateboard and vehicle platform. But now we're taking it a step further. We are offering complete vehicle platforms to our customers to enable them to turn radical efficiency into cost efficiency. Talk about the size of the deal. Of course, selling components and licensing technology is great. There's millions of dollars in that, and that's a good deal. But when you think about growing that to entire vehicle platforms, both from an EV as well as AV platform. You easily talk about 5x to 10x that size of component sales. 5x to 10x easily going into the billions of dollars per deal. So what is Lucid Motor's approach to autonomy? Well, by leveraging our innovation, our strong foundation and technology, we actually pursue multiple paths to commercialize autonomy. On your right hand on the screen, you see what we would call personal autonomy. So this is higher and higher and higher levels of autonomy features for our retail customers. And by the way, the monetization for those features has already begun. As Erwin already showed with you earlier, and I will show you some more in the next few minutes. So that's on the one hand. On the right hand of your slide, you see business-to-business customers for robotaxi operations where we see a strongly developing market that is happening after many, many years of promise and many, many years of hard development. So in short, Lucid Motors pursues a dual strategy when it comes to commercializing autonomy. Few facts when you look at the overall industry right now, not just Lucid Motors, not just the segments we play in. But overall, what is the adoption rate or take rate for Level 2, Level 3, Level 4 autonomy in the overall market. Well, it's at about 25% right now, give or take, but that is growing to more than 60% by 2035, overall market. Now Erwin shared with you earlier, the Lucid take rate for our award-winning DreamDrive Pro is already between 40% to 65%, 40% to 65% take rate of DreamDrive Pro when the rest of the market is at about 25% or less. So you see the outsized potential because we can really forecast and assume that our take rate will not just be 60% in 2035, but it already goes up to 65% today. we anticipate a much higher take rate. On the other hand, on the right hand of your chart, you see the developing robotaxi market. That's been a promise a long time in the making, but it is here. You see the scale, you see the growth. Yes, total addressable market for ride-hailing with robotaxis, less than $1 billion last year. But that is growing to more than $300 billion by 2035 total addressable market, more than $300 billion. How is that possible? It's possible because the percentage of driverless taxis will grow in the same time frame from about 1% today to about 65% by 2035, leading to more than $300 billion of total addressable market. But in order to actually make that a reality and this to become reality in the future, there's an important enablers that need to be in place. One such enabler is an underlying vehicle platform that allows for autonomous operation. So what does that mean? That means the subsystem that Emad talked about in the vehicle need to be ready for Level 4 autonomous operation. We're talking the steering system, the braking system, the network communication, the low-voltage power supply, the sensors, the compute and the list goes on and on and on. And here's the rub. You get all of that straight from the factory for Lucid Motors. No retrofitting, no removing components or subsystems, no adding components straight from the factory from Lucid Motors. So let's take a look at how we compare to our competition. There we go. So some of these vehicles on the right, some of you may already experienced yourself in a robotaxi. At a minimum, you have seen or you may have heard about them. And they are a reality today. the I-PACE, the IONIQ 5 coming soon, [ Zeekr RT ] coming soon. If you look at how we compare already today with Lucid Gravity, and you can see it right here. We have it in the foyer, you can touch it, you can feel it, you can check it out. I will be around after the presentation to answer your questions. We are already beating that in several metrics. We're beating that in efficiency, efficiency in miles per kilowatt hours. We're beating it in charging speed. Think about this. In 11 minutes, you can charge a 200-mile range, 11 minutes. Think about what that means for operation of a robotaxi fleet. And of course, as I mentioned, we have the safety backups in place for the core vehicle operation, steering, braking, et cetera, but also the safety backup and redundancy in place for the specific autonomous operating system, like the compute, like the sensors and other elements. Now when you look at how the Lucid Midsized compares for robotaxi operation, we blow them out of the water, efficiency up to 4.5 miles per kilowatt hour, charging speed with a smaller battery pack, than the Lucid Gravity and others up to 14 -- yes, 14 minutes charging speed up to 200 miles. And of course, the same safety backups in place that we already built into Lucid Gravity. Now this may all look nice on a chart in a table. What does it mean in reality for our customers. Well, here's what that means. Here's how radical efficiency that Emad and Zach have talked about earlier translates into cost efficiency. Our Lucid Midsized vehicle platform for robotaxi operation and for Level 4 technology, in general, offers a significant lower operating cost per mile. You can see others have an up to 34% higher cost per mile for Robotaxi operation. Now that may look very abstract in this chart. Let me make that specific for you. Just from charging speed and the range we get for 1 charge, that is a $2,000 cost difference per vehicle per year, $2,000 per vehicle per year. That still may not sound like much $2,000 per year, a big deal. Well, it is a big deal. Let's do the math together. $2,000 per vehicle. Let's assume a robotaxi fleet of 20,000 over the course of 6 years, $2,000, 20,000 vehicles, 6 years. That is $240 million, ladies and gentlemen, $240 million. Now that is not small in terms of a cost advantage for our customers. Now the efficiency that Emad and Zach have talked about and some of the underlying technology foundation that I'm talking about has not gone unnoticed by major players in the tech and automotive industry. So matter of fact, in July of last year, Uber decided to partner with us in a joint partnership with Nuro and committed to 20,000 units over the course of 6 years and decided to invest in our future with $300 million as well. But don't take it for me, there's a quote from Dara, the CEO of Uber right there that says Lucid's unmatched efficiency, autonomy ready vehicle architecture and customer-centric approach gives us confidence in our ability to deliver autonomous mobility together at global scale. Those are not my words, those are Dara's words. So you may ask, okay, you signed this deal with Uber and Nuro last summer. Great. How's the project going? What's happening? Well, here is how the project is going. We are right on track for commercial operation by the end of this year. Just a few milestones that we already have achieved since July of last year. Within 7 weeks, only 7 weeks after contract signing, we already delivered our first prototype vehicle to our partner Nuro, for them to start testing and development and their software stack in our vehicles. Seven weeks from start of project. Since then, since September of last year, within the last 6 months, we added 75 more vehicles they are already delivered to Nuro. So that gives our partners a fleet already of up to 80 vehicles to collect data, to test and develop already today in the San Francisco bay area. This is only possible because our vehicle comes Level 4 ready from the factory. If we would have to re-architect, if you would have to re-engineer, remove components at components, you can do that in 7 weeks. And you will see the production and 10 version right here in 3D and live in this room to touch and feel. So there is a couple of more milestones to come. Of course, this year, more vehicles, more homologation, more testing, but eventually the start of the commercial operation by late 2026. That is how the project is going. Now autonomy is a topic that's been talked about, written about for the last 20 years. And there's a lot of investment that has gone into autonomy. It is estimated that the industry between auto and tech has spent between $160 billion to $200 billion over the last 20 years to develop autonomous vehicles between $160 billion and $200 billion. As a matter of fact, if you look at company A, B, C on this chart, some of them have spent billions. Some others have spent tens of billions to develop autonomy vehicle technology. Well, I'm here to tell you this morning that we are not going to spend $1 billion or a couple of tens of billions, very much to the joy of Taoufiq. We're going to achieve this was a lot less, as you can see on this chart. How is this possible? A lot has changed, not only in 20 years ago, 10 years ago, 5 years ago, but 2 years ago, in terms of how do you achieve autonomy. When it comes to the availability of high-performance compute, when it comes of the availability to collect and store data in the cloud, how the possibility has come to learn, train and optimize your AI model in existing infrastructure. The cost of sensors has come down, et cetera, et cetera, et cetera, drastically declining investment in order to get Level 4 autonomy. So there's the declining technology costs on the one hand, but there's also the smart collaboration that we do with our partners. And that enables a reduced investment by Lucid Motors to get to Level 4 autonomy. Another fact I want to share with you is our timing. So cost is one element that's very important. Maybe it's the most important, but there's also time to market. So if you take a traditional OEM approach and you've seen some of the vehicle examples on the prior chart, you have to reengineer retrofit the vehicle. You have to remove components, you have to add components, you have to ensure that every subsystem of the vehicle has redundancy for the autonomous operation. Now if you do that and reengineer, you change the steering, just that. You have to retest. you have to re-homologate you have to revalidate. So that whole process until you finally get to deployment easily takes 3 to 4 years. We are cutting this time in half. We are able because our vehicle comes ready from the factory, for Level 4 operation, of course, software needs to be added, model deployment needs to happen, test and validation needs to happen. But we can offer and support time to market within 12 to 18 months. 12 to 18 months compared to 3 to 4 versus the competition. So a cost advantage as well as a time-to-market advantage. So besides robotaxis, I also would like to talk about our offerings in autonomy for our retail customers. Already in production, as Erwin alluded to earlier, is our hands-free highway driving. That will be added also Lucid Gravity with the city drive assisted by the end of this year. In 2027, we will have hands-free highway and city driving in Lucid Gravity and it also comes to the brand-new Lucid Cosmos. And that is followed by level 3 eyes off driving in 2028. And last but not least, eyes off, hands-off, mind-off highway and city operation by 2029. So I know there was a lot in this video. So let's recap. Very clear road map when it comes to the rollout for autonomy features for retail customers. Step one, hands-off driving, check. Already in Lucid Air today coming to Lucid Gravity in Q2 of this year. Step 2, now we're expanding that to city driving in 2027, both for Lucid Gravity as well as for our midsized platform, specifically in 2027 are Lucid Cosmos, followed in 2028 by eyes off driving on the Lucid Midsized platform. And last but not least, the mind off Highway and City driving by 2029. Erwin talked about our high take rate and the fantastic feedback we have gotten from customers. So let me share with you a couple of the feedback that we received since rolling out our hands-free driving and lane change. So what are customers saying -- those are not my words. Those are feedback we get from the Lucid owners forum, we get it from Reddit, we get it from other platforms, fabulous update. Hands-free DA was flawless, turns now as smooth as silk. Lucid knocked the ball out of the park. It's that perfect. I drove it with zero issues. Try to lane change to the far right, as the vehicle was going downhill. Brutal test, not my words, that's the owners words, brutal test, and it handled it like a champ. I have nothing to add. So that feedback when it comes to our DreamDrive Pro performance in the real world. Now what I would also like to share with you this morning is that we're introducing the option to get autonomy levels by subscription. Starting in 2027, we will offer different levels of autonomy once they become available, starting from $69 a month and that starts with Level 2 plus plus or hands free driving as we've seen in the prior road map slide. $69 to $199 depending on the autonomy level when the technology becomes available from Lucid Motors. So what have we heard this morning about Lucid's approach to autonomy. We learned is that through leveraging our core technology foundation, our relentless innovation and smart partnerships, we're participating strongly in the developing market for autonomy, both for robotaxis as well as personal vehicles. With that approach, we have a right to win. How do we have a right to win? And I want to come back to what Marc shared with you earlier. I'll give you 5 reasons, how Lucid is going to win in autonomy. Number one, Level 4 ready vehicles straight from the factory. What you see right here in the room, the Gravity Robotaxi, that comes off the assembly line by the end of this year from Lucid Motors, sensor integrated, everything integrated, ready to go. Number two, as Zach and Derek and Emad have shared multiple times, we have the best efficient EV platform on the planet. Number three, we are partnering with the best of the best, namely, Uber, NVIDIA, Nuro and others. Number four, our approach is responsible from a cost and investment perspective, we call it the capital-efficient approach. And last but not least, we're pursuing a dual path to commercialize autonomy, both for robotaxis as well as autonomy features for our retail customers. That's what I would like to share about autonomy. But now it is my pleasure to call our CEO, Marc Winterhoff, back to the stage to share with you some exciting news.

Thank you. Thank you, Kay, for all of the information and really exemplifying how important autonomy is for us. I actually have a special guest that I would like to ask to the stage now because we have here today, Andrew MacDonald from Uber, President and COO of our, I would say, right now in that space, most important partner. And I'm super excited to have you here for a little bit of a fireside chat asking you about things how you see the market and other things. Thanks for coming.

Happy to be here. Thank you. Great. So good to be here. It's such an exciting day.

Yes. Maybe I kick it off with some questions. So I mean, we've just talked a game about the robotaxi market, right? How does Uber are you seeing it? Is it developing now? Is it scaling? Or how are you thinking about that?

I mean, first off, I'd say I think you guys are thinking about it the right way. So I think that was a very compelling narrative. Our -- from our perspective, and I think this is sometimes a misconception people have about Uber and what autonomy means for Uber, but we are extremely excited about autonomy. We think we're the largest mobility platform in the world. Autonomy is going to make mobility much safer. It's going to make roads much safer. It's going to ultimately, over the long term, bring down the cost of transportation, and bring a vision that we've frankly talked about for 16 years, but haven't yet brought to life, which is true mobility as a service, right? I think the days of I've got 3 daughters under the age of 5. I don't think any of them are going to get a driver's license. And you can see it in the data today that 16-year olds in the U.S. aren't getting their driver's license like they used to. So we're big believers in autonomy. It is going to take some time, right? I think the edge cases in autonomy still exists. You still see it every single day as commercialization starts to happen. There are edge cases that need to be ironed out. But we think as the largest mobility platform in the world that we can help bring autonomy to life, and we're encouraged by the progress. Progress on the software side, there are multiple L4 players today that have sort of hits finish line on L4 capable software and are hitting the starting line on commercialization. There are vehicle OEMs, platforms emerging, such as Lucid with the Gravity today, they're autonomy ready that have the necessary levels of redundancy and compute on board and then are able to build in the sensing. That cost needs to come down over time, and we can talk about that. But the OEMs are getting ready, and I think Lucid is the leader amongst the OEMs or one of the leaders amongst the OEMs. And then finally, consumers are ready. I mean we see it in our data. We have deployments live in the U.S., in Austin, in Atlanta, in Phoenix, in Dallas and rolling out more and more. And what we're seeing is not only our existing ridesharing customers choosing autonomy when given the option, it's actually growing the market in cities that we're operating in, and that's exciting.

Awesome. Awesome. Yes. I mean now that we're sitting here together one-on-one in a small setting, nobody is watching. Maybe you can share a secret. Why did you choose Lucid for that collaboration?

That tee up wasn't in the script. I was wondering where you're going there. Yes, better to keep it real. Look, I think a couple of things. And I just heard in Kay's presentation, some of the why, right? We believe in a vision for transportation and a vision for mobility, which is shared, electric and autonomous. I believe Lucid is going to be one of our premier partners in bringing that vision to life. Why? Well, a, you're ready today. The Gravity platform has the necessary redundancy built into the core components, the efficiency, as we just heard a lot about which is really important when you think about how autonomy is going to commercialize. These vehicles need to be ready for long-range fleets today. There's a lot of wear and tear on ride share vehicles. It's a different -- ultimately a different asset experience than a personal vehicle in the sense that you need ultimate durability, ultimate efficiency and the ability for long range and 20-plus hours a day of driving and the gravity platform is ready. So one is just the -- you guys are ready today, and that's really exciting for us. Two, and I think this matters, there's sort of the right DNA at Lucid. You've been a tech forward OEM from your inception. And with respect to our many other OEM partners around the world, a lot of the automotive industry is trying to adapt and become tech first, become software first, become electric first, but you guys started there. And I think that's really important. So for those 2 reasons, plus our just shared belief in the vision for where we head, I think Lucid is a great partner.

That's great to hear. Another question that I have. You have a lot of autonomy partners. You have a lot of cooperations that you signed. As a matter of fact, you just announced one this morning -- overnight on the other side of the world in Japan and also one, I think, yesterday. So what is -- how do you see our collaboration compared to others? What is different?

Yes. And to start, I think we've been very open about our strategy and our belief in how the market evolves. And we think that every automotive OEM is going to need an autonomy strategy and it's ultimately going to need to produce helpful vehicles. There are dozens of software companies around the world building the software capabilities to drive a vehicle autonomously. And our intent is to be an open platform and partner with everyone and partner with everyone to provide a great experience for consumers to make the world a safer place to improve mobility, all these great things about autonomy that we were just talking about. I do think our relationship in the Lucid Uber and Lucid Uber Nuro partnership is particularly unique for a few reasons. One is, I think, the depth of collaboration, from my perspective, goes deeper than in many cases, what are commercial agreements with other players, but not the sort of true in the trenches building the platform and approach together. I mean you know it as well as I do. Our teams are together daily working on how is the exterior of this vehicle kind of look as we add autonomy sensing capabilities? What is the interior experience look like? How do we optimize that for ride share passengers, which again is different than personal usage, what does the vehicle controls look like? What does the interface customers are using look like? How does that all blend together seamlessly and really adhere to the standards that Lucid has set. And that's hard work, it takes trust, and it takes like -- actually, I think a deep understanding between organizations, and we're doing that work today. So that's really important. The second thing that's unique is this is a 3-way partnership. right? We both have independent partnerships with Nuro, and we are doing a 3-way thing here, which can be very complicated, right? I think in any industry, doing sort of multiparty partnerships is complex. But we've got a unique opportunity to leverage what each of our companies is best at, right? Lucid leading on our vehicle experience in the vehicle platform, Nuro leading on the L4 software and Uber leading on the platform and network and go-to-market for autonomy, I think that's a really compelling group there, and that's unique. And then finally, I'd say we have aligned interests and that -- in a relationship, that matters in a partnership, it matters. We have a vision that I think is shared for the future. We want to scale volume. We want to go big with this. We want to go global with this. We have management team relationships. We have board level relationships. We're an investor, there's just a lot of tight ties that I think means that moving forward together makes a lot more sense than moving forward apart, and it's going to be great for our customers.

Yes. Yes, and I have to actually say our teams work great together. I mean I was also kind of hesitant, okay, there's a lot of cooks in the kitchen when 3 parties are coming together. But everything that I see and what I also hear from my own teams, it is actually pretty seamless, and it's really integrated teams. And that's the only way to make this work.

It's been fantastic. And I'll tell you, everyone at Uber, who works on this project is just a true believer in your product, which I think makes a big deal as well, people want to work on stuff that they're inspired us and I think that...

That's awesome. Okay. Well, so we announced the 20,000 gravities. And how do you think this collaboration is developing? What comes after the Gravity?

Yes. I mean it's a great question because I think the -- what we have planned for 2026 is really exciting, but we know that's just the foundation for something that's going to be much bigger and it's going to change the world. The ridesharing industry, right? Uber was founded in 2009, I've been with the company 14 years, the ridesharing has always been a supply-led business, right? If Uber has had the great fortune of having such great product market fit that if we put more cars on the road, we can fill those cars with customers. And I think the development here is going to be the same. We want to get to scale. That means we need volume. We want to launch more cars in existing markets as we stand them up. We want to go to more cities, more countries, and we want to do so with volume. Now today, Lucid offers a premium experience, and that's really important. And I think it's really important for the early adopters of autonomy in the consumer space to experience that premiumness. I think over time, though, we want to go mass market. And to do that, you need to bring the price down both of the individual consumer rides, but also the underlying vehicle platform, the compute and operational cost, the sensing kit, all the things that we know goes into the deployment. So we've got a bring the cost down over time to go big on volume. And I'm really excited about the sort of development track of the midsized platform. In fact, I think I'm now authorized to say that we're finalizing an agreement Uber and Lucid to do a similar deployment of the Lucid Midsized platform at similar levels of volume of the Gravity Robotaxi platform. And I think that's really exciting. It's a great development, and I'm so happy.

Thanks. Awesome. Yes, we're working very hard on this to -- as you said, you really want to bring down the costs. And we started together with the Gravity, but we all knew this is one for the premium sector, and we need to go one step down. We are totally excited about our -- the status, which is almost done. We'll see.

Well, now we have to get it done.

That's right. That's right. Maybe I take over and say a little bit how I see what comes after the midsize because we are not stopping with the midsize, as you can imagine. Midsize as it is today because what I would like to reveal is that we are working on a dedicated Lucid robotaxi, which is based on the midsize platform, but we made a lot of changes to make it even more efficient and more suited for robotaxi applications. Do you want to see it?

Who's going to say no to that, of course.

Okay. Why don't you join me come over there and take a look.

I'm going to fit in this vehicle, right?

Yes. I hope so. Not that we designed it wrong. Yes, I'm introducing here Lunar our 2-seater robotaxi concept that we have developed. As I said, it's based on the midsized platform. So again, it has a lot of commonalities. It doesn't mean we can do this tomorrow. And as you can see, it's still a concept. But again, we can implement a 2-seater robotaxi in a very, very short period of time. Maybe we can walk by, maybe if you can take the passenger seat. We actually have to rephrase this in the future, right? There is no passenger nor driver anymore. So you take the right seat and I take the left. But you see here purpose-built, very easy to access luggage compartment. And when we go and sit in the car, I mean, you are much taller than I am. Let's see whether you fit.

It's a beautiful vehicle. I'm amazed by the storage space.

So here in the front, we have also integrated the new white screen where -- well, the left passenger and the right in the future can actually interact together. There's also an AI assistant in this, which we have not activated today. But I wanted to point out, well, are you sitting comfortable?

It's wonderful more space than I could have imagined. I think the view is beautiful. The screen is beautiful. And from an Uber customer perspective, I think the whole trip changes when you're reorienting the vehicle around this in-car experience.

And also, what is -- what we think is important that with the way we have designed it and I know we haven't discussed it with you. But when you see the front here, you can obviously relax like you're doing right now, you can also, if it's a short trip, quickly take luggage or anything here in the front. You don't even have to open the front, just put it in here. And we also watched very much out to, hey, how easy is it to get in and out because that's what we always hear that in some robotaxis it's very easy because they're very bulky, but they're not very efficient. And others are differently designed, but it's very, very hard to get in and out. So that's another point. Efficiency. This concept, based on all of our calculations right now, would achieve between 5.5 and 6 miles per kilowatt hours. So it's even a significant step-up from what we have done with the midsize, although we're actually using the midsized platform. We're also estimating that the operating cost would be 40% less than what is currently being used as robotaxis. So a drastic change, which, I mean, for you is very important since every cent counts per mile, and 40% is a significant number. And as you just said, we think that having a great entertainment in the vehicle offers a lot of opportunities, not only for customer experience but even additional monetization potential in the vehicle.

100%. Yes. I mean I think, first of all, I feel like I'm sitting in a personal theater with the comfy chair and lots of leg room and the media center in front of me. Second of all, I think our customers are going to love it. So I'm really excited.

Yes. Very, very interested in working with you guys and driving this further. As I said, we have not yet discussed, whether that's exactly the specs that you guys are looking at, but our teams have actually spent already in my opinion, way too much time to develop that concept and drive it to where it is today. And yes, so this is our future when it comes to the Lucid robotaxi.

Fantastic. Well done.

Okay. Thanks very much, Marc. It was a great conversation, and thanks for all of the insights, and I hope everybody enjoyed it. Now I'm actually -- it's still running -- we might be able to cut that short. Yes. Coming back to the specs here. But now I would like actually to invite Taoufiq Boussaid to the stage, our CFO, to tell you why you're actually here. You want to know about the financials. So Taoufiq, take it away.

Thank you, Marc. Hello. Welcome, everyone. So I guess that you've heard about the many obsessions that we've been developing in the company over the years. Obsession about technology, obsession about efficiency. I might add some additional obsessions of my own, and it's obsession about cost, obsession about free cash flow. And these are obsessions that we don't want to cure actually that we will keep promoting in the organization. And that's probably one of the key things that we're trying to change and which is leading us to believe that the company is going through a significant pivotal time. It's not only on the back of, yes, the macro environment, some of the technologies reaching maturity. It's also about the fact that we strongly believe that we're reaching the end of a cycle in the company. It's the end of a cycle where we have been investing heavily. So some of it referred to you as the cycle of cash burn. We prefer to refer to it as the cycle of heavy investment. And that's what we've been doing in the company. So it's not like we were shoveling dollars in an oven. We were taking every dollar and building a manufacturing system, bringing our technology to maturity. Now we're entering into a cycle where it's about time to start harvesting the fruits of this investment. So 3 things will underpin the pivotal time for the company. It's the scale, the profitability and the capital discipline. The scale will come on the back of the growth. So we have a very well-defined road map to achieve this growth. So we discussed about the midsize. It's allowing us to tackle dramatically different markets in terms of size. We talked about the additional revenue streams that we have been working on, be it software, ADAS and so forth. These are gold revenue streams, as Erwin has referred to them. I also like them a lot because of their low capital intensity. Then profitability. Profitability will come because we have a better mix. We are reaching the scale. We are in a position where we are in a better position to absorb the fixed cost that we have been building over the year. This is not something that we did without purpose. It has been done by design because we needed to stabilize our manufacturing system and to be ready to put in production our products, our platforms in the best possible conditions. So this is where we are now. So we will also be obsessed when it comes to profitability to go after every dollar. So we are not going to underspend. We know where our value creation areas are. We will continue investing in that, but we will do it in a smarter way. We will stage gate our investments. We will rationalize our portfolios. We will make sure that the areas where we spend our dollars do generate a demultiplied return for the company. Capital allocation. So again, we have been investing heavily. We did these investments because we had good reasons to do it. It was by design. Now we're moving to a different type of profile when it comes to the way we will be investing in our company. So with that in mind, we have now defined our objectives for the midterm and what we refer to as the late decade. So for the midterm, what we're aiming at in terms of revenue is high single digit and high teens by the late decade. Gross margin positive in the midterm, mid-teens by the late decade and capital allocation in teens as a percentage of revenue for the midterm and single digits by the late decade. This is the framework against which we will be operating. So now when you look at the road map and how we will be executing the plan, we don't look at it as a single learning or single improvement curve. We will have 3 distinct phases in our trajectory. The first one is right now. That's the very short term and everything is about execution. we want to stabilize our performance, and we want to solidify all the things that we have been working on. We want to drive the cost per unit as low as possible. And this is -- this will be the primary focus for us during 2026. With that, we are expecting to double the revenue growth, high double-digit revenue growth for 2026 and a significant reduction of our unit economics improvement. Then comes the midterm. Midterm is very important because this is the moment where we will be able to materialize the proof point of the midsize allowing us to drive scale. We will be absorbing a higher portion of the fixed cost that we have been building over the years. We will be leveraging the mix effect that this will do on our top line, and we will be moving faster to a higher gross margin generation and also a cash generation. This is also a phase where we will start seeing the effect of the diversification of our top line. We will start introducing new sources, new revenue streams, which will allow us to derisk, to diversify the way we drive our top line. Then by the late decade, our ambition is to outperform. We strongly believe in the unique value proposition that the technologies that we have been developing over the year will allow us to do in terms of performance. We strongly believe that we will be in a position to outperform in terms of global growth, in terms of autonomous solution scaling and in terms of advantaged cost base. So that's the plan. Again, it's not a single learning or improvement plan. It's 3 different building blocks, 3 different foundations, 3 different phases, each one building the foundation for the next one. So now if we move to 2026 very quickly. So we have already communicated some of the high-level guidance that we have for the year. Just reiterating some of the key figures. The deliveries 25,000 to 27,000 units, a CapEx of $1.2 billion to $1.4 billion. Again, it's a year where we need to further scale the Lucid Gravity that will be the key focus. We have seen a very good level of performance for Q4 when it comes to the production. We were able to hit 1 or 2,100 units a month during Q4, a very strong proof point of our ability to scale the production, and that's something that we will continue doing. The expansion, international expansion, that's also something that will kick off actively in 2026. 35 new locations will be opened during the year. It's something which is absolutely key for us to further expand our top line. The obsession on cost and the obsession on driving the unit cost improvement, not only through the BOM, but also through the work through all the work that we've been doing in terms of engineering simplification, rationalization. This is also a very important lever that we will be activating and also the efforts in terms of cash preservation and extending our cash runway as far as possible. Then comes the midterm and how we will be expanding our top line. So the graph basically shows -- gives 2 key data points. The first one is that for the midterm, in the next couple of years, the majority of our growth will come from the core business. So it will mainly rely on the Air, the Gravity and the midsize starting 2027 and most importantly, in 2028. So altogether, these 3 platforms by 2028 will allow us to reach an overall production of 100,000 units per year over the period. The second important information is the change in the mix. So the Gravity will keep scaling up over the next couple of years. Then in 2028, you will see significant contribution from the midsize in terms of revenue generation. On top of that, 2028, this is the year where we will start seeing a meaningful impact on the top line from the additional revenue streams that we've been discussing. That's the ADAS, autonomy, the business, the B2B partnership and so forth that we've been discussing about. So again, many things will happen. The underlying message is that we don't want to rely on one source of revenue generation. We want to diversify and derisk this revenue generation, leveraging the global scale, leveraging and offsetting some of the cyclical effects that we might have from one region to the other and also diversifying the sources of revenues and very short -- in a very short period of time during the next couple of years. That's for the top line. Now if we move to the cost, that's also an area where we will be absolutely relentless in terms of effort. We want to be able to deliver a cost saving per unit of 50% to 60% overall for the company. That's something that we're absolutely confident we will be able to deliver. We have proof points. It's something that we are not going to start. It's something that we've been working already on for so many quarters. Now it's really a matter of accelerating. So the way we will do it, obviously, we will go after every dollar that we can find in the bill of material. That's something that we do well. We're very happy and Marc has touched on that. We have already sourced a significant portion of the midsized bill of material in a way that makes us quite satisfied and I'm very happy about the performance. We will continue doing that, and we will leverage this success to also impact the bill of material of Lucid Air and Lucid Gravity. Then Emad has explained what we're doing, Emad and Zach have explained what we're doing in terms of radical efficiency. This is something which has also a direct impact in the way it's driving cost. They have elaborated on that. They will discuss and explain this much better than what I will ever be able to do. But this efficiency, the simplification, the rationalization has a direct impact on the way we're driving cost overall for our business. Then there is the mix effect on resulting from midsize. This is something that will contribute to the overall 50% to 60%. And we will continue targeting ad hoc opportunities going after every pocket of optimization that we might have in the organization. So that's when it comes to the cost. So now if we bring this together, what does it mean in terms of our journey towards the breakeven? So we have a direction, which is relying on several levers. We are not counting only on scale to make the breakeven happen. We have a multi-leg approach. So obviously, the overhead absorption because of the installed fixed base and the fact that we will be bringing volume to absorb this fixed cost absorption will have a significant impact overall in the trajectory. The bill of material coming from the scale and the new volumes that we will have going forward will also have a significant impact on top of the manufacturing improvements, productivity stabilization of our manufacturing system, plus the golden revenues that we all like in the company that will also start kicking in and having a significant impact on our P&L in the next couple of years. So again, it's not something that will happen in the future. Many of these levers are already happening. We're tracking them through different metrics. It's something that we really want to make sure that we capture as fast as possible. We have specific KPIs just disclosing and showing you some of the things that we're looking at. Obviously, our ability to scale the production is a very important one. The extensions of the partnerships that we have just discussed about with -- between Uber, Nuro and ourselves is also a significant contributor. The start of production by the end of the year for midsize, a significant proof point on our ability to deliver on this trajectory for the margin. And obviously, everything we're doing around autonomy. So now with that in mind, so we discussed about gross margin. That's part of the equation. There is the below-the-line additional cost that sits in the OpEx. That's also something that we will be tackling in a very bullish way. We will have a phase of transition. So R&D, again, it's something that we will continue investing on. We will constrain it at 10% of the revenue in the midterm. Same goes for SG&A with additional opportunities to improve it. I will explain later on what the profile will look like on -- by the end of the decade, but we are already taking the actions that will allow us to bring the OpEx at the level of the benchmark that we see with some of our competitors. So that's for the P&L. If we spend 1 minute on the balance sheet and the CapEx. So we have been spending a significant amount of dollars for the CapEx over the years. That was done by design. We needed to implement and to establish our manufacturing system. This is now done, virtually done. By the end of the year, it will be done. And the best proof point is how the overall spend in CapEx will shrink dramatically over the years. It doesn't mean that we will be underspending. It means simply that we're moving to a new model where we spend more efficiently and our CapEx profile is more about maintenance CapEx rather than adding up capacity. So obviously, we will retain some flexibility and we'll adjust based on the market developments. But for the moment, we're aiming for a very prudent approach and a very prudent CapEx projection for the coming years. Now the diversified -- the diversified revenue mix. So I already touched on the additional revenue streams, but I think that it's also important to translate into a figure, some of the things that Erwin has explained earlier this morning around our expansion in Europe, Europe and rest of the world, actually. This is really something which is important for us. So we see the potential to deliver by the late decade around $5 billion of additional revenue coming from these regions. But on top of the incremental revenue that this delivers or these new regions will be delivering, what is important is what it does in terms of derisking our profile. So we will not be relying only on one region. The cycles are very different from one region to the other. And this diversification will allow us basically to counter some of the negative cycle developments that we might have between regions. So it's something which is very important to us. The second aspect on top of what we're doing in terms of diversification of the revenue is to change our model to a more efficient model. And the best indicator to measure the change towards this more efficient model is how we're spending in the different categories of spend that we have in the company, be it in R&D, SG&A and CapEx. So these figures that we have in our plan actually are the best benchmark that you can compare us to. And that's something that we will be delivering on. We are not going to wait at the end of the decade to implement that. This is something that we are already working on, and we know how we will be generating that. It will not be only on the back of constraining cost. It will be on the back of all the structural changes in our operating model. So I guess that once we establish all that, I think the question is how are we going to leverage all that to come to breakeven free cash flow. Again, we are obsessed by free cash flow. I have my treasurer right in front of me looking at the table once again. So it's something which is at the heart of what we're doing every day. It's something which is at the focus. We are now in a stage where we're doing a cost design for cost. And we're doing a design for cost for midsize specifically because we want to accelerate our path and our journey towards the neutral free cash flow. It's absolutely important for us. So we're very proud about the products and the technologies that we're delivering. But as I like saying, great products don't make great companies. We want to become a great company. And the only way to assess what a great company is, is in its ability to generate cash. And this is what will represent a great success for the company once it's achieved. So our journey is very simple. It starts already this year. at the end of this year, once we have completed the significant investment -- the investment that we have in CapEx of $1.2 billion to $1.4 billion that we have already announced in our guidance. We will leverage the scale. The Air and the Gravity are not dormant platforms. Gravity, yes, we have -- might have reached -- sorry, the Air, we might have reached the full potential of what it can do in its segment. Gravity is still growing, and it's a great product, and we want to leverage the scale on this product. Then midsize comes next year. It will accelerate this journey towards the cash generation. We will have non-new vehicle revenue work streams, which will also contribute to this overall cash performance. We will significantly reduce the CapEx because we will be shifting to a maintenance CapEx mode. And then by the late decade, we're expecting a positive cash generation for the company. So translating this into something that we really have at heart, which is how do we deliver shareholder return. Again, we are not only here to do great products. We want these great products to generate money and to generate shareholder returns. We have 4 building blocks. I already touched on them. It's about the growth, but not only the growth, it's growth at scale. It's about the profitability with the targets that I have already mentioned. It's about the cash conversion and how we accelerate the journey towards cash positive and the capital allocation, the disciplined capital allocation policy that we want to do. So the vectors of our trajectory in terms of performance are very clear. So it's also 3 different steps. It's in terms of business and offering from the company, it's around the core business, which is the OEM, the automotive OEM, software and services and autonomy. Unfortunately, but I hope that things will change today. Every time we were asked questions about what are our upsides, what are our -- the profile of our revenues, everything was about cars. We're very proud, very happy to make cars, but we are also a technology company. And we want to monetize this aspect of our company. We were a little bit too humble about that. I hope that now we're conveying a different message on our ability to drive the technology aspect of our company and to monetize this technology aspect. This is really something that we will be doing. We like this revenue because it's recurring, because it comes with a lower CapEx intensity because it comes with higher margins, and this is something that we will be doubling on going forward. So that's the plan. That's how we will be expanding. Having said that, we're very confident about the upside. We're very confident about the plan, but we're also realistic. So we know that there are things that can go wrong. So -- and that's the reason why on top of accelerating and having deliberate actions to drive the performance, we're also spending a lot of time to understand all the potential derailers and how we can mitigate them. This is a significant component of what we do on a day-to-day basis as a management team in the company. So when it comes to EV, we know that the global demand for EV and autonomy can shift. We are in a cycle. The cycle still uncertain. It can change depending on how macro environment evolves. But we do believe that the diversification in terms of revenue streams and also the diversification in terms of manufacturing footprint is a significant mitigating factor to this potential fluctuation. We know that competition is active. I mean, we hear about China. We hear about how fast they're going in EV and developing their technology. We know that. But we are also confident on our ability to counter this risk because we're confident on the value that our technology brings, and we're confident that the fact that we will continue investing will allow us to keep an edge versus this competition and keep this competition at bay in the future. We're still dependent quite a lot on the policy and regulatory changes. That's something that we're also closely monitoring with our own limited means, we try to influence where we can influence by explaining things and by driving a different perception on some of the things related to our sector. We're also perfectly aware that capital availability might become scarce. We're looking at interest rates on a daily basis. We know that it's something which can also make many businesses derail. That's why we're also diversifying our revenue streams with less CapEx intensity through less CapEx intensity opportunities. So that's for some of the key risks. Obviously, there are many risks on top of that, that we're monitoring, but we have also a lot of upside and we have additional opportunities. So among them, we know that the tariff environment is a very fluid environment. Things might shift, and this might have a significant impact on our bill of material, on our revenue streams as well. The robotaxi scaling is also following a maturity curve. This maturity curve might go faster than what it is today, and this will generate additional opportunities for us. We will be also capitalizing upon some of the market dynamics, and we have touched on some of them with some of the U.S. leading competitors withdrawing or stopping the production of some of the 2 platforms that they have. This is a great opportunity for us, and Erwin has provided some of the metrics associated with this opportunity, plus all the additional aspects related to the battery cost reduction and regulatory environment, which can also generate significant upside to our business. So -- with that in mind, I think that it's probably important to summarize the key building blocks on which we relies the Lucid investment thesis. I think that it really focuses or relies on 4 key building blocks. The first one is our technology. I think that we spoke enough about that. We spoke about how proud and obsessed we are about our technology. We explained how some of the things we're doing is giving us up to 5 years advancement compared to the nearest competition, and that's something that we will continue pushing. So it's something which has a value, and it's something that we are going to monetize in a more active way. We also have, and we've been doing this for the last few years, world-class infrastructure and manufacturing system. So we want to get the best from this manufacturing system. We didn't invest and went through the pain of investing all these billions in this manufacturing system if we were not sure on our ability to extract value out of it. And this is the phase and the moment where we will start getting value from this investment. We have front-loaded the investment. We will be moving to another profile of CapEx spend going forward, and it's really the right moment to capitalize on the value creation on the company. We have also a capital-efficient approach in terms of driving top lines. We have already elaborated on that. So the combination of all this makes our case truly compelling. So now there's a question of timing. So some might say, okay, we need to wait until we see proof points about all that happening. This might be too late. I think that these proof points are happening already now. And it happens already now because we have great products already in our portfolio. We have the Lucid Gravity, which, again, is by all measurable means one of the best SUV and not EV SUV, Erwin, available out there. So we're very proud about the potential of this product and the potential that it can generate for the company. The midsized TAM is huge. So some of you will have the opportunity to have a sneak preview at the car, which is located just over there. So I guess that you will really feel the excitement that we all feel in the company once you see it. So it's really an inflection point that we're going to. And this inflection point is right now. So I guess that I have summarized most of the key points. We will obviously be discussing with many of you during the next coming weeks to further elaborate on some of these key messages. So for the moment, I think, Marc, I think it's time for me to hand back the stage to you.

Yes. Now I have actually the difficult task to summarize it again in a broader way than you just did because I think you already summarized everything very well to the point. And I hope that everybody who is here today in New York and also online got out of it the information that you need. And as Taoufiq said, we are very happy to go into further elaborations, discussions. And as you probably can tell, our whole team likes to talk about those things in detail and forever. So there's no shortage of insights that we are willing to share. So I would just like to go back to where I started. In the very beginning, I said, okay, these are the things we are talking about. These are the things that we want you to take away at the end of the day. And I hope we made clear that we have a clear vision to be a leader in the mobility technology space. At the same time, we not only have great products right now with the Air and Gravity, but we also have a clear plan how to grow it and to add additional revenues on top of that, both with new software revenues, but also through expansion. Taoufiq just said that Air has may reach a plateau, which is correct in the United States because we're actually very high with our market share already. But now we are expanding more internationally, which we haven't really focused on up until now. And now we are doing it starting with Europe and with Middle East. We actually have plans beyond that later on. The big prize for us, as I hope that became very clear is the midsize, where we are on track to start the production by the end of the year. And I think we found the way to really bring our compromise nothing ethos, our product superiority to the midsize at a much lower cost for us and therefore, lower price for our customers. Then when it comes to robotaxis, we talked a lot about of autonomy. And I'm thanking Marc very much to confirm that, that market is growing or your expectation is it as well. So we see that as well. And I also think that we might see it scaling faster because it is really a supply problem. You said that last time when I spoke with Derek, you said the same. If we would have more cars, we could deploy them tomorrow. It's really more the question about having the cars. And we want to be a leader -- leading supplier or partner in that space. Then I just mentioned additional revenues, particularly software base. I think we have a lot of very good and exciting things coming. We will introduce subscriptions starting beginning of next year for our ADAS offering that we will have, then which will have L2++, which doesn't mean a lot to much -- many, many people, but maybe -- well, it's basically FSD. That's an easy way to describe it. And from there, we continue on the higher levels, L3 and L4. And Taoufiq, I think, was very clear about our next obsession, capital efficiency and preserving cash and generating cash really to drive the business forward to positive gross margins in the midterm and then positive cash flow in the late decade. So with that, I would like to thank everybody for coming and also for joining in and listening to our presentation. I can't believe it's already over, but I think we are pretty much on time. We're not done because now we move to a Q&A. And I would like to ask all of my colleagues, all of my speakers, speaker colleagues back to the stage, and then we open it for Q&A. Thank you.

Okay. Ready for questions.

Mike Ward at Citigroup. First off, thanks for doing this day, all of you. Very impressive. First, a simple question. The Cosmos and the Earth, are they being introduced simultaneously? Are they different products? Or are they trim levels?

They will not be simultaneously, but they're not trim levels. They are actually different products.

And how far behind is the Earth from the Cosmos?

It's about a year.

About a year. Okay. Second thing, and maybe more importantly, huge gains in efficiencies on the product side and the cost side, manufacturing side with the Midsize platform. Will and can that be incorporated into the next gen of the Atlas and Gravity?

I can take that. Definitely, it's under consideration. We've seen many opportunities where our next generation of powertrain in Air and Gravity would be reliant on the Midsize technologies. So this is one of the factors we included when we projected the BOM cost reduction for Gravity.

That's for '28, the midterm type thing you were looking at?

Yes.

Probably.

Some of that.

Andres Sheppard, covering analyst at Cantor Fitzgerald. Congratulations. Lots of information, lots of questions. I'll try to narrow it down to two. Lots of catalysts, I think, to look forward to this year. You guys highlighted a lot, robotaxi, Midsize. I want to maybe also connect those dots to the second production facility that you're also underway, which is also a catalyst this year, which I believe is where most of the Midsize will be built. So can we get an update there? How do you foresee once both Cosmo and Earth are production ramps up, what kind of unit mix might you think about? How are you thinking about that? And then maybe lastly, given the geopolitical conflict there in the region, might there be any impact to the production facility time line there?

So I can take definitely the time line, the progress. It's still on track. And thankfully, and I really hope it stays that way, there are no interruptions right now. And yes, it is planned for start of production end of the year. And right now, we don't see any things that talk that say that it's not possible. It always -- can always change. That's why I really want to say there have been so many things in the past. We've done everything that we can in order to keep it in check. I don't know what's going to happen tomorrow. But so far, even with all of the things that are going on, we are on track with that. And we start then the midsized production in Saudi Arabia. And you're right that it's actually only midsize that is going to be produced in Saudi Arabia, the various top heads. We will also then bring it back to M1 in the United States at a little later point. So it's not that it's only built in M2, it also comes back to M1. But we didn't want to completely overlay that. It's actually very difficult to launch a product at the same time, actually almost impossible at the same time in 2 locations. the same people will be involved. And therefore, we kind of stretched it a little bit, and we started with M2.

And sorry, can I ask a quick follow-up? And then I guess, just to build on that, you do have that contract with the government of Saudi Arabia for 50,000 units, plus another option for another 50,000 units afterwards. Give us a sense of -- will most Cosmos be delivered to them? If you're a customer, what's the earliest you might be able to get a Midsize given that you do have a large contract that you'll be supplying to?

Yes. That's not the case that we are basically shipping until the 50,000 are full, so to speak, all of the cars down there. That's not the case. So we are very cognizant that we want to bring -- actually, the early versions will be North America that we build. So we know that this is our most important market and there are people really waiting for it. And I can't wait to get it to the market, I have to say. And so we will time that equally, but I have to say North America is actually a priority for us. But there will be a significant uptick in what we are able then to sell and to deliver to the government because you can imagine, Lucid Air, a luxury sedan, there's only so much demand in the government for those kind of vehicles, then the Gravity is a little bit higher, but it's still on a very low level. There will be a step change when the midsize comes available because it's really fitting many of the uses that a government might have. But yes, they don't scoop up everything and all the other markets have to wait. That's not what's going to happen.

It's Itay Michaeli from TD Cowen. Thanks again for hosting this event. It's been very, very helpful. Just had a few questions on the late decade gross margin target. First, maybe can you just dimension how you're thinking about the global volume required to get there? And then maybe how you're thinking about kind of vehicle margin versus the software services margin? And lastly, given that you'll be kind of launching L4 in 2029, how much of any of that opportunity is baked in to the late decade margins? And if not, how do you see that beyond as an opportunity?

Yes. I think that you will be able -- if you -- we will be sharing the presentation, I think, after this event. So if you read it in detail, you will be able to connect the dots. So we already gave an indication of the volumes that will come from midsized Gravity and Air. We referred to the 100,000 units by the midterm. We also gave an indication that we will be gross margin positive in the midterm. So that gives you a proxy of how you can connect volumes with margin. So when it comes to which extent we have included some of the assumption around some of these revenue streams, there is, but it's a small portion because what we're saying is that between now and the end of what we call the midterm period, the contribution will be very limited. It will start picking up by the late decade.

Stephen Gengaro, Stifel. When you talk about the cost outs on the BOM costs over the next several years, how much of that is sort of identified, negotiated with suppliers? And how much of that is sort of your projections off of the new vehicles?

Well, I can start, and maybe Emad and team, you can then jump in. I mean for the midsize, it is identified and is actually sourced. So it's not something that still needs to happen. That level that we have shown here, which I think is actually pretty good, what we achieved there, that's already sourced and agreed on. At the same time, when it comes to the reduction that we are now working on with Air and Gravity, there's a plan. We have a lot of ideas. It's just a matter of what are we doing first? Are we bringing midsized to market, which has by itself actually a pretty good margin profile? Or are we hitting very hard on the cost reduction because it involves engineering, it involves potentially resourcing, revalidation, all these kind of things. That is something that takes maybe a little bit longer, and we are balancing what are we focusing on. There are other elements that we're also already doing with midsize, when we have new contracts with suppliers that also help support us and supply us for Air and Gravity, we basically tell them if you want midsize, you need to give us a kickback here on Air and Gravity, which is happening. So there's already immediate impact, which doesn't require any engineering. But on top of that, there's a lot of engineering ideas there and what was just mentioned about the Atlas, for instance, is one. We could bring the Atlas back into those vehicles. But those are things that we are tackling based on priorities, where do we get the best bang for the buck. Or do you want to...

Yes. I can add just a few things. Our supply chain done an amazing job, of course, in sourcing Midsize. But of course, engineering is a big driver there. However, also, we're sharing this BOM right now today based on our current volumes and situation as a company. We believe, of course, as we scale, there could be more opportunities for BOM reductions for Midsize.

And the follow-up was, as you look at much higher volumes, I imagine your CapEx expectations, you've built in sort of the need for a larger service network into your expectations?

Yes. No, absolutely. So I mean, we have broken down our CapEx projection into M1, M2 and the Other. So Other is everything around our services, CapEx requirement, our commercial network, some of the vendor tooling which might be required as well. So the assumptions is already built in, in the plan.

Andrew Percoco from Morgan Stanley. Maybe just to start on the autonomy offering. You mentioned 65% attach rate today for Dream Drive Pro. What are your expectations going forward in terms of attach rate as you start to have higher levels of autonomy? Obviously, it comes with higher functionality, but also at a higher price point. Some of your peers have lower attach rates on some of those higher functionality and higher cost solutions. So what are your modeling assumptions under attach rates going forward for your financial plan?

So our assumptions are pretty much that we stay where we are right now. That is what we're looking at. It is also -- I mean, it can be higher. But at some point, it's also then the question, what do we want? Do we want to charge more for it at that rate? Or do we want to charge less and then hope for a higher attach rate. We will modulate that based on what is best for us. And you saw the range that we showed there. And the 199 is obviously when we get to L4 because that's basically when you really don't have to pay attention anymore, which is a step change from what is out there right now, where you still -- although the car drives, but you still have to watch and you're not supposed to do anything else, right? So -- but we think that when that happens, and I think it's shared by many of you, I believe, in recent reports that I read that the current levels will actually go up, and that's what we're expecting as well.

Great. And then just a follow-up on the robotaxi announcement. Is the R&D associated with that in the financial plan? And what's the timing in terms of rollout for that product into the market?

The R&D is not in our current plan for that. But at the same time, we wouldn't do it if we wouldn't have a business case that makes sense. And there are different ways to think about how this will be funded, and I don't want to go into further details on that. But it's currently not included. And when I say not included, I mean the robotaxis, the Lunar concept that we have here right now, yes. What we're doing together with Uber, the next phase, that is all in the numbers.

Just on the next-generation vehicle, why have 3 top hats? I saw the 100,000 number. I'm just trying to square with the bigger market, why you have 3 different vehicles just out of the gate there. So if you could talk more on that, please?

Yes, I'll take that. I mean, of course, those are staggered, as Marc mentioned, between Cosmos, Earth and the 2 we announced later. And that's what you're seeing there is really Lucid diversifying its product appeal for the category. I think that's really important, what Lucid stands for today. And as we look towards that larger TAM, we really have to broaden appeal of our products, both in look and feel, style and function. And those 3 categories is where we've identified the most opportunity to do that. And of course, like I said, that will be debuted over time.

I would just add, of course, this is based on underlining fact that the platform is common. So that differentiation, as Derek mentioned, expands the market significantly with a very minimal capital investment. As we said, 95% common investment and shared parts. It's similar to, for example, the U.S. EV leader did with their 2 models, the midsized sedan and the midsized SUV. I think it's tremendous opportunity to do the same, but not exactly with the sedan. In our case, we don't know yet. But I think you can see from the slide that Derek shared where that Earth product fits in the market.

I would actually like to also add to that because the EV leader these days in the U.S., maybe that's where your question comes from, right? Do you actually need this in order to get to the volume? Well, first of all, I think times have changed. There's a lot of competition, and there will be more competition. And that's why we're looking for an approach where we have vehicles that are very different in appearance, but share not only the platform, but 95% of the parts. And so there's an enormous amount of commonality and that also means that the costs are very simple. That means that it's very efficient to produce. And still, we're able to cater to various different preferences of our customers. And I personally believe that in that segment, the one-size-fits-all approach is not going to work in the future.

John Saager from Evercore ISI. I wanted to ask a little bit about battery costs. And can you maybe discuss what your expectations are in the plan for battery costs over the period? And then a related question, would you consider improvements in either faster charging time or better energy density, something that you would pay a premium for over today's batteries? Or is it -- is cost the primary focus?

Yes. So what we share today, of course, is -- technologies that we're working on the -- future technology we're working on the midsize that delivers one of the highest, I would say, the highest probably energy density technology, at least in the U.S. here and best charging speeds. If you look, we shared about 14 minutes adding 200 miles, which actually doesn't necessarily show the full picture because the battery, which we can't share, the size today is quite small and compact. The 10% to 80% time is super competitive and will be best in the U.S. here. Cost-wise, of course, AMP-1 and AMP-1 could have a different variance and sourcing because if you know the global tariffs imposed here are forcing us and allowing us to explore other sources of battery. And therefore, we're getting a very highly competitive battery cost, very competitive. The market right now is favorable for sourcing battery at a good cost despite recently, there's some small noise, but we're still very competitive.

I think also it's -- really when you talk about having higher energy batteries or really the story of radical efficiency is by doing that, you get a little bit more energy in the pack, but then you can get more cells out, you can take out more weight and then that makes your efficiency higher. So what we're talking about is it's not, oh, we had to add cost or we have to add -- pay a premium for range. By doing a cohesive system design, you're actually making the product better and driving costs down. And so a higher -- of course, we're going to want higher energy dense cells that obviously helps. And when we do that, we can then take out other cells, drives down our weight, increases our radical efficiency and then continues to make the business case even better. So it's a converging series whereas you do one thing and you chase everything through the system, you can bring it down even further without having to pay that premium.

And in summary, smart range concept, which means small battery, long range. This is what the Midsize is about.

Maybe I add one sentence to it because what we showed you today is our current focus on what we are prepared to talk about. What you guys didn't mention, obviously, we look at a lot of other things. But we're not ready right now to talk about it, but we definitely will share whatever comes out. I mean, higher density batteries, even longer ranges, those -- you guys are working. So -- but it's not ready to share right now. Right now, we're really focusing on how do we get the midsize to deliver what we think is still class leading at the lowest possible cost.

Jake Scholl from BNP. Could you just take a moment to talk about liquidity? So as of the first quarter call -- I'm sorry, the fourth quarter call, you had about a 12-month runway. So can you talk a little bit about your capital needs to get to that late decade free cash flow breakeven?

Yes. So I mean the statement that we made about the fact that we have $4.6 billion of liquidity when we closed last year and that this is taking us to second half of 2027 still stands. We are not going to give the late decade or the midterm financing needs for the time being. I mean we obviously have the plan and the figure, and we know our needs, but it's not something that we're ready to speak about today.

All right. Just a quick follow-up. Can you talk a little bit about your plans to retrofit some of the newer autonomy software and chip stack in the Midsize into the Air and the Gravity?

Yes, I can take that. So also there, we are applying very much, our efficiency approach on the topic. Meaning specifically that we are -- everything that we have learned from the robotaxi application and build of Lucid Gravity, we're applying to Midsize. So we are able to carry over the redundant compute. We're able to use the same type of sensors maybe here and there with a slightly newer sensor evolution, but the exact same type, very similar locations. So for the most part, we're carrying over more than 90% of what we already apply on Gravity today, and that also helps dramatically with cost efficiency from carrying those autonomy options to Midsize.

But the question was also, are we bringing it back, right? Yes. We are bringing it back. We're basically -- for instance, the compute and the sensors that we have in Gravity. We will bring back into the Air.

Correct.

We will bring back into the Air.

That's right.

Yes. And then in the future, there might be from the Midsize,, things going back into the Gravity and the Air. So there is definitely a plan for that.

Yes. This is a theme of commonizing the platform from hardware and software. Economies of scale, not just important for BOM, and it's also for software development and rollout.

Surat here from Inside EVs. My question is for Emad or Zach, either of you could answer. Can you talk a little bit about the software challenges on the Gravity and how you've addressed them, what you've learned from it? And how do you plan to ensure that those don't reoccur on the Midsize?

Emad wants to talk about this all the time. So thank you for the question.

Well, of course, we are a company that evolving and also our appreciation of software complexity. But as you've seen in the past 3 months, our evolution of addressing some of these concerns have been super positive. And our customers are very happy with the progress we've made. And the lessons absolutely learned. Now we increased our certain capabilities in our automation of testing, introducing new processes, how we release software, developing a few work streams in parallel with shift lift approach of developing software as well as, of course, we have made some significant changes in our leadership that Marc also alluded in the past to get this fresh perspective about software. And you've seen probably the progress. I'm very confident about Midsize software to be very, very competitive.

This will be our last question.

My point to the team is that we need to be better than the best. There's no compromise.

Ivan Feinseth, Tigress Financial Partners. So what levels are existing cars able to be upgraded to as far as levels of autonomy? And how much of the progress in Level 4 will be based on hardware versus software and planning that the cars you'd probably make 2 years from now are going to be able to have much more advanced, hardware advanced processors? So how do you kind of line that up with the software upgradability?

Kay, do you want to take that?

Yes. No, happy to take that. So what you have in Lucid Air and in Lucid Gravity today is taking us to Level 2 driving. As you saw earlier, we have the hands-free Level 2, highway driving and Air and full 2 that's coming also to Gravity. Now what we're launching at the end of the year is our -- also our city drive assist on the same hardware, same software. So we can take a Lucid Gravity, the functionality all the way to L2++, meaning hands-free highway and city driving without any hardware changes. Now when you switch to Level 3 and Level 4 autonomy, that is not a smooth evolutionary step. That's quite a disruptive step in terms of compute needs, also the amount of sensors needed to address, especially a very complex in-city and urban driving scenarios. So for Lucid midsize platform, you will see for the first time, a new ADAS hardware platform when we're ready to launch that in 2028, that has an upgraded compute and additional sensors.

And my follow-up is, are you open to or envision partnerships with other companies licensing or partnering your technology, similar to like you did with Aston Martin?

The answer is yes, 100%. As a matter of fact, what we do for our entire vehicle platforms in the EV market, we're doing exactly that.

Yes, I think you had this actually in your presentation because I expected that question. Because it was for a long time, something that we talked about a lot, and we also were asked about a lot. And then there's a long stretch of not a new deal. I mean, what we're doing right now with venturing into robotaxi's in this particular case using our platform is basically the same approach, but supercharged. It's just -- it's not a drive unit, but it's a whole vehicle. As a matter of fact, and I keep, unfortunately, saying this, we have conversations going on as we speak for drive units for complete vehicles, actually not by somebody like Uber or but by an OEM asking us, can we do that? But like in the past, those are always very, very lengthy discussion. And the moment when the engineering departments come involved, then it always gets to the point, oh, just give us more budget and we can do much better than Lucid can.

No one had done it for 5 decades.

That's why we -- that's why last year, we actually also engaged into market with robotaxi's, for instance. Well, there is no internal engineering department that thinks that they can do things better. They need cars that work, and they need them fast. And as Marc said earlier, there are not so many out there where you can, in a very short period of time, turn it from a car that you have to drive to an autonomous car. So we're shifting. Quite honestly, we have those discussions. And if it comes to pass, fine, but we're not pushing it right now because the opportunity in the -- I personally believe in the robotaxi market is bigger than selling drive units. Good. Well, thank you very much, everybody, for coming. As I said earlier, I can't believe it's already over. Typically, we can -- if you want, we can continue talking one-on-one. We have still a lot of things to discuss. I hope that we were able to bring across the trajectory of Lucid, what we are up to, what we're -- where we're starting, where we are right now with the Air and Gravity and our awesome driving vehicles and energy efficient. And then how we're adding to that now the Midsize, completely new segment that we haven't been able to touch before, software revenue on top of it and the robotaxi's, altogether really helping us on the path of accelerating to profitability. Thank you very much.