Hello, and thank you for standing by, and welcome to Lucid Group's First Quarter '23 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speakers’ presentation, there will be a question-and-answer session. [Operator Instructions] I would now like to hand the conference over to Maynard Um. You may begin.

Thank you, and welcome to Lucid Group's first quarter 2023 earnings call. Joining me today are Peter Rawlinson, our CEO and CTO; and Sherry House, our CFO. Before handing the call over to Peter, let me remind you that some of the statements on this call include forward-looking statements under federal securities law. These include, without limitation, statements regarding the future financial performance of the company, production and delivery volumes, financial and operating outlook and guidance, macroeconomic and industry trends, company initiatives and other future events. These statements are based on predictions and expectations as of today and actual events or results may differ due to a number of risks and uncertainties. We refer you to the cautionary language and the risk factors in our most recent filings with the SEC and the forward-looking statements on Page 2 of our investor deck available on the Investor Relations section of our website at ir.lucidmotors.com. In addition, management will make reference to non-GAAP financial measures during this call. A discussion of why we use non-GAAP financial measures and information regarding reconciliation of our GAAP versus non-GAAP results is available in our earnings press release issued earlier this afternoon as well as in the investor deck. With that, I'd like to turn the call over to Lucid's CEO and CTO, Peter Rawlinson. Peter, please go ahead.

Thank you, Maynard, and thank you, everyone for joining us for our first quarter earnings call. In quarter one, we produced 2,314 vehicles and delivered 1,406. Sherry will go into more detail on our financials, but I would like to first thank all our employees. We have the best EV on the market. And really, I believe, the best car on the market and it would not have been possible without the collective efforts of our entire team, which is a direct result of tremendous perseverance, resourcefulness and teamwork. I want to express my deep personal gratitude to everyone who has contributed to and the teams that will help advance our mission going forward. I'm very excited about our future and the opportunities that lie ahead of us. We have the best EV on the market and really, I believe, the best car on the market. And it would not have been possible without the collective efforts of the entire team. I would like to welcome three new members of the Board, Sherif Marakby, Chabi Nouri, and Ori Winitzer. Together, they bring significant global experience in the areas of marketing, finance and operations, across automotive technology and luxury consumer goods. Now these additions are a reflection of the company's evolution as we mature to the growth and brand awareness stage of our life cycle. I'd also like to congratulate Turqi Alnowaiser on his appointment as Lucid's Chairman of the Board and also thank Andrew Liveris for his guidance during his service as Chairman. And also, a heartfelt thank you to our outgoing Board members, Nancy Gioia, Tony Posawatz and Frank Lindenberg for their significant contributions and their dedication to Lucid's mission. Now last quarter, I laid out two key significant strategic priorities for the company: Number one, growth and brand…

Thank you, Peter, and thank you to those who are taking the time to join us today. I'd like to begin by calling out a few recent highlights. Last month, we announced that Lucid joined the United Nations Global Compact, the worlds largest corporate initiative advancing sustainable and socially responsible business practices. Sustainability is an integral part of what we do every day. It's our mission, and we view this as a natural progression in our sustainability journey as a company. Last month, we also signed the first annual agreement with the Human Resources Development Fund, or HRDF in Saudi Arabia. This agreement operationalizes the memorandum of understanding signed with the HRDF in October 2022 and will facilitate Lucid training programs and will fund skills development and salaries for Saudi National, who work within our organizations within Saudi Arabia. The public investment fund has connected us to many of the ministries throughout Saudi Arabia and this HRDF agreement is another example of how those relationships and partnerships have resulted in significant economic and administrative support as we launch our international operations in the Middle East. The PIF has been a committed investor and a strategic partner for many years and we're very grateful for their partnership and support. I'd also [Technical Difficulty] on the SEC investigation that was previously disclosed on December 6, 2021. On April 27, 2023, SEC staff inform Lucid that the SEC concluded their investigation related to the business combination between Churchill Capital Corporation IV, which was Lucid legal predecessor and Atieva, Inc. in certain projections and statements. I'm pleased to inform you that they do not intend to recommend an enforcement action by the SEC against the company, which we view as a very positive outcome. We consider this matter closed. I also want to talk…

Thanks, Sherry. We'll now start the Q&A portion of the call. We'll start by taking Q&A from our retail investors through the safe platform, very important constituency of our shareholder base followed by live analyst questions. So our first retail question is, Peter, you have said, I'd just like to under promise and like to overdeliver. You promised 20,000 deliveries in 2022 and 49,000 in 2023. We got 4,022 and guidance is just 10% to 14% for '23. When will we see under promising and over delivering. It has been the complete opposite so far.

Thank you, Maynard. I'd just like to say -- start by saying to everyone I acknowledge and emphasize with the frustration, and I take this very seriously. Under-promising, over-delivering isn't about setting low standards or being complacent. It's about being realistic and proactive. And then going above and beyond to try to exceed expectations. And we as a management team, we've taken it very, very seriously. Back in '21, happy anyone could have foreseen. The disruption to the logistics and supply chain that we saw in 2022 that affected the whole industry, it wasn't just Lucid. It was a bunch of other car companies, very established names were affected the same way. I was part of the team that worked night and day in that factory to resolve issues throughout '22. And as a huge team effort, we did that. And now, we're facing challenges in the market, macroeconomic effects and high interest rates, which do impact. We've seen with all of the federal tax incentive at the end of 2022. And these are factors, which are very difficult to predict. When we guide, we do so with absolute honesty and integrity to the very best that we are able to estimate. And I truly emphasize with our shareholders who are here with us through the long run. But I nevertheless, believe that this is a technology race that the technology that we've developed is unique. It's hugely differentiating. It will enable us to push the point of cars down because we've got more efficiency, which means we can go further with less battery energy, which means we can go the same distance as anyone else with smaller batteries and batteries at a high cost item, which gives us an advantage in terms of potential gross margin. And I believe this will come to bear in the future. And we've also got compelling products coming. We've got Sapphire which is going to be a halo product, halo product for the brand and help grow brand awareness. As we know, that is a limiting factor right now. And then we've got the big one for production coming next year and on track, the Gravity, which I think is going to be a seminal product. So I temper this with unerring optimism for the future for Lucid.

Thanks, Peter. The second question is, would you consider launching the Gravity with a more price accessible trims first to attract more buyers considering the current economy conditions?

Yeah. First thing, I would say that from a principal perspective and given where we are in the life cycle maturity of our company, we do think it's important to balance between volume and price not to optimize one to the detriment of the other. Your question is timely because we have been studying this topic, looking at launch cadence. The time between launches and the price elasticity curves and where the intersection of those end up optimizing for the company. it's still a little bit early for us to comment on our intended approach. But what I can say is that we've already sourced about 80% of the components on the Gravity, it's going really well and we've been able to stay within our cost targets, which will ultimately give us maximum flexibility to react to dynamic market conditions over time. We're also taking lessons learned from the air in looking how we shrink the amount of time between trim launches, hence, getting all buildable configurations into all regions out to the public faster. And finally, we know it's important that customers are aware of the full price spectrum for the vehicle. We found that a lot of people simply don't know that we offer in the case of an air, a vehicle with earning price of $87,000, as Peter mentioned a few moments ago, and hence, awareness is something that we continue to focus on. So we'll keep you posted as we can share more perhaps if the Gravity unveil later this year and in 2024 as we approach starter production.

Thanks, Joana. Can we turn it over to phone questions, please?

Sure. [Operator Instructions] Our first question comes from the line of Chris Pierce, Needham & Company. Your line is open.

Hey. Good afternoon. Just a clarification. Did I hear you right that test drives are up to us in 1Q '23 versus the fourth quarter of last year. And if that is the case, I was just curious what was driving that given the Dream Ahead Tour launched in the second quarter, I believe?

That is correct. It's been a whole holistic series other activities that we've initiated, which collectively will form the basis for our forthcoming marketing strategy. It's not just been the Dream Ahead Tour, that's bringing garnering a lot of test drives. But we've been much more proactive both studio level through initiatives that we've undertaken from headquarters here. To get more people in the car, people are blown away by the sporting us, the driver engagement, the refinement, the comfort of driving Lucid Air, people who have never driven EVs before are attracted to this. It's all about getting people behind the wheel to experience. Very few people will actually buy a car without experiencing a test drive. So I see this as a conduit -- sort of gateway to a future purchase and ownership experience.

Okay. And then just lastly for me. With the cars available on the website right now, cars you have in inventory, is there something you're doing to kind of -- that coincides with the test drives or the Dream Ahead Tour kind of work through that inventory or is it just about whatever specifications or configurations a customer wants you'll build that based on whatever they order. I just kind of want to get a sense of -- I know you're not profiting time or price, but how you're kind of thinking about those two dynamics?

Well, we've got -- we are reconfiguring the website to make the customer experience more seamless, more straightforward. We're showing the cars we have currently available that can be spent on that website. And of course, we're building to order. We've recently introduced the [indiscernible], the dark side look of the listed Air. And that's really attracting a very different audience. It's a very different vibe, a more youthful appearance to that car. And it's a very handsome manifestation of the range. So we're doing all those things, we've got increasing volumes of touring out there. We've got touring’s in the studio to experience and test drives are undergoing. And of course, we're bringing more and more affordable versions of Air Pure, the Air Pure coming out. And later this year, we'll be bringing the real-world drive variant of the Air Pure out. Remember that a lot that many people believe that Lucid Air assumed $200,000 car, it actually starts at $87,400 and we need to really dispel this myth.

Thank you. [Operator Instructions] Our next question comes from the line of John Murphy with Bank of America. Your line is open.

Hi. Good afternoon, guys. Peter, in your comments, it sounded like you were -- or you were alluding to potentially licensing or selling the powertrain technology. And it sounded like that was actually pretty far along potentially with some customers. I'm just curious, if you can comment on that or give us any other color as to what those comments meant.

No, John. I'm not in a position to disclose anything tangible juncture. As I said on the earlier, but we continue to receive incoming interest. And I think there's a growing awareness that we have something very, very special here in terms of performance and efficiency. And if you can have something more efficient, you carry less batteries. So you burden with less matter weight and this makes the car really more agile and more sporty, more of a driver-focused experience. So the technology we have today is eminently suitable for higher performance vehicles with our drive units of $600 to 670 horsepower capability. When we develop lower power units, more affordable units from mid-sized platform in a few years' time, that technology would be more appropriate for a more mainstream manufacturers. We've not proactively going out to seek any engagement in this arena, but we've had multiple OEMs come speak to us, and we are in dialogue with several right now. And that's all I really can disclose at this juncture.

Okay. And then, Sherry, maybe just two quick financial questions for you. The $411 million of finished goods inventory would indicate there's almost 4,000 units in stock. Is that about right or is there something else in that finished goods inventory that would be considered that wouldn't be a complete vehicle?

Yes, that is a little bit misleading. So I'm glad you asked the question, John. The finished goods inventory has the inventory that is available for sale, but it also includes our test fleet vehicles. loaner vehicles that we have in order to give optimal customer care experiences for the end customer, showroom cars as well. These are vehicles that ultimately, after a few thousand miles on them or perhaps, no miles on them in the case of showroom cars or media cars that we will ultimately sell, but they're not available for sale today. So it's important to differentiate between available for sale today and finished good inventory that is being used for other customer-facing purposes.

Okay. And then just the other financial question. I mean there's a lot going on right now, so I haven't had a chance to completely go through that S-3. But it sure looks like a mixed shelf. I mean, is there the availability for you to raise material amounts of capital under that shelf that's been filed or I mean -- I'm sorry, once again, I haven't gone through the details there, but it looks at first blush like there's a lot of room for you to raise capital.

Well, again, this is not a new issuance. This was really just a contractual obligation that was associated with the subscription agreement that we did with the PIF back in December of 2022.

Okay. Great. Thank you very guys.

Okay.

Thank you, John.

Thank you. Please standby for our next question. Our next question comes from the line of Andrew Shepherd with Cantor Fitzgerald. Your line is open.

Hi. Good afternoon, everyone. Congrats on the quarter and thanks for taking our questions. Peter, I wanted to perhaps follow up from the -- one of the last questions in terms of the licensing. I realize you're not providing additional color on that? I'm seeing if I can maybe you can ask the question slightly differently. Given the slight reduction in the production guidance for this year and gross margins where they are, I guess what is the reluctancy to introduce this as a new revenue stream? You have the proof of concept with the Formula E series. You continue to talk about the technology and how superior it is relative to competitors. So I'm just trying to understand why not introduce this sooner rather than later. Thank you.

There's no reluctance on our part. We're very open and engaged. We have to prioritize here. Last year, my laser focus was working crazy hours in the factory. That's what I was doing, crazy hours to resolve logistics and supply chain issues. My laser focus right now is amplifying for brand awareness and creating a cohesive strategy with Andrea to market this brand and make many more people aware that we've got the best car on the planet. Our tech road map, I believe, is extraordinary. We will be launching progressively more affordable versions of our tech, which would be appropriate for different -- for OEs in different parts stronger of the market. So there's nothing tangible to announce right now in dialogue with third parties. And I will make an appropriate announcement should that bear fruit. But there's no reluctance on our part. We're open and receptive, but it's -- I really have to focus on our products right now rather than proactively chasing licensing.

Got it. Okay. Understood. And maybe as a quick follow-up. I was wondering if you can perhaps just give us any color on the deliveries starting to Saudi Arabia as part of the major agreements? There was a brief comment there from Sherry at the end. Sorry, if I missed it. Just wondering maybe you can elaborate a bit further just in terms of how you see those progressing, yes? Thanks.

Yeah. So I think you’re referring to the Ministry of Finance agreement that we have in which they have committed up to 50,000 maybe up to a total with the option for another 50,000 to a total of 100,000 units over the next 10 years. We are progressing those conversations. We are in active dialogues. We’re in the process of building out the specs for the first vehicles that they want to receive later this year. So that is actively ongoing.

Okay. Thanks, guys. Congrats again. I’ll pass it on.

Thank you.

Thank you.

Thank you. Please standby for our next question. Our next question comes from the line of Steven Fox with Fox Advisors. Your line is open.

Hi. Good afternoon. Two questions, if I could. First of all, the change in guidance in terms of going from 10,000 to 14,000 to 10,000. How much of that would you say is related to just some concerns on the macro or your ability to build brand versus just factory production issues? Any details you can provide on that? And then I have a follow-up.

Yeah. I think it's important as we take a very responsible perspective of this, that we match the cars that we build, the production volumes with the cars that we deliver, and that's the balancing act. Certainly, we believe that the macroeconomics are playing a part in the deliveries right now. We also believe that the interest rates play a part, even for a high-end product, even in this part of the market, interest rates to provide a headwind. But we've got initiatives within the company to turn the source is on to up the bolus, shouldn't those market conditions improve. And we are ready to scale up pending that. And also as we amplify brand awareness. And also I come back to this misconception which seems to be out there. But yes, people believe it's a $200,000 car Actually, the entry level price is $87,400. It's probably conceivable that people think of it as a $300,000 car dollar count because it's so amazing, but actually, it's much more attainable, and we need to spread that word as well.

Great. That's helpful. And then just in terms of -- you mentioned maybe bringing Phase 2 online in stages. Can you just talk to sort of the triggering points for that? And whether -- I don't know whether if you focus on certain stages besides the CapEx efficiencies it helps in any other ways in terms of how you -- how the vehicle production goes from a cost standpoint and your ability to react to changes in demand. Thank you.

Yes. No, I think it's an important question. So we're in the process of adding significant I think 2.85 million additional square feet in Arizona, Casa Grande facilities. And it's a number of our shops are being either expanded or new buildings. And what we're finding is that as we look at our production plans that we have the ability to continue to eke out a bit more volume out of some of our existing machinery tooling equipment in the existing shops for a bit longer which would allow us to take certain of the shops, like stamping perhaps paint and potentially delay the onboarding of those, hence, you will delay the depreciation expense that accompanies that particular machinery tooling equipment and facility to a little bit longer. The other thing we're doing is, we're really carefully looking at all of the equipment that's going in each of these shops. And to the extent that there is volume equipment that could potentially be delayed like the addition of additional robots, for instance, we're looking to put those in place and activate those as they're needed versus doing it all at one time. The other thing that's really unique about what we're doing in the general assembly hall is that we're going to have the ability to dial up the jobs per hour between a few different job power points. So it's not a unit step increase in the direct labor and bringing on the equipment, but instead, we'll have the ability to dial that up gradually and we're going to work to be really thoughtful about that so we can minimize depreciation expense and also the just efficiency of the workforce as well.

Great. That’s all. Very helpful. Appreciate the answers. Thank you.

Thank you. Please standby for our next question. Our next question comes from the line of [indiscernible] with Evercore. Your line is open.

Thank you. Hi, Peter, Sherry and team. So looking at ASPs, there were about $106,000 per vehicle this quarter. so that either implies some heavy discounting below MSRP or a lot of our trend. Can you maybe speak a little more to that and how we can think about that going forward?

So I think that when you think about the mix, as it starts to differ from 2022, you're starting to have more dominance and trims other than Grand Touring and Dream, right? So now you start having more prevalence of touring. We're starting to get peers in there. as you go forward through the balance of this year, there is going to continue to be a healthy mix because some of the higher trim levels are going to start going and are going to the Middle East and Europe. And so you're going to start to see the exposure of those products with higher end products in those regions while you simultaneously start to ramp pure in the U.S. and then later send that overseas as you're exiting the year and into 2024. So you're going to continue to see this mix of trims. We did have a 7,500 kind of continuation program that lasted the first couple of months of the year -- a couple of few months of the year, and that also is reflected in the revenue numbers that you do see.

Okay. And it's safe to say that $7,500 continuation program will come off going forward throughout '23?

It did come off, yes.

Yes. Okay. And then just one quick modeling question for you, Sherry, on the LC NRV (ph) cadence. Is there any sort of guide on how we might see those charges hit in the remainder of this year and the next, just so that we can lay it out cleanly in the model and understand how those might affect the bottom line.

It's a great question. The LC NRV charges have been really kind of between $180 million, $200 million-ish to $20 million the last threequarters. So we've kind of seen it basically leveling off. We do expect to see an improvement of that over time because part of the charge is associated with the inventory we have on hand, given my comments that we're looking to reduce the days outstanding of inventories on hand and did not bringing fresh inventory in, in terms of raw material, which -- and also work in process, finished goods, we would expect that to start to taper down. So as you're looking forward this year, we are expecting some reduction in that over time. The other thing that we have had in some impairments there is we had mentioned some obsolescence. We had mentioned some scrap. I had mentioned the fact that we have some different activities ongoing to really address that in a more proactive way and that's partly us improving our systems. It's partly us not having to hold as much inventory on a precautionary basis because we're not experiencing the same supply chain issues and the same COVID issues that we had in the past. So bringing down that inventory, making sure it's more current inventory will also improve the situation throughout the year.

Understood. Thank you for the detailed answer.

Of course. Thank you.

Please standby for our next question. Our next question comes from the line of [indiscernible] with Redburn. Your line is open.

Hi. Thanks for taking my question. If we exclude the non-cash inventory write-down charge, your COGS per unit only improved by about 8% versus the fourth quarter 2022, which likely reflects the rotation towards the lower content Pure and Touring variance, but also some of the discounts that you just mentioned. Are you able to provide some data points for analysts and investors on the work that's being done internally to remove the costs from the vehicle?

Yeah, absolutely. I mentioned a few of them in my prepared remarks, but let me provide some additional context. So some of the work that's being done is on build a material cost down. Now they have two different flavors. One part is commercial agreements that we have with our suppliers and improving piece price cost. Some of that happens as you're negotiating additional volume with them on new programs, they become more open to negotiating down piece price on current programs. So that's part of the effect. The other effect is when we are doing engineering changes that have a corresponding cost increase as well. So [indiscernible] is certainly something that we are expecting to see throughout the year though you have to remember when you've got inventory on hand and you're bringing new lower cost parts in, you got to go through that inventory first that's why I guided earlier that you're going to start to see the impact of that more towards the end of the year and also as you get into 2024 because some of these items we know will actually take effect in 2024. Some of the other areas where we've been seeing some really good progress has been in freight and that will start to show up more in Q2 and Q3 as we've renegotiated some of our contracts there and also we're seeing improvements in manufacturing overhead as well. And then as a result of the workforce reduction, there's improvements that you're going to start seeing more of it is going to be in cost of revenues than in OpEx, you're going to start seeing that in Q2. So these are different cost-down initiatives that will start flowing through the gross margin. And of course, we talked about the greenhouse gas credits, the Inflation Reduction Act, some of those things, some of the trims that we have, those will start hitting a little bit later in the year with our rotation.

Okay. Cool. Thank you. And I guess my second question is that the Lucid Air began production roughly one year after beta prototyping testing began. And clearly, COVID impacted some of the start of production time line. But shouldn't analysts and investors use the same time line to conclude that the gravity SUV begins production in roughly nine months to 12 months from now, given your announcement that this nameplate has just begun road testing?

All I can say is that we've got to get the product absolutely right. There is a gestation period between data and start production. There's also a nomenclature issue here. We are on target for started production late '24 for the Gravity.

Okay. Well -- perhaps maybe if you outline exactly what needs to happen for the -- between now and the start of production, maybe so that we can track in real time. I don't know when you expect the vehicle will get homologated, et cetera, et cetera?

Yeah. Well, I mean, home obligation comes relatively late because that has to be conducted to process and tooling that represented levels or authenticity for the represent production. So right now, we're road testing the beta vehicles for the core attributes, structural integrity, drivability, suspension tuning we're starting on some of the great developments, the traction controlled antilock braking systems, the core attributes of the vehicle, then we will move to a phase of interior development. They want to have representative interiors at this stage. Later this year, we'll move bases with representative interiors, we can do all that development. Then the long lead tooling items are being kicked off because some of the parts take over a year to tool and then we'll go through a preproduction run through next spring, culminating in production late 2024 on track. And I believe it will be a seminal product. It's -- Gravity is on track. It's the landmark. It's going to be a landmark seater third row, three-row, super practical, super high performance, extraordinary range, extraordinary performance attributes.

Great. This has been super helpful. Thank you. I’ll pass the line now.

Thank you. Please standby for our next question. Our next question comes from the line of Ron Jewsikow with Guggenheim. Your line is open.

Good evening, and thanks for taking my question. Peter, just wanted to get your thoughts on kind of competitive dynamics in the market right now. From our vantage point, it feels like a pretty challenging market for luxury electric vehicles, but wanted to get your view on if price cuts from your -- one of your large domestic competitors on their luxury line of vehicles is having any impact on demand for used vehicles?

Well, I think what you're referring to is perhaps a different part of the market. I believe that there is a challenge to the entire market right now because of macroeconomics and because of interest rates, which actually do affect this place of the market. We're seeing key competitors from Germany discounting their products very heavily that's not just the U.S. manufacturer that you may be referencing the Germans are heavily discounting their vehicles, and I think there are challenges right across the marketplace. I think what we need to do is just amplify awareness just how compelling our product is. We've got better range. We've got better interior comfort. We've got more [indiscernible]. We're faster charging. We're more efficient to hire technology. We've got a fundamentally superior driver engagement experience. I was taking some potential customers for test drive just yesterday, and they were just lower by the overall driving and riding experience. And we just need to get more people behind the wheel. That's what this is about. We don't have a 100-year heritage or history. We don't have an existing customer base. We need to win in new advocates, new customers.

That's super helpful. And it's good to hear you out in the field kind of promoting the product.

Personally, most weekends amount meeting customers at events and the grassroots evangelism is growing. And this doesn't happen overnight. This will take some time. We are planting a cons for a forest to come in the future. Make no mistake.

Makes perfect sense. I guess you gave the data points around test drives and the number of cities you're going to for the Dream Ahead tour. Is there anything you can commentary you can provide on kind of the cadence for order trends since that started or is it too early?

It's too early to do that. And there are so many factors that overlay it's very dangerous. But what I would say is this that we've more than doubled the number of test drives in the last quarter. And I believe that very few people would buy a car without test driving. I see that as a key stepping stone a key conduit a very relevant metric, and that is a step towards purchasing ownership. And then what we see is the best sales people we've got are our customers that become advocates and some of them even evangelize for us. And there's something very genuine about that.

Yeah. These test drives also give us personal touch points in order to enter into dialogue with the customers, better understanding their needs and then it all would say that if we've stood up the loose financial services business in the U.S. and then growing that overseas, that's another touch point where we can gain intelligence on what the customer needs the pricing that they're looking for, the interest rates that they're looking for. And all of these are going to be data points that we can use to refine offerings that are going to best meet the customer needs.

And then we're streamlining the whole customer experience, making the website much more intelligible, more intuitive, more user-friendly streamlining the ordering process online.

That's super helpful. And just last quick question for me, kind of Gravity, any learnings from the Air launch process over the last 12 months to 18 months that will help inform the Gravity launch, call it, 12 months from now?

Yes, of course. I mean we want to continuously improve and there's a continuous improvement and learning process, which we take very seriously the teams here. The engineering team Gravity works very closely with the production team is in full process design for manufacture. And this is a really collaborative team sport, which we take very seriously. I really believe Gravity is going to be a seminal product. I don't think there's going to be anything else there that's even close. It's taken all technology that we've developed to date and more that we're going to throw at this or because the problem with SUVs is getting range without unduly large battery, which becomes super heavy and then you lose payload capacity on the car. So this is a multi-dimensional hugely technical challenge, and it's only now, I believe, that we're ready to really give it up a shot. Gravity is going to be huge for us. I'm very excited about it.

Very helpful color. Thanks, Peter, Sherry and team. I’ll hop back in queue.

Thanks you. Ladies and gentlemen, due to the interest of time, I would now like to turn the call back to Maynard for closing remarks.

This concludes Lucid's first quarter 2023 earnings conference call. Thanks. Thank you all for joining us today, and you may now disconnect.