Lucid Group, Inc.

Previous wording

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our condensed consolidated financial statements and related notes included elsewhere in this Quarterly Report and our Annual Report on Form 10-K for the year ended December 31, 2025, filed with the SEC on February 24, 2026. This discussion may contain forward-looking statements based upon Lucid’s current expectation, estimates and projections that involve risks and uncertainties. Our actual results could differ materially from those anticipated in these forward-looking statements as a result of various factors, including those set forth under “Risk Factors”, in Part II, Item 1A of this Quarterly Report.

Current wording

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our condensed consolidated financial statements and related notes included elsewhere in this Quarterly Report and our Annual Report on Form 10-K for the year ended December 31, 2025, filed with the SEC on February 24, 2026. This discussion may contain forward-looking statements based upon Lucid’s current expectations, estimates and projections that involve risks and uncertainties. Our actual results could differ materially from those anticipated in these forward-looking statements as a result of various factors, including those set forth under “Risk Factors”, in Part II, Item 1A of this Quarterly Report.

Previous wording

We are a technology company that is shaping the future of mobility through our innovations, advanced technology, and software-defined vehicle platforms. Our award-winning Lucid Air and Lucid Gravity set new standards with their unmatched combination of performance, range, space, and efficiency. Our focus on in-house hardware and software innovation, vertical integration, and a “clean sheet” approach to engineering and design led to the development of the award-winning Lucid Air and Lucid Gravity, and upcoming Midsize platform.

Current wording

We are a technology company that is shaping the future of mobility through our innovations, advanced technology, and software-defined vehicle platforms. Our award-winning Lucid Air and Lucid Gravity set new standards with their unmatched combination of performance, range, space, and efficiency. Our focus on in-house hardware and software innovation, vertical integration, and a “clean sheet” approach to engineering and design led to the development of the award-winning Lucid Air and Lucid Gravity, and our upcoming Midsize platform.

Previous wording

We sell vehicles directly to consumers through our retail sales network and online channels, including Lucid Financial Services. We believe that owning and operating our sales network provides the best opportunity to closely manage the customer experience, gather direct feedback, and ensure that every interaction is tailored to customer needs. We are also actively exploring alternative importer and agency models to enhance flexibility and optimize our distribution strategy in response to evolving market dynamics. We also own and operate a vehicle service network comprised of service centers in major metropolitan areas and a fleet of mobile service vehicles. In addition to our in-house capabilities, we continue to grow an approved list of specially trained collision repair shops, which in some cases serve as repair hubs for mobile service.

Current wording

We sell vehicles directly to consumers through our retail sales network and online channels, including Lucid Financial Services, in North America and the Middle East. We believe that owning and operating our sales network provides the best opportunity to closely manage the customer experience, gather direct feedback, and ensure that every interaction is tailored to customer needs. We are also actively exploring, and have adopted in certain international markets, alternative importer and agency models to enhance flexibility, preserve capital, and optimize our distribution strategy in response to evolving market dynamics. We also own and operate a vehicle service network comprised of service centers in major metropolitan areas and a fleet of mobile service vehicles. In addition to our in-house capabilities, we continue to grow an approved list of specially trained collision repair shops, which in some cases serve as repair hubs for mobile service.

Previous wording

We designed the Lucid Gravity to share components with the Lucid Air where possible, and we continue to evaluate opportunities to apply components developed for the Lucid Gravity to the Lucid Air, further expanding the number of common parts while also enhancing the customer experience in the Lucid Air. These measures enable efficiency in design, engineering, and capital expenditure deployment for the Lucid Gravity. We anticipate continued consumer demand for the Lucid Air based on its luxurious design, high-performance technology, sustainability leadership, and the growing acceptance of and demand for EVs as substitutes for gasoline-fueled vehicles. We also anticipate that these attributes will drive customer demand for the Lucid Gravity, and our future models, including our upcoming Midsize platform.

Current wording

We designed the Lucid Gravity to share components with the Lucid Air where possible. These measures enable efficiency in design, engineering, and capital expenditure deployment for the Lucid Gravity. We anticipate continued consumer demand for our vehicles based on their luxurious design, high-performance technology, sustainability leadership, and the acceptance of EVs as substitutes for gasoline-fueled vehicles. We also anticipate that these attributes will drive customer demand for our future models, including our upcoming Midsize platform.

Previous wording

We operate a direct-to-consumer sales and service model in North America, which we believe allows us to offer a personalized experience for our customers based on their purchase and ownership preferences. We expect to continue to incur significant expenses in our sales, service and marketing operations for sales of the Lucid Air, the Lucid Gravity, and any future vehicle programs, including the upcoming Midsize platform, that we may offer over the coming decade, including to open additional studios, expand our sales force, grow marketing and brand awareness, and establish a robust service center operation. As of March 31, 2026, we have opened 62 studios and service centers (excluding temporary and satellite service centers): 39 in the United States (14 in California, four in New York, three in Florida, two in each of Arizona, Illinois, Massachusetts, New Jersey, Texas, Virginia and Washington, and one in each of Colorado, Georgia, Michigan and Pennsylvania), seven in Germany, five in Canada, four in Saudi Arabia, three in Switzerland, two in Norway, one in Netherlands, and one in the United Arab Emirates. We also plan to hire additional sales, customer service, and service center personnel. We believe that investing in our direct-to-consumer sales and service model will be critical to delivering and servicing the Lucid EVs we currently manufacture and sell.

Current wording

We operate a direct-to-consumer sales and service model in North America, which we believe allows us to offer a personalized experience for our customers based on their purchase and ownership preferences. We expect to continue to incur significant expenses in our sales, service and marketing operations for sales of our current vehicles and any future vehicle programs, including the upcoming Midsize platform, that we may offer over the coming decade, including to open additional studios, expand our sales force, grow marketing and brand awareness, and establish a robust service center operation. As of June 30, 2026, we have opened 62 studios and service centers (excluding temporary and satellite service centers): 39 in the U.S. (14 in California, four in New York, three in Florida, two in each of Arizona, Illinois, Massachusetts, New Jersey, Texas, Virginia and Washington, and one in each of Colorado, Georgia, Michigan and Pennsylvania), seven in Germany, five in Canada, four in Saudi Arabia, three in Switzerland, two in Norway, one in the Netherlands, and one in the United Arab Emirates. We also plan to hire additional sales, customer service, and service center personnel. We believe that investing in our direct-to-consumer sales and service model will be critical to delivering and servicing the Lucid EVs we currently manufacture and sell.

Previous wording

As we expand globally, our strategy includes establishing third-party distribution partnerships through proven business models such as importer, dealer, agent, and authorized repairer relationships. Introducing these channels is expected to enable rapid growth in these markets while optimizing the capital required to build a comprehensive sales and service network. All third-party partnerships are expected to be governed by robust agreements, standards, and guidelines to ensure compliance and maintain the Lucid customer experience throughout the entire journey.

Current wording

As we expand globally, our strategy includes establishing third-party distribution partnerships through proven business models such as importer, dealer, agent, and authorized repairer relationships. Introducing these channels is expected to enable growth in these markets while optimizing the capital required to build a comprehensive sales and service network. All third-party partnerships are expected to be governed by robust agreements, standards, and guidelines to ensure compliance and maintain the Lucid customer experience throughout the entire journey.

Previous wording

Achieving commercialization and growth for each generation of our EVs requires us to make significant capital expenditures to scale our production capacity and improve our supply chain processes in the United States and internationally. We expect our capital expenditures to increase as we continue constructing the CBU portion of AMP-2 and expanding AMP-1. The amount and timing of our future manufacturing capacity requirements, and resulting capital expenditures, will depend on many factors, including the pace and results of our research and development efforts to meet technological development milestones, our ability to develop and launch new EVs, our ability to achieve sales and meet customer demand at anticipated levels, our ability to utilize planned capacity in our existing facilities and our ability to enter new markets.

Current wording

Achieving commercialization and growth for each generation of our EVs requires us to make significant capital expenditures to scale our production capacity and improve our supply chain processes in the U.S. and internationally. We expect our capital expenditures to increase as we continue constructing and putting into operation the CBU portion of AMP-2 and expanding AMP-1. The amount and timing of our future manufacturing capacity requirements, and resulting capital expenditures, will depend on many factors, including the pace and results of our research and development efforts to meet technological development milestones, our ability to develop and launch new EVs, our ability to achieve sales and meet customer demand at anticipated levels, our ability to utilize planned capacity in our existing facilities and our ability to enter new markets.

Previous wording

We develop in-house battery, powertrain, and software technology, which requires significant capital investment in research and development. The EV market is highly competitive, including both established automotive manufacturers and new entrants. To establish market position and attract customers, we plan to continue making substantial investments in research and development for the commercialization and continued enhancements of the Lucid Air and the Lucid Gravity, the development of our Midsize platform, as well as future generations of our EVs and other products.

Current wording

We develop in-house battery, powertrain, and software technology, which requires significant capital investment in research and development. The EV market is highly competitive, including both established automotive manufacturers and new entrants. To establish market position and attract customers, we plan to continue making substantial investments in research and development for the commercialization and continued enhancements of our current vehicles where strategically warranted, the development of our Midsize platform, as well as future generations of our EVs and other products.

Previous wording

We recognize revenue from vehicle sales when the customer obtains control of the vehicle, which is upon delivery. We also generate revenue from non-warranty after-sales vehicle services and parts, sales of battery pack systems, powertrain kits, retail merchandise, regulatory credits, and sales of non-Lucid vehicles acquired as part of the trade-in program. We generate regulatory credits revenue from the sale of tradable credits we earn under various regulations. This includes credits related to ZEVs and GHG, and CAFE credits.

Current wording

We recognize revenue from vehicle sales when the customer obtains control of the vehicle, which is upon delivery. We also generate revenue from non-warranty after-sale vehicle services and parts, sales of battery pack systems, powertrain kits, retail merchandise, regulatory credits, and sales of non-Lucid vehicles acquired as part of the trade-in program. We generate regulatory credits revenue from the sale of tradable credits we earn under various regulations. This includes credits related to ZEVs and GHG, and CAFE credits.

Previous wording

Revenue increased by $47.4 million, or 20% for the three months ended March 31, 2026, as compared to the same period in the prior year, primarily driven by our ramp-up of the Lucid Gravity. Lucid Gravity which has a higher average selling price, resulted in a favorable product mix that contributed to the increase in the revenue. The increase was partially offset by a decrease of $31.5 million in regulatory credit sales for the three months ended March 31, 2026, as compared to the same period in the prior year. We believe the recent proposal to lower the U.S. federal fuel economy standards and eliminate CAFE EV credit trading may create uncertainties to future regulatory credit sales. Please see “Risk Factors — Risks Related to Our Business and Operations — The unavailability, reduction or elimination of certain government and economic programs could have a material adverse effect on our business, prospects, financial condition and results of operations”.

Current wording

Revenue increased by $145.9 million, or 56% and $193.3 million, or 39% for the three and six months ended June 30, 2026, respectively, as compared to the same periods in the prior year. The increases were primarily driven by higher Lucid vehicle deliveries for the three and six months ended June 30, 2026, as compared to the same periods in the prior year. In addition, our ramp-up of the Lucid Gravity, which has a higher average selling price, resulted in a favorable product mix that further contributed to the increases in revenue. The increase in revenue was partially offset by a decrease of $24.8 million in regulatory credit sales for the six months ended June 30, 2026 as compared to the same period in the prior year. We believe the recent proposal to lower the U.S. federal fuel economy standards and eliminate CAFE EV credit trading may create uncertainties regarding our ability to generate future regulatory credit sales. Please see “Risk Factors — Risks Related to Our Business and Operations — The unavailability, reduction or elimination of certain government and economic programs could have a material adverse effect on our business, prospects, financial condition and results of operations”.

Previous wording

Cost of revenue increased by $130.6 million, or 28% for the three months ended March 31, 2026, as compared to the same period in the prior year, primarily due to higher inventory write-downs including losses from firm purchase commitments and approximately $41.0 million of incremental tariff cost impact resulting from U.S. tariffs implemented in February 2025, and increased in unit costs attributable to a higher Lucid Gravity product mix. These increases were partially offset by an estimated IEEPA tariff refund of approximately $53.0 million, recorded following the U.S. Supreme Court’s February 2026 ruling that certain tariffs imposed under the IEEPA were unlawful. See Note 4 “Balance Sheets Components” to our condensed consolidated financial statements included elsewhere in this Quarterly Report for more information. In the near term, we expect our production volume of vehicles to continue to be less than our manufacturing capacity.

Current wording

Cost of revenue increased by $300.3 million, or 56% and $430.9 million, or 43% for the three and six months ended June 30, 2026, as compared to the same periods in the prior year. The increases were primarily due to higher deliveries of Lucid vehicles and higher inventory write-downs associated with inventory optimization actions, partially offset by reduction in losses on firm commitment as a result of lower volume for the three and six months ended June 30, 2026, as compared to the same periods in the prior year. The increases were also partially offset by the IEEPA tariff refund of approximately $9.5 million and $62.5 million recorded during the three and six months ended June 30, 2026, following the U.S. Supreme Court’s February 2026 ruling that certain tariffs imposed under the IEEPA were unlawful. In the near term, we expect our production volume of vehicles to continue to be less than our manufacturing capacity.

Previous wording

We recorded write-downs of $237.9 million and $151.6 million for the three months ended March 31, 2026 and 2025, respectively, to reduce our inventories to their net realizable values, for any excess or obsolete inventories, and losses from firm purchase commitments. The increase in the write-downs was primarily due to higher inventory balance driven by the Lucid Gravity production ramp-up and tariff impacts for the three months ended March 31, 2026, as compared to the same period in the prior year. While the final scope and application of recently announced changes in trade policy remain uncertain at this time, higher tariffs on imports and subsequent retaliatory tariffs could adversely impact our financial results. We expect inventory write-downs could negatively affect our costs of vehicle sales in the near term as we ramp production volumes up toward our manufacturing capacity.

Current wording

We recorded write-downs of $299.7 million and $537.6 million for the three and six months ended June 30, 2026, respectively, and $184.7 million and $336.3 million for the same periods in the prior year, respectively, to reduce our inventories to their net realizable values, for any excess or obsolete inventories, and losses from firm purchase commitments. The increases in the write-downs were primarily due to higher inventory balances driven by higher Lucid Gravity mix for the three and six months ended June 30, 2026, as compared to the same periods in the prior year.

Previous wording

On August 16, 2022, the Inflation Reduction Act of 2022 (the “IRA”) was enacted with clean energy incentives. The impact of the IRA on our results of operations was not material for the three months ended March 31, 2026 and 2025. We will continue to evaluate the expected future impact of the IRA on our business and financial statements upon issuance of additional regulatory guidance.

Current wording

On August 16, 2022, the Inflation Reduction Act of 2022 (the “IRA”) was enacted with clean energy incentives. The impact of the IRA on our results of operations was not material for the three and six months ended June 30, 2026 and 2025. We will continue to evaluate the expected future impact of the IRA on our business and financial statements upon issuance of additional regulatory guidance.

Previous wording

Gross margin was (110.4)% for the three months ended March 31, 2026, as compared to (97.2)% for the same period in the prior year. The decrease in gross margin was primarily driven by higher inventory write-downs including losses from firm purchase commitments, $41.0 million of incremental tariff cost, and $31.5 million lower regulatory credit sales during the three months ended March 31, 2026, as compared to the same period in the prior year. These impacts were partially offset by an estimated IEEPA tariff refund of approximately $53.0 million recorded during the three months ended March 31, 2026 and a favorable product mix. Our gross margin was also negatively impacted by the fact that our direct production costs for vehicles sold during the period exceeded the revenue generated from those sales, independent of the charges for inventory write-downs.

Current wording

Gross margin worsened slightly for the six months ended June 30, 2026, as compared to the same period in the prior year. The decrease in gross margin was primarily driven by higher inventory write-downs, partially offset by the IEEPA tariff refund of approximately $62.5 million and a favorable product mix, during the six months ended June 30, 2026, as compared to the same period in the prior year.

Previous wording

Our research and development efforts have primarily focused on the development of our battery and powertrain technology, the Lucid Air, the Lucid Gravity, and future generations of our EVs, including our Midsize platform. Research and development expenses primarily consist of materials, supplies, personnel-related expenses for employees involved in the engineering, designing, and testing of EVs, and contractor fees. Personnel-related expenses primarily include salaries, benefits and stock-based compensation. In addition, research and development expenses include prototype material, engineering, design and testing services, and allocated facilities costs, such as office and rent expense and depreciation expense.

Current wording

Our research and development efforts have primarily focused on the development of our battery and powertrain technology, the Lucid Air, the Lucid Gravity, future generations of our EVs, including our Midsize platform, and our robotaxi program. Research and development expenses primarily consist of materials, supplies, personnel-related expenses for employees involved in the engineering, designing, and testing of EVs, and contractor fees. Personnel-related expenses primarily include salaries, benefits and stock-based compensation. In addition, research and development expenses include prototype material, engineering, design and testing services, and allocated facilities costs, such as office and rent expense and depreciation expense.

Previous wording

Research and development expense increased by $84.4 million, or 34% for the three months ended March 31, 2026, as compared to the same period in the prior year. The increase was primarily attributable to increases of $42.9 million in engineering, design and testing services, and prototype materials related mostly to the Midsize platform, $27.6 million in payroll related expenses, and $8.0 million in utilization of contractors and professional fees primarily related to an increase in headcount to support our Midsize platform.

Current wording

Research and development expense increased by $131.9 million, or 25% for the six months ended June 30, 2026, as compared to the same period in the prior year. The increase was primarily attributable to increases of $84.0 million in engineering, design and testing services, and prototype materials related mostly to the Midsize platform, $36.0 million in payroll related expenses, and $11.1 million in utilization of contractors and professional fees primarily related to an increase in headcount to support our Midsize platform, partially offset by $5.7 million in lower stock-based compensation expenses.

Previous wording

Selling, general, and administrative expense increased by $92.0 million, or 43% for the three months ended March 31, 2026, as compared to the same period in the prior year. The increase was primarily attributable to increases of $32.1 million in stock-based compensation expenses, primarily driven by a reversal of previously recognized expenses for the former CEO’s unvested time-based RSUs during the three months ended March 31, 2025, $18.1 million in payroll related expenses due to our continued commercialization and growth strategy, $16.5 million in facilities and rental related costs, and $15.8 million in sales and marketing expenses.

Current wording

Selling, general, and administrative expense increased by $135.6 million, or 29% for the six months ended June 30, 2026, as compared to the same period in the prior year. The increase was primarily attributable to increases of $31.3 million in sales and marketing expenses, $26.3 million in stock-based compensation expenses, primarily driven by a reversal of previously recognized expenses for the former CEO’s unvested time-based RSUs during the six months ended June 30, 2025, $24.3 million in payroll related expenses due to our continued commercialization and growth strategy, $19.4 million in facilities and rental related costs and $17.2 million in utilization of contractors and professional fees.

Previous wording

On February 20, 2026, we announced the 2026 Plan that intended to align with our long-term operating goals as we focus on the start of production of our Midsize platform, expansion into the robotaxi market and development of ADAS technologies, as well as the sale and distribution of our current models in existing and new geographies. We expect to substantially complete the 2026 Plan by the end of the second quarter of 2026, subject to local law and consultation requirements. As a result of the 2026 Plan, we expect to incur total workforce reduction charges of approximately $40 million, primarily related to severance payments, employee benefits, and employee transition. During the three months ended March 31, 2026, we recorded workforce reduction charges of $37.9 million. See Note 3 “Workforce Reduction” to our condensed consolidated financial statements included elsewhere in this Quarterly Report for more information.

Current wording

On February 20, 2026, we announced the February 2026 Plan that intended to align with our long-term operating goals as we focus on the start of production of our Midsize platform, expansion into the robotaxi market and development of ADAS technologies, as well as the sale and distribution of our current models in existing and new geographies. We substantially completed the February 2026 Plan in the second quarter of 2026.

Previous wording

The following table presents our other income (expense), net for the periods presented (in thousands):

Current wording

The following table presents our other income, net for the periods presented (in thousands):

Previous wording

The Private Placement Warrants remained unexercised as of March 31, 2026, and the liability was remeasured to a fair value of nil as of March 31, 2026 and December 31, 2025. The changes in fair value were nil and $12.9 million during the three months ended March 31, 2026 and 2025, respectively, and were classified within change in fair value of common stock warrant liability in the condensed consolidated statements of operations and comprehensive loss.

Current wording

The Private Placement Warrants remained unexercised as of June 30, 2026, and the liability was remeasured to a fair value of nil as of June 30, 2026 and December 31, 2025. The changes in fair value were nil during the three and six months ended June 30, 2026, and resulted in unrealized gains of $5.3 million and $18.2 million for the same periods in the prior year, respectively. The change in fair value was classified within change in fair value of common stock warrant liability in the condensed consolidated statements of operations and comprehensive loss.

Previous wording

On November 6, 2023, in connection with the commencement of the Strategic Technology Arrangement with Aston Martin, we received 28,352,273 ordinary shares of Aston Martin. The ordinary shares of Aston Martin are subject to remeasurement to fair value at each reporting period. Such shares were remeasured to fair values of $13.6 million and $24.3 million as of March 31, 2026 and December 31, 2025, respectively. The changes in fair value resulted in unrealized losses of $10.2 million and $13.5 million for the three months ended March 31, 2026 and 2025, respectively, and were classified within change in fair value of equity securities of a related party in the condensed consolidated statements of operations and comprehensive loss. See Note 5 “Fair Value Measurements and Financial Instruments” and Note 15 “Related Party Transactions” to our condensed consolidated financial statements included elsewhere in this Quarterly Report for more information.

Current wording

On November 6, 2023, in connection with the commencement of the Strategic Technology Arrangement with Aston Martin, we received 28,352,273 ordinary shares of Aston Martin. The ordinary shares of Aston Martin are subject to remeasurement to fair value at each reporting period. Such shares were remeasured to fair values of $14.2 million and $24.3 million as of June 30, 2026 and December 31, 2025, respectively. The changes in fair value resulted in an unrealized gain of $0.5 million and an unrealized loss of $9.7 million for the three and six months ended June 30, 2026, respectively, and an unrealized gain of $3.9 million and an unrealized loss of $9.5 million for the same periods in the prior year, respectively, and were classified within change in fair value of equity securities of a related party in the condensed consolidated statements of operations and comprehensive loss. See Note 5 “Fair Value Measurements and Financial Instruments” and Note 15 “Related Party Transactions” to our condensed consolidated financial statements included elsewhere in this Quarterly Report for more information.

Previous wording

Change in Fair Value of Derivative Liabilities Associated with Redeemable Convertible Preferred Stock (Related Party)

Current wording

Change in Fair Value of Derivative Liabilities and Subscription Agreements Associated with Redeemable Convertible Preferred Stock (Related Party)

Previous wording

The derivative liabilities of the Redeemable Convertible Preferred Stock were remeasured to a fair value of $8.8 million and $16.2 million as of March 31, 2026 and December 31, 2025, respectively. We recognized gains of $7.4 million and $281.7 million for the three months ended March 31, 2026 and 2025, respectively, primarily driven by a decrease in our stock price, within change in fair value of derivative liabilities associated with redeemable convertible preferred stock (related party) in the condensed consolidated statements of operations and comprehensive loss. See Note 7 “Redeemable Convertible Preferred Stock” to our condensed consolidated financial statements included elsewhere in this Quarterly Report for more information.

Current wording

The derivative liabilities of the Redeemable Convertible Preferred Stock were remeasured to a fair value of $163.7 million and $16.2 million as of June 30, 2026 and December 31, 2025, respectively. We recognized gains of $102.8 million and $110.2 million for the three and six months ended June 30, 2026, respectively, and gains of $111.5 million and $393.2 million for the same periods in the prior year, respectively, primarily driven by changes in our stock price. The gains for the three and six months ended June 30, 2026 includes $142.2 million of gain from Series C Subscription Agreement. The change in fair value are recorded within change in fair value of derivative liabilities and subscription agreements associated with redeemable convertible preferred stock (related party) in the condensed consolidated statements of operations and comprehensive loss. See Note 7 “Redeemable Convertible Preferred Stock” to our condensed consolidated financial statements included elsewhere in this Quarterly Report for more information.

Previous wording

Interest income decreased by $39.1 million, or 75% for the three months ended March 31, 2026, as compared to the same period in the prior year, primarily due to lower average cash and investment balances.

Current wording

Interest income decreased by $73.8 million, or 76% for the six months ended June 30, 2026, as compared to the same period in the prior year, primarily due to lower average cash and investment balances.

Previous wording

Interest expense primarily consists of contractual interest and amortization of debt discounts and debt issuance costs incurred related to the 2026 Notes, the 2030 Notes, and the 2031 Notes, commitment fees and amortization of deferred issuance costs from the ABL Credit Facility and the DDTL Credit Facility, interest on borrowings from the GIB credit facility and on our finance leases, and capitalized interest on construction in progress related to significant capital asset construction.

Current wording

Interest expense primarily consists of contractual interest and amortization of debt discounts and debt issuance costs incurred related to the 2026 Notes, the 2030 Notes, and the 2031 Notes, commitment fees and amortization of deferred issuance costs from the ABL Credit Facility and the DDTL Credit Facility, interest on borrowings from the DDTL Credit Facility, GIB credit facility and on our finance leases, and capitalized interest on construction in progress related to significant capital asset construction.

Previous wording

Interest expense increased by $29.2 million, or 246% for the three months ended March 31, 2026, as compared to the same period in the prior year. The increase was primarily due to higher interest expense of $30.8 million from the issuances of the 2030 Notes and the 2031 Notes in April 2025 and November 2025, respectively, and higher interest expense of $5.5 million from the GIB credit facility resulting from higher average borrowings, partially offset by an increase of $8.1 million in interest capitalized on construction in progress related to significant capital asset construction during the three months ended March 31, 2026, as compared to the same period in the prior year.

Current wording

Interest expense increased by $24.1 million, or 101% and $53.3 million, or 149% for the three and six months ended June 30, 2026, respectively, as compared to the same periods in the prior year. The increases were primarily due to higher interest expense of $18.1 million and $48.9 million from the issuances of the 2030 Notes and the 2031 Notes in April 2025 and November 2025, respectively, and higher interest expense of $16.1 million and $21.6 million from the GIB credit facility and DDTL Credit Facility resulting from higher average borrowings, partially offset by increases of $7.8 million and $15.9 million in interest capitalized on construction in progress related to significant capital asset construction during the three and six months ended June 30, 2026, respectively, as compared to the same periods in the prior year.

Previous wording

Other income (expense), net changed by $10.8 million for the three months ended March 31, 2026, as compared to the same period in the prior year, primarily due to changes in foreign exchange rates, residual value guarantee reserve, and realized gains on the sale of available-for-sale securities.

Current wording

Other income (expense), net changed by $20.4 million and $31.2 million for the three and six months ended June 30, 2026, as compared to the same periods in the prior year, primarily due to changes in foreign exchange rates and residual value guarantee reserve. The change for the six months ended June 30, 2026 is also due to realized gains on the sale of available-for-sale securities.

Previous wording

On July 4, 2025, the OBBBA was signed into law, introducing significant changes to the U.S. federal income tax code. The OBBBA included provisions that allow for the immediate expensing of domestic research and development expenses and certain capital expenditures, as well as other changes related to the U.S. taxation of profits derived from foreign operations. We are electing to fully amortize its previously capitalized domestic research and development expenses in the current year. Due to the full valuation allowance on our U.S. deferred tax assets, the net tax impact of the legislation is immaterial.

Current wording

On July 4, 2025, the OBBBA was signed into law. We elected to fully amortize our previously capitalized domestic research and development expenses. Due to the full valuation allowance on our U.S. deferred tax assets, the net tax impact of the legislation is immaterial.

Previous wording

As of March 31, 2026, we had $714.0 million of cash, cash equivalents, and investments. We also had $1.98 billion, $468.4 million, and $2.3 million of unused available credit amounts from the DDTL Credit Facility, the ABL Credit Facility, and the 2025 GIB Credit Facility, respectively, as of March 31, 2026. Our existing sources of liquidity include cash, cash equivalents, investments, and unused available credit amounts from credit facilities. We funded operations primarily with issuances of common stock, convertible preferred stock, convertible notes, and loans.

Current wording

As of June 30, 2026, we had $775.5 million of cash, cash equivalents, and investments. We also had $1.98 billion, $270.4 million, and $2.3 million of unused available credit amounts from the DDTL Credit Facility, the ABL Credit Facility, and the 2025 GIB Credit Facility, respectively, as of June 30, 2026. Our existing sources of liquidity include cash, cash equivalents, investments, and unused available credit amounts from credit facilities. We funded operations primarily with issuances of common stock, convertible preferred stock, convertible notes, and loans.

Previous wording

We anticipate our cumulative spending on capital expenditures to be in a range of approximately $1.2 billion to $1.4 billion for the fiscal year 2026 to support our continued commercialization and growth objectives as we strategically invest in manufacturing capacity and capabilities, our retail studios and service center capabilities throughout North America and across the globe, development of different products and technologies, and other areas supporting the growth of Lucid’s business. We expect to continue to receive financing and support for certain capital expenditures in connection with AMP-2 construction and purchases of machinery, tooling, and equipment. Refer to Note 6 “Debt” and Note 15 “Related Party Transactions” to the condensed consolidated financial statements included elsewhere in this Quarterly Report for more information. Our future capital expenditures may vary and will depend on many factors including the timing and extent of spending and other growth initiatives. In addition, we expect our operating expenses to increase in order to grow and support the operations of a global technology automotive company targeting volumes in line with Lucid’s aspirations.

Current wording

We anticipate our cumulative spending on capital expenditures to be approximately $1.0 billion for the fiscal year 2026 to support our continued commercialization and growth objectives as we strategically invest in manufacturing capacity and capabilities, our retail studios and service center capabilities throughout North America and across the globe, development of different products and technologies, and other areas supporting the growth of Lucid’s business. We expect to continue to receive financing and support for certain capital expenditures in connection with AMP-2 construction and purchases of machinery, tooling, and equipment. Refer to Note 6 “Debt”, Note 15 “Related Party Transactions” and Note 17 “Subsequent Events” to the condensed consolidated financial statements included elsewhere in this Quarterly Report for more information. Our future capital expenditures may vary and will depend on many factors including the timing and extent of spending and other growth initiatives. In addition, we expect our operating expenses to increase in order to grow and support the operations of a global technology automotive company targeting volumes in line with Lucid’s aspirations.

Previous wording

As of March 31, 2026, our total minimum lease payments are $646.4 million, of which $84.4 million is due in fiscal year 2026. We also have non-cancellable long-term commitments of approximately $2.63 billion, primarily relating to certain inventory component purchases. For details regarding these obligations, refer to Note 10 “Leases” and Note 11 “Commitments and Contingencies” to the condensed consolidated financial statements included elsewhere in this Quarterly Report for more information.

Current wording

As of June 30, 2026, our total minimum lease payments are $630.0 million, of which $55.3 million is due in fiscal year 2026. We also have non-cancellable long-term commitments of approximately $2.55 billion, primarily relating to certain inventory component purchases. For details regarding these obligations, refer to Note 10 “Leases” and Note 11 “Commitments and Contingencies” to the condensed consolidated financial statements included elsewhere in this Quarterly Report for more information.

Previous wording

On February 27, 2022, we announced the selection of KAEC in Saudi Arabia as the location of our first international manufacturing plant and signed related agreements with the MISA, the SIDF, and the Economic City at KAEC. We started the AMP-2 operations with re-assembly of the Lucid Air vehicle “kits” pre-manufactured in the U.S. and, over time, will commence production of complete vehicles.

Current wording

On February 27, 2022, we announced the selection of KAEC in Saudi Arabia as the location of our first international manufacturing plant and signed related agreements with the MISA, the SIDF, and the Economic City at KAEC. We started the AMP-2 operations with re-assembly of the Lucid Air vehicle “kits” pre-manufactured in the U.S. and we expect to commence production of complete vehicles in 2027.

Previous wording

SIDF Loans will not bear interest. Instead, Lucid LLC will be required to pay SIDF service fees, consisting of follow-up and technical evaluation fees, ranging, in aggregate, from SAR 415 million (approximately $110.6 million) to SAR 1.77 billion (approximately $471.6 million), over the term of the SIDF Loans. SIDF Loans will be secured by security interests in the equipment, machines and assets funded thereby.

Current wording

SIDF Loans will not bear interest. Instead, Lucid LLC will be required to pay SIDF service fees, consisting of follow-up and technical evaluation fees, ranging, in aggregate, from SAR 415 million (approximately $110.5 million) to SAR 1.77 billion (approximately $471.1 million), over the term of the SIDF Loans. SIDF Loans will be secured by security interests in the equipment, machines and assets funded thereby.

Previous wording

In February 2022, Lucid LLC entered into agreements with MISA, a related party of the PIF, which is an affiliate of Ayar, pursuant to which MISA has agreed to provide economic support for certain capital expenditures in connection with Lucid LLC’s on-going design and construction of AMP-2. The support by MISA is subject to Lucid LLC’s completion of certain milestones related to the construction and operation of AMP-2. Following the commencement of construction, if operations at the plant do not commence within 30 months, or if the agreed scope of operations is not attained within 55 months, MISA may suspend availability of subsequent support.

Current wording

In February 2022, Lucid LLC entered into agreements with MISA, a related party of the PIF, which is an affiliate of Ayar, pursuant to which MISA has agreed to provide economic support for certain capital expenditures in connection with Lucid LLC’s ongoing design and construction of AMP-2. The support by MISA is subject to Lucid LLC’s completion of certain milestones related to the construction and operation of AMP-2. Following the commencement of construction, if operations at the plant do not commence within 30 months, or if the agreed scope of operations is not attained within 55 months, MISA may suspend availability of subsequent support.

Previous wording

During the year ended December 31, 2023, we received support of SAR 366 million (approximately $97.5 million) in cash. As of December 31, 2024, we recorded $97.5 million as a deduction in calculating the carrying amount of the related assets in the condensed consolidated balance sheet. During the year ended December 31, 2025 and three months ended March 31, 2026, there were no further deductions to the carrying value of the related assets in the condensed consolidated balance sheets. There were no unfulfilled conditions and contingencies attached to the payments received.

Current wording

During the year ended December 31, 2023, we received support of SAR 366 million (approximately $97.5 million) in cash. As of December 31, 2024, we recorded $97.5 million as a deduction in calculating the carrying amount of the related assets in the consolidated balance sheet. During the year ended December 31, 2025 and three and six months ended June 30, 2026, there were no further deductions to the carrying value of the related assets in the condensed consolidated balance sheets. There were no unfulfilled conditions and contingencies attached to the payments received.

Previous wording

On February 24, 2025, Lucid LLC entered into the 2025 GIB Credit Facility maturing on February 24, 2028 to increase the credit facility committed amount from SAR 1.0 billion (approximately $266.1 million) to SAR 1.9 billion (approximately $506.2 million). Loans under the 2025 GIB Credit Facility may be used for general corporate purposes, have a maturity of no more than 12 months, and bear interest at a rate of 1.40% per annum over SAIBOR (based on the term of borrowing) and associated fees. We are required to pay a quarterly commitment fee of 0.25% per annum based on the unutilized portion of the 2025 GIB Credit Facility. Commitments under the 2025 GIB Credit Facility will terminate, and all amounts then outstanding thereunder would become payable, on the maturity date of the 2025 GIB Credit Facility.

Current wording

On February 24, 2025, Lucid LLC entered into the 2025 GIB Credit Facility maturing on February 24, 2028 to increase the credit facility committed amount from SAR 1.0 billion (approximately $266.1 million) to SAR 1.9 billion (approximately $505.7 million). Loans under the 2025 GIB Credit Facility may be used for general corporate purposes, have a maturity of no more than 12 months, and bear interest at a rate of 1.40% per annum over SAIBOR (based on the term of borrowing) and associated fees. We are required to pay a quarterly commitment fee of 0.25% per annum based on the unutilized portion of the 2025 GIB Credit Facility. Commitments under the 2025 GIB Credit Facility will terminate, and all amounts then outstanding thereunder would become payable, on the maturity date of the 2025 GIB Credit Facility.

Previous wording

As of March 31, 2026 and December 31, 2025, we had outstanding borrowings of SAR 1,890.0 million (approximately $503.5 million) and SAR 1,755.0 million (approximately $468.0 million), respectively. The outstanding borrowings were recorded within current portion of debt in the condensed consolidated balance sheets. The weighted average interest rate on the outstanding borrowings was 6.21% and 6.44% as of March 31, 2026 and December 31, 2025, respectively. As of March 31, 2026 and December 31, 2025, availability under the GIB credit facility was SAR 8.7 million (approximately $2.3 million) and SAR 143.5 million (approximately $38.3 million), respectively, after giving effect to the outstanding letters of credit. As of March 31, 2026 and December 31, 2025, we were in compliance with applicable covenants under the GIB credit facility.

Current wording

As of June 30, 2026 and December 31, 2025, we had outstanding borrowings of SAR 1,890.0 million (approximately $503.1 million) and SAR 1,755.0 million (approximately $468.0 million), respectively. The outstanding borrowings were recorded within current portion of debt in the condensed consolidated balance sheets. The weighted average interest rate on the outstanding borrowings was 6.18% and 6.44% as of June 30, 2026 and December 31, 2025, respectively. As of June 30, 2026 and December 31, 2025, availability under the GIB credit facility was SAR 8.7 million (approximately $2.3 million) and SAR 143.5 million (approximately $38.3 million), respectively, after giving effect to the outstanding letters of credit. As of June 30, 2026 and December 31, 2025, we were in compliance with applicable covenants under the GIB credit facility.

Previous wording

The ABL Credit Facility contains customary covenants that limit our ability and our restricted subsidiaries to, among other activities, pay dividends, incur debt, create liens and encumbrances, redeem or repurchase stock, dispose of certain assets, consummate acquisitions or other investments, prepay certain debt, engage in transactions with affiliates, engage in sale and leaseback transactions or consummate mergers and other fundamental changes. The ABL Credit Facility also includes a minimum liquidity covenant which, at our option following satisfaction of certain pre-conditions, may be replaced with a springing, minimum fixed charge coverage ratio financial covenant, in each case on terms set forth in the credit agreement governing the ABL Credit Facility. As of March 31, 2026 and December 31, 2025, we were in compliance with applicable covenants under the ABL Credit Facility.

Current wording

The ABL Credit Facility contains customary covenants that limit our ability and the ability of our restricted subsidiaries to, among other activities, pay dividends, incur debt, create liens and encumbrances, redeem or repurchase stock, dispose of certain assets, consummate acquisitions or other investments, prepay certain debt, engage in transactions with affiliates, engage in sale and leaseback transactions or consummate mergers and other fundamental changes. The ABL Credit Facility also includes a minimum liquidity covenant which, at our option following satisfaction of certain pre-conditions, may be replaced with a springing, minimum fixed charge coverage ratio financial covenant, in each case on terms set forth in the credit agreement governing the ABL Credit Facility. As of June 30, 2026 and December 31, 2025, we were in compliance with applicable covenants under the ABL Credit Facility.

Previous wording

As of March 31, 2026 and December 31, 2025, we had no outstanding borrowings under the ABL Credit Facility. Outstanding letters of credit under the ABL Credit Facility were $133.4 million and $104.1 million as of March 31, 2026 and December 31, 2025, respectively. Availability under the ABL Credit Facility was $610.0 million (including $141.6 million cash and cash equivalents) and $596.0 million (including $199.2 million cash and cash equivalents) as of March 31, 2026 and December 31, 2025, respectively, after giving effect to the borrowing base and the outstanding letters of credit.

Current wording

As of June 30, 2026 and December 31, 2025, we had no outstanding borrowings under the ABL Credit Facility. Outstanding letters of credit under the ABL Credit Facility were $136.2 million and $104.1 million as of June 30, 2026 and December 31, 2025, respectively. Availability under the ABL Credit Facility was $413.3 million (including $142.9 million cash and cash equivalents) and $596.0 million (including $199.2 million cash and cash equivalents) as of June 30, 2026 and December 31, 2025, respectively, after giving effect to the borrowing base and the outstanding letters of credit.

Previous wording

In April 2026, we borrowed $500.0 million under the DDTL Credit Facility. In April 2026, we also entered into the DDTL Amendment, pursuant to which the aggregate undrawn delayed commitments under the DDTL Credit Facility were increased by $500.0 million, such that, after giving effect to such increase, the sum of outstanding delayed draw term loans and aggregate undrawn commitments was increased to approximately $2.5 billion.

Current wording

In November 2025, we increased the aggregate principal amount of the DDTL Credit Facility from $750.0 million to $1.98 billion. In April 2026, we borrowed $500.0 million under the DDTL Credit Facility. In April 2026, we also entered into the DDTL Amendment, pursuant to which the aggregate undrawn delayed commitments under the DDTL Credit Facility were increased by $500.0 million, such that, after giving effect to such increase, the aggregate sum of outstanding delayed draw term loans and aggregate undrawn commitments was increased to approximately $2.48 billion. In July 2026, we borrowed an additional $800.0 million under the DDTL Credit Facility. We are required to pay a quarterly undrawn fee of 0.50% per annum based on the unutilized portion of the DDTL Credit Facility.