Lucid Group Inc (LCID) Q1 2025 Earnings Call Highlights: Record Deliveries and Strategic Growth ...

GuruFocus News

Wed, May 7, 2025, 1:25 AM 5 min read

Vehicle Deliveries: 3,109 vehicles delivered, up more than 58% year-over-year.
Vehicle Production: 2,212 vehicles produced, up 28% year-over-year.
Revenue: $235 million, representing 36% growth year-over-year.
Regulatory Credit Revenue: $31.5 million recognized.
Gross Margin: Improved to negative 97.2% from negative 134.3% in the prior year quarter.
R&D Expenses: $251 million, expected to increase throughout the year.
SG&A Expenses: $212 million, a 13% sequential decline.
Adjusted EBITDA: Negative $563 million, an improvement of 2% versus Q4.
Cash and Investments: Approximately $4.56 billion at the end of Q1.
Total Liquidity: $5.76 billion, providing runway into the second half of 2026.
Inventory: Increased to $471 million, up from $408 million in Q4.
CapEx: $161.2 million for the first quarter.
Production Forecast: Approximately 20,000 vehicles in 2025.
CapEx Guidance for 2025: Approximately $1.4 billion.

Warning! GuruFocus has detected 4 Warning Signs with LCID.

Release Date: May 06, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

Lucid Group Inc (NASDAQ:LCID) delivered 3,109 vehicles in Q1 2025, marking a 58% year-over-year increase and the fifth consecutive quarter of record deliveries.
The company saw significant year-over-year improvement in gross margin, surpassing previous guidance.
Lucid Air was named Best Luxury Electric Car by U.S. News and Road Report for the fourth consecutive year.
Strong interest and positive reception for the Lucid Gravity, with significant engagement and awareness growth from marketing campaigns.
Lucid Group Inc (NASDAQ:LCID) completed a convertible notes offering with strong support from the public investment fund, extending liquidity runway into the second half of 2026.

Negative Points

Temporary systems issues in Saudi Arabia affected deliveries, although these have now been resolved.
The company faces potential gross margin headwinds of 8% to 15% due to tariff impacts.
There is uncertainty in the macroeconomic environment and trade policies, complicating supply chain and manufacturing plans.
Lucid Group Inc (NASDAQ:LCID) experienced some technical issues with the Lucid Gravity, including software and supplier challenges.
The production ramp for the Lucid Gravity has been slower than anticipated, with some supply chain bottlenecks impacting timelines.

Q & A Highlights

Q: With the acquisition of the Nikola factory, can the Midsize rollout and ramp be accelerated than previously planned for the second half of 2026? Also, does this acquisition minimize the capital expenditure than previously planned? A: (Marc Winterhoff, Interim CEO) We always talked about late 2026 for the Midsize rollout. The pace at which Lucid has brought the Lucid Air and Gravity to market was already incredibly fast. The Midsize is just as complex, and current uncertainties around tariffs and supply chain add complexity. Accelerating the Midsize isn't possible in this environment. (Taoufiq Boussaid, CFO) The Nikola assets were a highly attractive financial deal, mitigating some CapEx needs. We maintain our CapEx guidance of $1.4 billion but see potential for improvement in 2025.

Q: Are there any plans for Lucid to sell or lease its technology to other car manufacturers in the future? A: (Marc Winterhoff, Interim CEO) Yes, that has always been the plan. We are in active discussions with many companies, although many OEMs are currently preoccupied with tariffs. We are encouraged by the discussions and progress.

Q: What is the impact on Lucid's supply chain due to Chinese curbs on the export of rare earth materials? To what extent is Lucid exposed to tariffs? A: (Marc Winterhoff, Interim CEO) Our vertical integration allows us more control over components. Our high-power density drive units require fewer materials, and we can use different rare earth materials without impacting performance. We continuously evaluate our supply chain to maintain performance and customer experience.

Q: Is it fair to say that Lucid lacks urgency regarding production ramp and deliveries, especially with the Gravity's timeline? A: (Marc Winterhoff, Interim CEO) We share the urgency but emphasize thoughtful execution. We brought the Lucid Gravity to market faster than most in the industry. While we faced supply chain bottlenecks, we focus on delivering high-quality products that meet customer expectations and drive long-term value.

Q: Can you provide an update on test drives and order perspectives for the Lucid Gravity? A: (Marc Winterhoff, Interim CEO) We see strong order inflow, especially for the higher Grand Touring and limited Dream edition, which is almost sold out. Test drives and studio cars are being rolled out, with deliveries ongoing.

Q: Could you expand on the KAUST partnership and its focus areas? A: (Marc Winterhoff, Interim CEO) The KAUST partnership provides access to compute power for AI models, ADAS, and autonomous driving, with no significant financial commitment from us. It enhances our capability in EV technology and autonomous driving. (Taoufiq Boussaid, CFO) It's an asset-light way to accelerate our go-to-market strategy.

Q: Do you see a scenario where global uncertainty and tariffs increase interest in Lucid's technology? Would Lucid consider manufacturing components for other customers? A: (Marc Winterhoff, Interim CEO) We are open to manufacturing components for others, as seen with our first OEM contract. The Nikola assets provide more options for joint manufacturing in the U.S., and several players have reached out to explore this.

Q: How do you think about the timing and factors affecting gross margins moving towards breakeven with the Gravity production ramping? A: (Taoufiq Boussaid, CFO) The key lever for breakeven is scale. Gravity will contribute to reaching scale, but the Midsize program is crucial for mitigating fixed cost under absorption.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

This article first appeared on GuruFocus.

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