What changed in this filing

/stocks — the workspaceLOADING

Item 8. Financial Statements and Supplementary Data

2024-02-27 compared with 2023-02-28 · 504 added, 384 removed, 1051 unchanged (46% of the section changed)

3 unchanged sentences

Report of Independent Registered Public Accounting Firm (PCAOB ID Number 185 )

Report of Independent Registered Public Accounting Firm (PCAOB ID Number 248 )

Consolidated Financial Statements of Lucid Group, Inc.

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Report of Independent Registered Public Accounting Firm

To the Board of Directors and Stockholders

Lucid Group, Inc.:

Opinions on the Consolidated Financial Statements and Internal Control Over Financial Reporting

We have audited the accompanying consolidated balance sheet of Lucid Group, Inc.

and subsidiaries (the Company) as of December 31, 2023, the related consolidated statements of operations and comprehensive loss, convertible preferred stock and stockholders’ equity (deficit), and cash flows for the year then ended, and the related notes (collectively, the consolidated financial statements).

We also have audited the Company’s internal control over financial reporting as of December 31, 2023, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2023, and the results of its operations and its cash flows for the year then ended, in conformity with U.S.

generally accepted accounting principles.

Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2023 based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.

Basis for Opinions

The Company’s management is responsible for these consolidated financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Report on Internal Control Over Financial Reporting.

Our responsibility is to express an opinion on the Company’s consolidated financial statements and an opinion on the Company’s internal control over financial reporting based on our audits.

We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S.

federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material respects.

Our audit of the consolidated financial statements included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements.

Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements.

Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk.

Our audits also included performing such other procedures as we considered necessary in the circumstances.

We believe that our audits provide a reasonable basis for our opinions.

Definition and Limitations of Internal Control Over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.

A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company;

(2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company;

and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.

Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that:

(1) relates to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments.

The communication of a critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Evaluation of net realizable value of certain inventories

As discussed in Notes 2 and 5 to the consolidated financial statements, the Company has inventories with a carrying value of $696.2 million as of December 31, 2023.

The Company adjusts the carrying value of inventory when the cost of inventory exceeds the estimated net realizable value.

The Company records inventory write-downs for excess or obsolete inventories based upon assumptions about current and future demand forecasts.

Additionally, the Company reviews inventory to determine whether the carrying value exceeds the net amount realizable upon the ultimate sale of the inventory, requiring the Company to determine the estimated selling price of vehicles and the estimated cost to convert the inventory on-hand into a finished product.

We identified the evaluation of the Company’s determination of net realizable value of certain inventories as a critical audit matter.

Subjective auditor judgment and significant audit effort were required to assess key inputs within the Company’s determination of net realizable value of certain inventories.

Specifically, the key inputs within the calculation include the estimated selling prices and the estimated cost to convert the inventory on-hand into a finished product.

The following are the primary procedures we performed to address this critical audit matter.

We evaluated the design and tested the operating effectiveness of certain internal controls over the Company’s inventory process, including controls related to the estimated selling prices and the estimated cost to convert the inventory on-hand into a finished product.

We evaluated estimated selling prices by comparing them to internal sales documentation, actual sales, peer company data, and relevant market information.

We evaluated the Company’s ability to accurately forecast the estimated cost to convert inventory on-hand by comparing historical production projections to actual results.

We assessed the estimated cost to convert the inventory on-hand by comparing it to future sales projections.

For certain inventories, we also evaluated the estimated cost to convert inventory on-hand by comparing the historical estimated cost to convert to actual results.

We have served as the Company’s auditor since 2023.

Santa Clara, California

February 27, 2024

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

Board of Directors and Stockholders

1 unchanged sentence

Opinion on the financial statements

We have audited the accompanying consolidated balance sheets of Lucid Group, Inc.

(a Delaware corporation) and subsidiaries (the “Company”) as of December 31, 2022 and 2021, the related consolidated statements of operations and comprehensive loss, convertible preferred stock and stockholders’ equity (deficit), and cash flows for each of the three years in the period ended December 31, 2022, and the related notes (collectively referred to as the “financial statements”).

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2022 and 2021, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2022, in conformity with accounting principles generally accepted in the United States of America.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), the Company’s internal control over financial reporting as of December 31, 2022, based on criteria established in the 2013 Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”), and our report dated February 28, 2023 expressed an unqualified opinion.

We have audited the accompanying consolidated balance sheet of Lucid Group, Inc.

(a Delaware corporation) and subsidiaries (the “Company”) as of December 31, 2022, the related consolidated statements of operations and comprehensive loss, convertible preferred stock and stockholders’ equity (deficit), and cash flows for each of the two years in the period ended December 31, 2022, and the related notes (collectively referred to as the “financial statements”).

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2022, and the results of its operations and its cash flows for each of the two years in the period ended December 31, 2022, in conformity with accounting principles generally accepted in the United States of America.

Basis for opinion

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Our responsibility is to express an opinion on the Company’s financial statements based on our audits.

We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S.

We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S.

federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

5 unchanged sentences

We believe that our audits provide a reasonable basis for our opinion.

Critical audit matter

The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that:

(1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments.

The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Valuation of Inventory – Adjustment to Net Realizable Value

As described further in Note 4 to the financial statements, the Company’s inventories totaled approximately $834.4 million as of December 31, 2022, and inventory and firm purchase commitment write-downs during the year ended December 31, 2022 were approximately $569.5 million.

As discussed in Note 2 to the financial statements, inventory is reviewed to determine whether its carrying value exceeds the net amount realizable upon the ultimate sale of the inventory.

This requires an assessment to determine the selling price of the vehicles less the estimated cost to convert the inventory on-hand into a finished product.

The principal consideration for our determination that performing procedures relating to adjustment to reduce inventory to net realizable value is a critical audit matter is the significant judgment exercised by management when developing the estimate, which in turn led to a high degree of auditor judgment and effort to perform procedures and evaluate the audit evidence obtained relating to the significant assumptions regarding production forecasts, future manufacturing and conversion costs and selling price.

Our audit procedures related to the Valuation of Inventory – Adjustment to Net Realizable Value included the following, among others:

– we tested the design and operating effectiveness of the Company’s internal controls over the process to develop the net realizable value adjustment to inventory

– we assessed the reasonableness of the significant assumptions, including evaluating the accuracy, completeness and relevance of management’s data used in developing the assumptions

/s/ GRANT THORNTON LLP

We have served as the Company’s auditor since 2020.

San Francisco, California

February 28, 2023

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

Board of Directors and Stockholders

Lucid Group, Inc.

Opinion on internal control over financial reporting

We have audited the internal control over financial reporting of Lucid Group, Inc.

(a Delaware corporation) and subsidiaries (the “Company”) as of December 31, 2022, based on criteria established in the 2013 Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”).

In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2022, based on criteria established in the 2013 Internal Control—Integrated Framework issued by COSO.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), the consolidated financial statements of the Company as of and for the year ended December 31, 2022, and our report dated February 28, 2023 expressed an unqualified opinion on those financial statements.

Basis for opinion

The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Report on Internal Control over Financial Reporting.

Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit.

We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S.

federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects.

Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances.

We believe that our audit provides a reasonable basis for our opinion.

Definition and limitations of internal control over financial reporting

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.

/s/ GRANT THORNTON LLP

We served as the Company’s auditor from 2020 to 2022.

San Francisco, California

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TOTAL ASSETS $ 8,512,718 $ 7,879,238

LIABILITIES AND STOCKHOLDERS’ EQUITY

Current liabilities:

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STOCKHOLDERS’ EQUITY

Preferred stock, par value $ 0.0001 ;

10,000,000 shares authorized as of December 31, 2022 and

no shares issued and outstanding as of December 31, 2022 and 2021

Common stock, par value $ 0.0001 ;

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( 20,716 ) ( 20,716 )

Accumulated other comprehensive loss ( 11,572 ) —

Accumulated other comprehensive income (loss)

4,850 ( 11,572 )

Accumulated deficit ( 10,198,752 ) ( 7,370,332 )

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Selling, general and administrative 797,235 734,574 652,475

Restructuring charges

Total cost and expenses 3,694,859 3,202,172 1,557,557

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Change in fair value of common stock warrant liability 86,926 1,254,218 ( 582,760 )

Change in fair value of equity securities

Transaction costs expensed — — ( 2,717 )

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Total other income (expense), net 272,194 1,289,910 ( 1,049,266 )

Loss before provision for (benefit from) income taxes ( 1,304,081 ) ( 2,579,712 ) ( 719,568 )

Provision for (benefit from) income taxes 379 49 ( 188 )

Loss before provision for income taxes

( 2,827,394 ) ( 1,304,081 ) ( 2,579,712 )

Provision for income taxes

Net loss ( 2,828,420 ) ( 1,304,460 ) ( 2,579,761 )

Deemed contribution related to repurchase of Series B convertible preferred stock — — 1,000

Deemed contribution related to repurchase of Series C convertible preferred stock — — 12,784

Deemed dividend related to the issuance of Series E convertible preferred stock — — ( 2,167,332 )

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Net loss attributable to common stockholders, diluted $ ( 2,828,420 ) $ ( 2,558,678 ) $ ( 4,747,093 )

Weighted average shares outstanding used in computing net loss per share attributable to common stockholders, basic 1,678,346,079 740,393,759 24,825,944

Weighted average shares outstanding used in computing net loss per share attributable to common stockholders, diluted 1,693,258,608 740,393,759 24,825,944

Net loss per share attributable to common stockholders, basic $ ( 0.78 ) $ ( 6.41 ) $ ( 28.42 )

Net loss per share attributable to common stockholders, diluted $ ( 1.51 ) $ ( 6.41 ) $ ( 28.42 )

Other comprehensive loss

Net unrealized losses on investments, net of tax $ ( 11,572 ) $ — $ —

Weighted average shares outstanding attributable to common stockholders

Basic 2,081,772,622 1,678,346,079 740,393,759

Diluted 2,081,772,622 1,693,258,608 740,393,759

Net loss per share attributable to common stockholders

Basic $ ( 1.36 ) $ ( 0.78 ) $ ( 6.41 )

Diluted $ ( 1.36 ) $ ( 1.51 ) $ ( 6.41 )

Other comprehensive income (loss)

Net unrealized gains (losses) on investments, net of tax

$ 12,669 $ ( 11,572 ) $ —

Foreign currency translation adjustments 3,753 — —

Total other comprehensive income (loss) 16,422 ( 11,572 ) —

Comprehensive loss ( 2,811,998 ) ( 1,316,032 ) ( 2,579,761 )

Deemed contribution related to repurchase of Series B convertible preferred stock — — 1,000

Deemed contribution related to repurchase of Series C convertible preferred stock — — 12,784

Deemed dividend related to the issuance of Series E convertible preferred stock — — ( 2,167,332 )

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Comprehensive

Loss Accumulated

Income (Loss)

Deficit Total

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Balance as of January 1, 2021

Net loss — — — — — — — ( 719,380 ) ( 719,380 )

Extinguishment and reclassification of Series B convertible preferred stock — ( 4,000 ) — — 1,000 — — — 1,000

Repurchase of Series C convertible preferred stock ( 11,507,389 ) ( 24,885 ) — — 12,784 — — — 12,784

Issuance of Series D convertible preferred stock 164,992,213 400,000 — — — — — — —

Settlement of Series D contingent forward contract liability — 39,563 — — — — — — —

Issuance of Series E convertible preferred stock 301,092,346 898,932 — — — — — — —

Settlement of Series E contingent forward contract liability — 110,456 — — — — — — —

Issuance of common stock upon exercise of stock options — — 7,502,961 1 3,284 — — — 3,285

Stock-based compensation — — — — 4,614 — — — 4,614

Balance as of December 31, 2020

957,159,704 $ 2,494,076 28,791,702 $ 3 $ 38,113 $ — $ — $ ( 1,356,893 ) $ ( 1,318,777 )

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Issuance of common stock and common stock warrants upon the reverse recapitalization, net of issuance costs — — 425,395,023 42 3,590,914 — — — 3,590,956

Issuance and sale of common stock for tax withholdings of employee RSUs — — — — ( 22,063 ) — — — ( 22,063 )

Tax withholding payments for net settlement of employee awards — — — — ( 22,063 ) — — — ( 22,063 )

Treasury stock repurchase — — ( 857,825 ) — — ( 20,716 ) — — ( 20,716 )

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Net loss — — — — — — — ( 1,304,460 ) ( 1,304,460 )

Net unrealized losses on investments, net of tax — — — — — — ( 11,572 ) — ( 11,572 )

Issuance and sale of common stock for tax withholdings of employee RSUs — — — — ( 218,789 ) — — — ( 218,789 )

Other comprehensive loss

— — — — — — ( 11,572 ) — ( 11,572 )

Tax withholding payments for net settlement of employee awards — — — — ( 218,789 ) — — — ( 218,789 )

Issuance of common stock upon vesting of employee RSUs — — 15,217,096 1 ( 1 ) — — — —

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Issuance of common stock under 2022 Subscription Agreement

— — 85,712,679 9 914,991 — — — 915,000

Stock-based compensation — — — — 423,500 — — — 423,500

1 unchanged sentence

— — 1,829,314,736 183 11,752,138 ( 20,716 ) ( 11,572 ) ( 7,370,332 ) 4,349,701

Net loss — — — — — — — ( 2,828,420 ) ( 2,828,420 )

Other comprehensive income

— — — — — — 16,422 — 16,422

Tax withholding payments for net settlement of employee awards — — — — ( 17,615 ) — — — ( 17,615 )

Issuance of common stock upon vesting of employee RSUs — — 16,947,760 2 ( 2 ) — — — —

Issuance of common stock under employee stock purchase plan — — 4,748,875 — 23,836 — — — 23,836

Issuance of common stock upon exercise of stock options — — 9,003,642 1 10,342 — — — 10,343

Issuance of common stock under Underwriting Agreement, net of issuance costs — — 173,544,948 17 1,184,207 — — — 1,184,224

Issuance of common stock under 2023 Subscription Agreement, net of issuance costs — — 265,693,703 27 1,812,614 — — — 1,812,641

Stock-based compensation — — — — 300,560 — — — 300,560

Balance as of December 31, 2023

— $ — 2,299,253,664 $ 230 $ 15,066,080 $ ( 20,716 ) $ 4,850 $ ( 10,198,752 ) $ 4,851,692

The accompanying notes are an integral part of these consolidated financial statements.

18 unchanged sentences

Change in fair value of common stock warrant liability ( 86,926 ) ( 1,254,218 ) 582,760

Net accretion of investment discounts/premiums

( 105,432 ) ( 20,695 ) —

Change in fair value of equity securities

( 5,999 ) — —

Other non-cash items 34,205 10,353 289

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Accrued compensation 29,172 30,958 16,167

Operating lease liability ( 15,482 ) ( 10,019 ) —

Other current liabilities ( 71,680 ) 253,904 55,437

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Purchases of property, plant and equipment ( 910,644 ) ( 1,074,852 ) ( 421,220 )

Proceeds from sale of property, plant and equipment — 22 —

Proceeds from government grant 97,500 97,267 —

1 unchanged sentence

Proceeds from maturities of investments 3,720,890 1,149,714 —

Proceeds from sale of short term investments — 505 —

Proceeds from insurance claims 323 — —

Proceeds from sale of investments

148,388 — 505

Other investing activities ( 4,827 ) 323 22

Net cash used in investing activities $ ( 946,975 ) $ ( 3,681,677 ) $ ( 420,693 )

The accompanying notes are an integral part of these consolidated financial statements.

LUCID GROUP, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS - continued

(in thousands)

Year Ended December 31,

2023 2022 2021

Cash flows from financing activities:

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Payment of transaction costs for the issuance of convertible notes — — ( 15,883 )

Proceeds from issuance of common stock under Underwriting Agreement, net of issuance costs 1,184,224 — —

Proceeds from issuance of common stock under 2023 Subscription Agreement, net of issuance costs 1,812,641 — —

Proceeds from issuance of common stock under At-the-Market Offering, net of issuance costs — 594,317 —

2 unchanged sentences

Payment for short-term insurance financing note — ( 15,330 ) ( 27,887 )

Payment for capital lease liabilities — — ( 364 )

Payment for finance lease liabilities ( 5,425 ) ( 4,977 ) ( 3,088 )

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Repurchase of Series B convertible preferred stock — — ( 3,000 )

Repurchase of Series C convertible preferred stock — — ( 12,101 )

Proceeds from issuance of Series D convertible preferred stock — — 3,000

6 unchanged sentences

Treasury stock repurchase — — ( 20,716 )

Stock repurchases from employees for tax withholdings ( 218,789 ) ( 22,063 ) —

Tax withholding payments for net settlement of employee awards ( 17,615 ) ( 218,789 ) ( 22,063 )

Payment for credit facility issuance costs — ( 6,631 ) —

Net cash provided by financing activities 3,070,915 1,347,235 7,136,428

Net (decrease) increase in cash, cash equivalents, and restricted cash ( 4,560,700 ) 5,657,602 260,767

Net decrease in cash, cash equivalents, and restricted cash

( 365,813 ) ( 4,560,700 ) 5,657,602

Beginning cash, cash equivalents, and restricted cash 1,737,320 6,298,020 640,418

Ending cash, cash equivalents, and restricted cash $ 1,371,507 $ 1,737,320 $ 6,298,020

The accompanying notes are an integral part of these consolidated financial statements.

LUCID GROUP, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS - continued

(in thousands)

Year Ended December 31,

2022 2021 2020

Supplemental disclosure of cash flow information:

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Supplemental disclosure of non-cash investing and financing activity:

Increases in purchases of property, plant and equipment included in Accounts payable and accrued expenses

42,728 101,057 117,946

Purchases of property, plant and equipment included in accounts payable and other current liabilities $ 35,849 $ 42,728 $ 101,057

Property, plant and equipment and right-of-use assets obtained through leases

Extinguishment of Series B convertible preferred stock included in Additional paid-in capital — — 1,000

Extinguishment of Series B convertible preferred stock included in accrued liabilities — — 3,000

Issuance of Series D convertible preferred stock upon settlement of contingent forward contracts — — 39,563

$ 32,477 $ 157,894 $ 93,771

Equity securities obtained through Strategic Technology Arrangement

$ 73,193 $ — $ —

Issuance of Series D convertible preferred stock upon exercise of preferred stock warrants $ — $ — $ 9,936

Issuance of Series E convertible preferred stock contingent forward contracts $ — $ — $ 2,167,332

Settlement of Series E convertible preferred stock contingent forward contract — — 110,456

Capital contribution upon forfeit of Series E awards $ — $ — $ 15,719

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Lucid Group, Inc.

(“Lucid”) is a technology and automotive company focused on designing, developing, manufacturing, and selling the next generation of electric vehicles (“EV”), EV powertrains and battery systems.

(“Lucid”) is a technology company focused on designing, developing, manufacturing, and selling the next generation of electric vehicles (“EV”), EV powertrains and battery systems.

Lucid was originally incorporated in Delaware on April 30, 2020 under the name Churchill Capital Corp IV (formerly known as Annetta Acquisition Corp) (“Churchill”) as a special purpose acquisition company with the purpose of effecting a merger with one or more operating businesses.

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Throughout the notes to the consolidated financial statements, unless otherwise noted, the “Company,” “we,” “us” or “our” and similar terms refer to Legacy Lucid and its subsidiaries prior to the consummation of the Merger, and Lucid and its subsidiaries after the consummation of the Merger.

The Company devotes its efforts to business planning, research and development, recruiting of management and technical staff, acquiring operating assets, and raising capital.

The Company devotes its efforts to business planning, selling and servicing of vehicles, providing technology access, research and development, construction and expansion of manufacturing facilities, expansion of retail studios and service center capacities, recruiting of management and technical staff, acquiring operating assets, and raising capital.

From inception through December 31, 2023, the Company has incurred operating losses and negative cash flows from operating activities.

For the years ended December 31, 2022, 2021 and 2020, the Company has incurred net losses of $ 1.3 billion, $ 2.6 billion and $ 719.4 million, respectively.

The Company has an accumulated deficit of $ 7.4 billion as of December 31, 2022.

During the quarter ended June 30, 2021, the Company completed the first phase of the construction of its Advanced Manufacturing Plant 1 in Casa Grande, Arizona (“AMP-1”).

The Company began commercial production of its first vehicle, Lucid Air, in September 2021 and delivered its first vehicles in late October 2021.

The Company continues to expand AMP-1, construct its planned Advanced Manufacturing Plant 2 in Saudi Arabia (“AMP-2”), and build a network of retail sales and service locations.

For the years ended December 31, 2023, 2022 and 2021, the Company has incurred net losses of $ 2.8 billion, $ 1.3 billion and $ 2.6 billion, respectively.

The Company had an accumulated deficit of $ 10.2 billion as of December 31, 2023.

The Company completed the first phase of the construction of its Advanced Manufacturing Plant-1 in Casa Grande, Arizona (“AMP-1”) in 2021, transitioned general assembly to the AMP-1 phase 2 manufacturing facility and completed the semi knocked-down (“SKD”) portion of its Advanced Manufacturing Plant-2 in Saudi Arabia (“AMP-2”) in September 2023.

The Company began commercial production of its first vehicle, the Lucid Air, in September 2021 and delivered its first vehicles in late October 2021.

The Company continues to expand AMP-1, construct the completely-built-up (“CBU”) portion of AMP-2, and build a network of retail sales and service locations.

The Company has plans for continued development of additional vehicle model types for future release.

The aforementioned activities will require considerable capital, above and beyond the expected cash inflows from the initial sales of Lucid Air.

The aforementioned activities will require considerable capital, which is above and beyond the expected cash inflows from the initial sales of the Lucid Air.

As such, the future operating plan involves considerable risk if secure funding sources are not identified and confirmed.

The Company’s existing sources of liquidity include cash, cash equivalents, investments, credit facilities and equity offering.

Historically, the Company funded operations primarily with issuances of convertible preferred stock and convertible notes.

The Company’s existing sources of liquidity include cash, cash equivalents, investments, and credit facilities.

Historically, the Company funded operations primarily with issuances of common stock, convertible preferred stock and convertible notes.

Upon the completion of the Merger, the Company received $ 4,400.3 million in cash proceeds, net of transaction costs.

In December 2021, the Company issued an aggregate of $ 2,012.5 million principal amount of 1.25 % convertible senior notes due in December 2026.

During the year ended December 31, 2022, the Company entered into a loan agreement with the Saudi Industrial Development Fund (“SIDF”) with an aggregate principal amount of up to approximately $ 1.4 billion, revolving credit facilities with Gulf International Bank (“GIB”) in an aggregate principal amount of approximately $ 266.1 million and a new five-year senior secured asset-based revolving credit facility (“ABL Credit Facility”) with an initial aggregate principal commitment amount of up to $ 1.0 billion.

In December 2021, the Company issued an aggregate principal amount of $ 2,012.5 million of 1.25 % convertible senior notes due in December 2026.

In 2022, the Company entered into a loan agreement with the Saudi Industrial Development Fund (“SIDF”) with an aggregate principal amount of up to approximately $ 1.4 billion, a five-year senior secured asset-based revolving credit facility (“ABL Credit Facility”) with an initial aggregate principal commitment amount of up to $ 1.0 billion and revolving credit facilities (the “GIB Facility Agreement”) with Gulf International Bank (“GIB”) in an aggregate principal amount of approximately $ 266.1 million.

The GIB Facility Agreement provided for two committed revolving credit facilities, of which $ 173.0 million was available as a bridge financing (the “Bridge Facility”) and $ 93.1 million was for general corporate purposes (the “Working Capital Facility”).

In March 2023, the Company amended the GIB Facility Agreement (together with the GIB Facility Agreement, the “Amended GIB Facility Agreement”) to combine the Bridge Facility and the Working Capital Facility into a committed $ 266.7 million revolving credit facility (the “GIB Credit Facility”), which will bear interest at a rate of 1.40 % per annum over SAIBOR (based on the term of borrowing) and associated fees.

See Note 7 “Debt” for more information.

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See Note 12 “Stockholders’ Equity” for more information.

On May 31, 2023, the Company entered into an underwriting agreement (the “Underwriting Agreement”) with BofA Securities, Inc.

(the “Underwriter”), under which the Underwriter agreed to purchase from the Company shares of the Company’s common stock in a public offering for aggregate net proceeds to the Company of $ 1.2 billion.

On May 31, 2023, the Company also entered into a subscription agreement (the “2023 Subscription Agreement”) with Ayar, pursuant to which Ayar agreed to purchase from the Company shares of the Company’s common stock in a private placement for aggregate net proceeds of $ 1.8 billion.

In June 2023, the Company completed the public offering pursuant to the Underwriting Agreement for aggregate net proceeds of $ 1.2 billion and also consummated the private placement to Ayar pursuant to the 2023 Subscription Agreement for aggregate net proceeds of $ 1.8 billion.

See Note 12 “Stockholders’ Equity” for more information.

Certain Significant Risks and Uncertainties

The Company’s current business activities consist of (i) generating sales from the deliveries and service of vehicles, (ii) research and development efforts to design, engineer and develop high-performance fully electric vehicles and advanced electric vehicle powertrain components, including battery pack systems, (iii) expanding production and manufacturing at existing manufacturing facilities in Casa Grande, Arizona, (iv) phase 2 of construction at AMP-1 in Casa Grande, Arizona, (v) the construction of AMP-2 in Saudi Arabia, and (vi) expansion of its retail studios and service centers capabilities throughout North America and across the globe.

The Company’s current business activities consist of (i) generating sales from the deliveries and service of vehicles, (ii) research and development efforts to design, engineer and develop high-performance fully electric vehicles and advanced electric vehicle powertrain components, including battery pack systems, (iii) further construction of AMP-1 phase 2 in Casa Grande, Arizona, (iv) construction of the CBU portion of AMP-2 in Saudi Arabia, (v) expansion of its retail studios and service centers capabilities throughout North America and across the globe, and (vi) providing its technology access to third parties.

The Company is subject to the risks associated with such activities, including the need to further develop its technology, its marketing, and distribution channels;

further develop its supply chain and manufacturing;

and hire additional management and other key personnel.

and hire additional management and other key employees.

Successful completion of the Company’s development program and, ultimately, the attainment of profitable operations are dependent upon future events, including our ability to access potential markets, and secure long-term financing.

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litigation or claims against the Company based on intellectual property (including patents), regulatory, or other factors;

and the Company’s ability to attract and retain employees necessary to support its growth.

A global economic recession or other downturn, whether due to inflation, ongoing conflict in Ukraine or other geopolitical events, COVID-19 or other public health crises, interest rate increases or other policy actions by major central banks, or other factors, may have an adverse impact on the Company’s business, prospects, financial condition and results of operations.

and the Company’s ability to attract and retain employees necessary to support its business operations.

A global economic recession or other downturn, whether due to inflation, global conflicts or other geopolitical events, COVID-19 or other public health crises, interest rate increases or other policy actions by major central banks, government closures of banks and liquidity concerns at other financial institutions, or other factors, may have an adverse impact on the Company’s business, prospects, financial condition and results of operations.

Adverse economic conditions as well as uncertainty about the current and future global economic conditions may cause the Company’s customers to defer purchases or cancel their reservations and orders in response to higher interest rates, availability of consumer credit, decreased cash availability, fluctuations in foreign currency exchange rates, and weakened consumer confidence.

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In addition, any economic recession or other downturn could also cause logistical challenges and other operational risks if any of the Company’s suppliers, sub-suppliers or partners become insolvent or are otherwise unable to continue their operations, fulfill their obligations to the Company, or meet the Company’s future demand.

In addition, the deterioration of conditions in global credit markets may limit the Company’s ability to obtain external financing to fund its operations and capital expenditures on terms favorable to the Company, if at all.

See “Risk Factors” in Item 1A of Part I of this Annual Report on Form 10-K (the “Annual Report”) for more information regarding risks associated with a global economic recession, including under the caption “ A global economic recession or other downturn may have a material adverse impact on our business, prospects, results of operations and financial condition .

The COVID-19 pandemic has impacted the global economy and caused significant macroeconomic uncertainty.

Infection rates vary across the jurisdictions in which the Company operates.

The Company has taken proactive action and expects to continue to implement appropriate measures to protect the health and safety of its employees, customers, partners and suppliers, consistent with the latest and evolving governmental guidelines.

The Company continues to monitor the evolving situation and guidance from international and domestic authorities, including federal, state and local public health authorities, and may take additional actions based on their recommendations and requirements or as the Company otherwise sees fit to protect the health and safety of its employees, customers, partners and suppliers.

While certain of the Company and its suppliers’ operations have from time-to-time been temporarily affected by government-mandated restrictions, the Company was able to commence and continue deliveries of Lucid Air to customers and to proceed with the construction of AMP-1 and AMP-2.

Broader impacts of the pandemic have included inflationary pressure as well as ongoing, industry-wide challenges in logistics and supply chains, such as increased supplier lead times and ongoing constraints of semiconductor supply.

Because the Company relies on third party suppliers for the development, manufacture, and/or provision and development of many of the key components and materials used in its vehicles, as well as provisioning and servicing equipment in its manufacturing facilities, the Company has been affected by inflation and such industry-wide challenges in logistics and supply chains.

While the Company continues to focus on mitigating risks to its operations and supply chain in the current industry environment, the Company expects that these industry-wide trends will continue to impact its cost structure as well as its ability and the ability of its suppliers to obtain parts, components and manufacturing equipment on a timely basis for the foreseeable future.

In addition, the deterioration of conditions in the broad financing markets may limit the Company’s ability to obtain external financing to fund its operations and capital expenditures on terms favorable to the Company, if at all.

See “Risk Factors” in Item 1A of Part I of this Annual Report on Form 10-K (the “Annual Report”) for more information regarding risks associated with a global economic recession, including under the caption “ A global economic recession, government closures of banks and liquidity concerns at other financial institutions, or other downturn may have a material adverse impact on our business, prospects, results of operations and financial condition .

In the current circumstances, any impact on the Company’s financial condition, results of operations or cash flows in the future continues to be difficult to estimate and predict, as it depends on future events that are highly uncertain and cannot be predicted with accuracy.

See “Risk Factors” in Item 1A of Part I of this Annual Report for additional information regarding risks associated with the COVID-19 pandemic, including under the caption “ The COVID-19 pandemic has adversely affected, and we cannot predict its ultimate impact on, our business, prospects, results of operations and financial condition.

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

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The Company’s CODM is its Chief Executive Officer.

The Company has determined that it operates in one operating and reporting segment and one reportable segment, as the CODM reviews financial information presented on a consolidated basis for purposes of making operating decisions, allocating resources, and evaluating financial performance.

The Company has determined that it operates in one operating and one reportable segment, as the CODM reviews financial information presented on a consolidated basis for purposes of making operating decisions, allocating resources, and evaluating financial performance.

Use of Estimates

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Actual results could differ from those estimates.

Significant estimates, assumptions and judgments made by management include, among others, inventory valuation, warranty reserve, the useful lives of property, plant and equipment, fair value of common stock warrants, fair value of contingent forward contracts liability, estimates of residual value guarantee (“RVG”) liability and deferred revenue related to over-the-air (“OTA”) software updates, fair value of common stock prior to the Merger and other assumptions used to measure stock-based compensation expense, and estimated incremental borrowing rates for assessing operating and financing leases.

Significant estimates, assumptions and judgments made by management include, among others, inventory valuation, warranty reserve, useful lives of property, plant and equipment, fair value of common stock warrants, fair value of contingent forward contracts liability, estimates of residual value guarantee (“RVG”) liability, deferred revenue related to technology access fees and over-the-air (“OTA”) software updates, sales return reserves, fair value of common stock prior to the Merger and other assumptions used to measure stock-based compensation expense, and estimated incremental borrowing rates for assessing operating and finance leases.

These estimates and assumptions are based on management’s best estimates and judgment.

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Restricted cash included in other current assets

1,560 1,555 10,740

Restricted cash included in other noncurrent assets

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The Company classifies its investments as either short-term or long-term based on each instrument’s underlying contractual maturity date.

Unrealized gains and losses on our investments of available-for-sale securities are recorded in Accumulated other comprehensive loss which is included within stockholders’ equity.

Interest, as well as amortization and accretion of purchase premiums and discounts on our investments of available-for-sale securities are included in Interest income.

Unrealized gains and losses on our investments of available-for-sale securities are recorded in accumulated other comprehensive income (loss) which is included within stockholders’ equity.

Interest, as well as amortization and accretion of purchase premiums and discounts on its investments of available-for-sale securities are included in interest income.

The cost of securities sold is determined using the specific identification method.

Realized gains and losses on the sale of available-for-sale securities are recorded in Other income (expense), net.

Realized gains and losses on the sale of available-for-sale securities are recorded in other income (expense), net in the consolidated statements of operations and comprehensive loss.

The Company regularly reviews its investment portfolio of available-for-sale securities for allowance for credit losses.

Factors considered include severity of declines in fair values below amortized costs, adverse conditions related to securities, creditworthiness of the security issuers, and collectability of principal and interest payments.

Equity Securities

The Company’s equity securities with readily determinable fair value are measured and stated at fair value with unrealized gains and losses recorded in the consolidated statements of operations and comprehensive loss.

Accounts Receivable, Net

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The Company provides an allowance against accounts receivable for any potential uncollectible amounts.

The Company recorded an immaterial allowance for uncollectible amounts as of December 31, 2022.

No allowance was recorded at December 31, 2021.

The Company recorded immaterial allowance for uncollectible amounts as of December 31, 2023 and 2022.

Concentration of Credit Risk

Financial instruments that potentially subject the Company to concentration of credit risk consist of cash, cash equivalents, and investments.

Financial instruments that potentially subject the Company to concentration of credit risk consist of cash, cash equivalents, investments and accounts receivable.

The Company places its cash primarily with domestic financial institutions that are federally insured within statutory limits, but at times its deposits may exceed federally insured limits.

As of December 31, 2023, accounts receivables from the EV purchase agreement with the Government of Saudi Arabia, a related party of PIF, which is an affiliate of Ayar, as represented by the Ministry of Finance (the “EV Purchase Agreement”), represented 68.5 % of the total accounts receivable balance.

See Note 20 “Related Party Transactions” for more information.

Concentration of Supply Risk

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The Company records inventory write-downs for excess or obsolete inventories based upon assumptions about current and future demand forecasts.

If inventory on-hand is in excess of future demand forecast, the excess amounts are written-off.

If inventory on-hand is in excess of future demand forecast and market conditions, the excess amounts are written-off.

Inventory is also reviewed to determine whether its carrying value exceeds the net amount realizable upon the ultimate sale of the inventory.

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In the event there are changes in our estimates of future selling prices or production costs, the Company may be required to record additional and potentially material write-downs.

A small change in the Company’s estimates may result in a material change in its reported financial results.

Property, Plant, and Equipment, Net

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Depreciation is recorded using the straight-line method over the estimated useful lives of the related assets.

We capitalize qualified costs incurred during the application development stage of internal use software.

Interest expense capitalized for significant capital asset construction in progress is included within property, plant and equipment, net and is amortized over the life of the related assets.

The Company capitalizes qualified costs incurred during the application development stage of internal use software.

Costs incurred during the preliminary project stage and post-implementation stage are expensed.

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Asset Category Life (years)

Machinery, Tooling & Vehicles 3 - 7

Machinery, tooling and vehicles

Computer equipment and software 3

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Building and improvements

Leasehold improvements Shorter of the lease term or the estimated useful lives of the assets

Leasehold improvements Shorter of remaining lease term or the estimated useful lives of the assets

Expenditures for repair and maintenance costs are expensed as incurred, and expenditures for major renewals and improvements that increase functionality of the asset are capitalized and depreciated ratably over the identified useful life.

Upon disposition or retirement of property and equipment, the related cost and accumulated depreciation and amortization are removed, and any gain or loss is reflected in operations.

Upon disposition or retirement of property and equipment, the related cost and accumulated depreciation and amortization are removed, and any gain or loss is reflected in the consolidated statement of operations and comprehensive loss.

The disposition loss on fixed assets recorded for the years ended December 31, 2023, 2022 and 2021 was immaterial.

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If the carrying amount of the long-lived asset or asset group is not recoverable on an undiscounted cash flow basis, an impairment is recognized to the extent the carrying amount of the underlying asset exceeds its fair value.

Impairment loss recognized was immaterial for the year ended December 31, 2022 , and no impairment loss was recognized for the years ended December 31, 2021 and 2020 .

The Company recognized impairment loss of $ 15.3 million for the year ended December 31, 2023.

I mpairment loss recognized for the years ended December 31, 2022 and 2021 was immaterial .

The Company has lease agreements with lease and non-lease components and has elected not to utilize the practical expedient to account for lease and non-lease components together, rather the Company accounts for the lease and non-lease components separately in the consolidated financial statements.

The Company has also elected not to record ROU assets and corresponding lease liabilities for short-term leases having initial terms of 12 months or less if the leases do not contain a purchase option or renewal term that the Company is reasonably certain to exercise.

Instead, the Company recognizes lease payments on a straight-line basis over the lease term.

Operating lease assets are included within operating lease ROU assets.

Finance lease assets are included within property, plant and equipment, net.

The corresponding operating lease liabilities are included within other current liabilities and other long-term liabilities;

the finance lease liabilities are included within finance lease liabilities, current portion and finance lease liabilities, net of current portion on the Company’s consolidated balance sheets as of December 31, 2023 and 2022.

All lease assets and lease liabilities are recognized based on the present value of lease payments over the lease term.

The Company estimates the Company’s incremental borrowing rate based on the information available at lease commencement date in determining the present value of lease payments.

Foreign Currency

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Revenue and expenses are translated at the average exchange rate prevailing during the period.

Any resulting translation adjustments are included in Accumulated other comprehensive loss.

Any resulting translation adjustments are included in accumulated other comprehensive income (loss).

The assets and liabilities of foreign subsidiaries whose local currency is not their functional currency are remeasured from their local currency to their functional currency and then translated to U.S.

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Shipping and handling provided by Company is considered a fulfillment activity.

Payment is typically received at or prior to the transfer of control of the vehicle to the customer.

Payment is typically received at or prior to the transfer of control of the vehicle to the customer, except for vehicle sales under the EV Purchase Agreement.

Generally, control transfers to the customer at the time of delivery when the customer takes physical possession of the vehicle, which may be at a Lucid studio or other destination chosen by the customer.

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As the unspecified OTA software updates are provided when-and-if they become available, revenue related to OTA software updates is recognized ratably over the basic vehicle warranty term, commencing when control of the vehicle is transferred to the customer.

At the time of revenue recognition, we reduce the transaction price and record a sales return reserve against revenue for estimated variable consideration related to future product returns.

Such return rate estimates are based on historical experience and were immaterial for the years ended December 31, 2022 and 2021.

At the time of revenue recognition, the Company reduces the transaction price and records a sales return reserve against revenue for estimated variable consideration related to future product returns.

Return rate estimates are based on historical experience and sales return reserve balance was not material as of December 31, 2023 and 2022.

The Company provides a manufacturer’s warranty on all vehicles sold.

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Under the vehicle leasing program, the Company generally receives full payment for the vehicle sales price at the time of delivery or shortly after delivery, does not bear casualty and credit risks during the lease term, and is contractually obligated (or entitled) to share a portion of the shortfall (or excess) between the resale value realized by the commercial banking partner and a predetermined resale value.

During the year ended December 31, 2022, vehicle sales with RVG totaled $ 31.1 million.

During the years ended December 31, 2023 and 2022, vehicle sales with RVG totaled $ 190.9 million and $ 31.1 million, respectively.

At the lease inception, the Company is required to deposit cash collateral equal to a contractual percentage of the residual value of the leased vehicles with the commercial banking partner.

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The Company evaluates variables such as third-party residual value publications, risk of future price deterioration due to changes in market conditions and reconditioning costs to determine the estimated residual value guarantee liability.

As of December 31, 2022, the RVG liability was not material.

As we accumulate more data related to the resale value of our vehicles or as market conditions change, there could be material changes to the estimated guarantee liabilities.

Deferred revenue related to OTA and remarketing activities for vehicle sales were $ 15.4 million as of December 31, 2022 and was immaterial as of December 31, 2021.

Other consists of revenue from non-warranty after-sales vehicle services, sales of battery pack system, powertrain kits and retail merchandise.

The RVG liabilities were not material as of December 31, 2023 and 2022.

As the Company accumulates more data related to the resale value of our vehicles or as market conditions change, there could be material changes to the estimated guarantee liabilities.

As of December 31, 2023 and 2022, the Company recorded $ 28.7 million and $ 15.4 million of total deferred revenue related to OTA and remarketing activities for vehicle sales, respectively.

The Company recorded $ 7.7 million and $ 4.0 million of the total deferred revenue within other current liabilities and the remaining $ 21.0 million and $ 11.4 million within other long-term liabilities in the consolidated balance sheets as of December 31, 2023 and 2022, respectively.

Revenue recognized during the years ended December 31, 2023 and 2022 from the prior period deferred revenue balances was not material.

Other consists of revenue from non-warranty after-sales vehicle services, sales of battery pack systems, powertrain kits, retail merchandise, and regulatory credits.

Battery pack system and powertrain kits revenue consists of the sales of battery pack systems or powertrain kits, supplies and related services for vehicles.

The sale of battery pack systems or powertrain kits along with related supplies is a single performance obligation recognized at the point in time when control is transferred to the customer.

The sale of battery pack systems, powertrain kits along with related supplies, and regulatory credits is a single performance obligation recognized at the point in time when control is transferred to the customer.

Shipping and handling provided by the Company is considered a fulfillment activity.

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Customer remedies may include either a cash refund or an exchange of the returned product.

As a result, the right of return and related refund liability for non-conforming or defective goods is estimated and recorded as a reduction in revenue, if necessary.

Payment for the products sold are made upon invoice or in accordance with payment terms customary to the business.

Payment for the products sold are received upon invoice or in accordance with payment terms customary to the business.

The Company’s battery pack system or powertrain kits contracts do not contain a significant financing component.

The Company has elected to exclude sales taxes from the measurement of the transaction price.

Control transfers to the customer when the product is delivered to the customer as the customer can then direct the product’s use and obtain substantially all of the remaining benefits from the asset at that point in time.

Control transfers to the customer when the product or regulatory credit is delivered or transferred to the customer as the customer can then direct the use of the product or regulatory credit and obtain substantially all of the remaining benefits from the asset at that point in time.

Cost of Revenue

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Cost of vehicle sales includes direct parts, materials, shipping and handling costs, allocable overhead costs such as depreciation of manufacturing related equipment and facilities, information technology costs, personnel costs, including wages and stock-based compensation, estimated warranty costs, charges to reduce inventories to their net realizable value, charges for any excess or obsolete inventories, and losses from firm purchase commitments.

Cost of other revenue includes direct parts, material and labor costs, manufacturing overhead, including amortized tooling costs, shipping and logistic costs.

Cost of other revenue includes direct parts, material and labor costs, manufacturing overhead, including depreciation of tooling costs, shipping and logistic costs.

Cost of other revenue also includes costs associated with providing non-warranty after-sales services and costs for retail merchandise.

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These estimates are based on actual claims incurred to date and an estimate of the nature, frequency, and costs of future claims.

The Company accrues a warranty reserve for all products sold which includes the Company’s best estimates of the projected costs to repair or replace items under warranties and recalls when identified.

The Company accrues a warranty reserve for all products sold which includes the Company’s best estimates of the projected costs related to recalls identified and special campaigns to repair or replace items under warranties.

Changes to the Company’s historical or projected warranty experience may cause material changes to the warranty reserve in the future.

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The Company accounts for forfeitures of stock-based awards when they occur.

The fair value of RSUs granted prior to the Closing of the Merger that vest based on service and performance conditions and RSUs granted after Closing of the Merger that vest only based on service conditions, is measured using the fair value of the Company’s common stock on the date of the grant.

The fair value of RSUs that vest based on service and/or performance conditions is measured using the fair value of the Company’s common stock on the date of the grant.

The fair value of RSUs that vest based on service and market conditions is measured using a Monte Carlo simulation model on the date of grant.

The fair value of stock options that vest based on service condition is measured using the Black-Scholes option pricing model on the date of grant.

The Monte Carlo simulation model and the Black-Scholes option pricing model requires the input of highly subjective assumptions, including the fair value of the Company’s common stock, the expected term of the award, the expected volatility of the Company’s common stock, risk-free interest rates, and the expected dividend yield of the Company’s common stock.

The Monte Carlo simulation model and the Black-Scholes option pricing model require the input of assumptions, including the fair value of the Company’s common stock, the expected term of the award, the expected volatility of the Company’s common stock, risk-free interest rates, and the expected dividend yield of the Company’s common stock.

The assumptions used to determine the fair value of the awards represent management’s best estimates.

These estimates involve inherent uncertainties and the application of management’s judgment.

The fair value of awards that vest based on only continuous service are recognized on a straight-line basis over the requisite service period.

The fair value of awards that vest based on only continuous service is recognized on a straight-line basis over the requisite service period.

The fair value of awards that vest based on performance or market conditions is recognized over the requisite service period using the accelerated attribution method.

Stock-based compensation expense is only recognized for awards with performance conditions once the performance condition becomes probable of being achieved.

The performance-based vesting condition was satisfied upon the Closing of the Merger .

The market-based RSUs will vest only if the Company achieves certain market capitalization targets.

The performance-based RSUs granted prior to the Closing of the Merger vested upon the Closing of the Merger .

The performance-based RSUs granted after the Closing of the Merger will vest based on the actual achievement of corporate performance goals and individual performance.

The RSUs with market conditions will vest only if the Company achieves certain market capitalization targets.

Comprehensive Loss

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net loss and other comprehensive income (loss).

Other comprehensive income (loss) refers to net unrealized gains or losses on investments that are recorded as an element of stockholders’ equity and are excluded from the determination of net loss.

Other comprehensive income (loss) refers to net unrealized gains or losses on investments in available-for sale securities and foreign currency translation adjustments that are recorded as an element of stockholders’ equity and are excluded from the determination of net loss.

Research and Development

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Selling, general and administrative expense consist of personnel-related expenses for employees involved in general corporate, selling and marketing functions, including executive management and administration, legal, human resources, facilities and real estate, accounting, finance, tax, and information technology.

Advertising is expensed as incurred and is included in sales and marketing expenses in the consolidated statements of operations and comprehensive loss.

Advertising costs are expensed as incurred and are included in sales and marketing expenses in the consolidated statements of operations and comprehensive loss.

Advertising costs were $ 35.3 million for the year ended December 31, 2023.

These costs were not material for the years ended December 31, 2022 and 2021, respectively.

As of January 1, 2021, the Company adopted ASU 2016-02, Leases, and all related guidance (“ASC 842”) and recorded a ROU asset and a corresponding lease liability in our consolidated balance sheets for all eligible leases with terms longer than 12 months or less if the lease contains a purchase option or renewal term that the Company is reasonably certain to exercise.

The Company has lease agreements with lease and non-lease components and has elected not to utilize the practical expedient to account for lease and non-lease components together, rather the Company is accounting for the lease and non-lease components separately on the consolidated financial statements.

Operating lease assets are included within operating lease ROU assets.

Finance lease assets are included within Property, plant and equipment, net.

The corresponding operating lease liabilities are included within Other current liabilities and Other long-term liabilities;

the finance lease liabilities are included within Finance lease liabilities, current portion and Finance lease liabilities, net of current portion on the Company’s consolidated balance sheets as of December 31, 2022 and 2021.

All other lease assets and lease liabilities are recognized based on the present value of lease payments over the lease term at the later of ASC 842 adoption date or lease commencement date.

The Company estimates the Company’s incremental borrowing rate based on the information available at adoption date or lease commencement date in determining the present value of lease payments.

Restructuring

The Company’s restructuring charges primarily consist of severance payments, employee benefits, employee transition and stock-based compensation expenses associated with the management-approved restructuring plan.

One-time employee termination benefits are recognized at the time of communication to employees, unless future service is required, in which case the costs are recognized over the future service period.

Ongoing employee termination benefits are recognized when payments are probable and amounts are reasonably estimable.

Other costs are recognized as incurred.

Commitments and Contingencies

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Potentially dilutive shares of Private Placement Warrants under treasury stock method are included in the computation of diluted net loss per share when their effect is dilutive.

For purposes of this calculation, convertible preferred stock, convertible preferred stock warrants, Private Placement Warrants, stock options outstanding, RSUs outstanding, shares issued under ESPP and if-converted common shares from convertible note are considered to be common stock equivalents.

For purposes of this calculation, Private Placement Warrants, stock options outstanding, RSUs outstanding, potential shares issued under ESPP and if-converted common shares from convertible note are considered to be common stock equivalents.

Common Stock Warrants

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Government Grants

Government grants are recognized when the grants are received, and all the conditions specified in the grant have been met.

The Company recognizes government grants once there is reasonable assurance to receive the grants and meet all the conditions specified in the grants.

Grants related to income are recorded as deductions to the related expenses for which the grants are intended to compensate.

Grants related to fixed assets are recorded as a deduction in calculating the carrying amount of the related assets and are recognized in profit or loss over the life of a depreciable asset through reduced depreciation expense.

Grants received in advance of the acquisition or construction of assets are recorded initially in deferred liability and then as a deduction in calculating the carrying amount of the related fixed assets upon acquisition or construction of the assets.

Grant receipts are classified as investing cash inflows on a gross basis on the consolidated statements of cash flows.

Recently Adopted Accounting Pronouncements

In November 2021, the Financial Accounting Standards Board (“FASB”) issued ASU No.

2021-10, Government Assistance (Topic 832):

Disclosures by Business Entities about Government Assistance, which requires annual disclosures about transactions with a government that are accounted for by applying a grant or contribution accounting model by analogy.

The disclosure requirements include information about the nature of the transactions and the related accounting policy, the line items on the balance sheet and income statement that are affected by the transactions, the amount applicable to each financial statement line and significant terms and conditions of the transactions.

The guidance is effective for annual periods beginning after December 15, 2021 and can be applied either prospectively or retrospectively.

The Company adopted ASU 2021-10 prospectively on January 1, 2022.

The adoption of this guidance did not have a material impact to the consolidated financial statements and related disclosures.

Recently Issued Accounting Pronouncements Not Yet Adopted

In November 2021, FASB issued ASU No.

2021-08, Business Combinations (Topic 805):

Accounting for Contract Assets and Contract Liabilities from Contracts with Customers, which requires that an entity (acquirer) recognize and measure contract assets and contract liabilities acquired in a business combination on the acquisition date in accordance with Topic 606, as if the acquirer had originated the contracts.

This guidance is effective for annual periods beginning after December 15, 2022, including interim periods within those fiscal years, and should be applied prospectively.

The Company does not expect this guidance to have a material impact to the consolidated financial statements.

In November 2023, the Financial Accounting Standards Board (“FASB”) issued ASU No.

2023-07, Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures, which requires incremental segment information disclosure on an annual and interim basis.

This amendment includes disclosure of significant segment expenses which are regularly provided to the CODM and included within each reported measure of segment profit or loss;

other segment items by reportable segment and a description of its composition;

reportable segment’s profit or loss and assets;

additional measures of segment profit or loss if the CODM uses more than one measure of a segment’s profit or loss in assessing segment performance, and the title and position of the entity’s CODM and how the CODM uses the reported measures of segment profit or loss in assessing segment performance and determining resource allocation.

The Company with a single reportable segment is required to provide all the disclosures from this amendment.

The guidance is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024.

Early adoption is permitted, and should be applied retrospectively.

The Company is evaluating the impact of this amendment to the related financial statement disclosures.

In December 2023, the FASB issued ASU No.

2023-09, Income Taxes (Topic 740):

Improvements to Income Tax Disclosures, which requires incremental annual income tax disclosures.

This amendment includes disclosures of specific categories in the rate reconciliation and additional information for reconciling items that meet a quantitative threshold;

income taxes paid (net of refunds received) disaggregated by federal, state, and foreign taxes, and also disaggregated by individual jurisdictions that meet a quantitative threshold;

income (or loss) from continuing operations before income tax expenses (or benefit) disaggregated between domestic and foreign;

and income tax expense (or benefit) from continuing operations disaggregated by federal, state and foreign.

The guidance is effective for annual periods beginning after December 15, 2024.

Early adoption is permitted and should be applied prospectively (with retrospective application permitted).

The Company is evaluating the impact of this amendment to the related financial statement disclosures.

The Company has considered all other recently issued accounting pronouncements and does not believe the adoption of such pronouncements will have a material impact on its financial statements or notes thereto.

NOTE 3 - RESTRUCTURING

On March 28, 2023, the Company announced a restructuring plan (the “Restructuring Plan”) intended to reduce operating expenses in response to evolving business needs and productivity improvement through a reduction in workforce.

The Company substantially completed the Restructuring Plan in 2023.

During the year ended December 31, 2023, the Company recorded charges of $ 24.5 million related to severance payments, employee benefits, employee transition and stock-based compensation, net of a reversal of previously recognized stock-based compensation expense.

These charges were recorded within restructuring charges in the consolidated statements of operations and comprehensive loss.

A summary of restructuring liabilities associated with the Restructuring Plan was as follows (in thousands):

December 31, 2023

Restructuring liabilities - beginning of period $ —

Restructuring charges excluding non-cash items (1)

Cash payments ( 25,935 )

Restructuring liabilities - end of period $ 54

(1) Excluded non-cash items of $ 1.4 million for the year ended December 31, 2023, which was net of accelerated stock-based compensation expense of $ 3.4 million and a reversal of $ 4.8 million related to previously recognized stock-based compensation expenses for unvested restricted stock awards.

As of December 31, 2023, restructuring liabilities associated with the Restructuring Plan included in accrued compensation in the consolidated balance sheet was immaterial.

NOTE 4 – REVERSE RECAPITALIZATION

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Total Inventory $ 696,236 $ 834,401

Inventory as of December 31, 2022 and 2021 was comprised of raw materials, work in progress related to the production of vehicles for sale and finished goods inventory including new vehicles available for sale and vehicles in transit to fulfill customer orders.

During the years ended December 31, 2022 and 2021, we recorded write-downs of $ 569.5 million and $ 48.9 million, respectively, to reduce our inventories to their net realizable values, for any excess or obsolete inventories, and losses from firm purchase commitments.

No write-down was recorded for the year ended December 31, 2020.

Inventory as of December 31, 2023 and 2022 was comprised of raw materials, work in progress related to the production of vehicles for sale and SKD units for final assembly in Saudi Arabia, and finished goods inventory including new vehicles available for sale, vehicles in transit to fulfill customer orders, and internally used vehicles which the Company intends to sell.

During the years ended December 31, 2023, 2022, and 2021, the Company recorded write-downs of $ 926.9 million, $ 569.5 million, and $ 48.9 million, respectively, to reduce its inventories to its net realizable values, for any excess or obsolete inventories, and losses from firm purchase commitments.

Property, plant and equipment, net

Property, plant and equipment, net as of December 31, 2022 and 2021 were as follows (in thousands):

Property, plant and equipment, net as of December 31, 2023 and 2022 was as follows (in thousands):

2023 December 31,

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Building and improvements (1)

576,097 197,406

Machinery, tooling and vehicles (2)

1,045,485 743,006

Computer equipment and software 74,336 48,899

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Property, plant and equipment, net $ 2,810,867 $ 2,166,776

(1) As of December 31, 2023, $ 120.2 million of capital expenditure support received from Ministry of Investment of Saudi Arabia (“MISA”) was primarily recorded as a deduction to the AMP-2 building balance.

See Note 20 “Related Party Transactions” for more information.

(2) Included $ 32.5 million of service loaner vehicles as of December 31, 2023.

Construction in progress represents the costs incurred in connection with the construction of buildings or new additions to the Company’s plant facilities including tooling, which is with outside vendors.

Costs classified as construction in progress include all costs of obtaining the asset and bringing it to the location in the condition necessary for its intended use.

No depreciation is provided for construction in progress until such time as the assets are completed and are ready for its intended use.

Costs classified as construction in progress include all costs of obtaining the asset, installation of the asset, and bringing it to the location and the condition necessary for its intended use.

No depreciation is provided for construction in progress until such time as the asset is completed and is ready for its intended use.

Construction in progress consisted of the following (in thousands):

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Total construction in progress $ 1,185,413 $ 1,077,179

(1) As of December 31, 2022, $ 33.3 million of capital expenditure support received from Ministry of Investment of Saudi Arabia (“MISA”) was recorded as a deduction to the AMP-2 construction in progress balance.

(1) As of December 31, 2023 and 2022, $ 12.1 million and $ 33.3 million, of capital expenditure support received from MISA was recorded primarily as a deduction to the AMP-2 facility construction in progress balance, respectively.

See Note 2 “Summary of Significant Accounting Policies” and Note 20 “Related Party Transactions” for more information.

Depreciation and amortization expense was $ 233.5 million, $ 186.6 million and $ 62.9 million for the years ended December 31, 2023, 2022 and 2021, respectively.

The amount of interest capitalized on construction in progress related to significant capital asset construction was $ 2.7 million for the year ended December 31, 2022.

No interest was capitalized for the years ended December 31, 2021 and 2020.

The amount of interest capitalized on construction in progress related to significant capital asset construction was $ 12.4 million and $ 2.7 million for the years ended December 31, 2023 and 2022, respectively.

No interest was capitalized for the year ended December 31, 2021.

Other current liabilities

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Retail leasehold improvements accrual 6,005 9,099

Other professional services accrual 34,951 13,944

Third-party services accrual 41,478 34,951

Tooling liability 49,925 21,714

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Operating lease liabilities, current portion 28,431 11,269

Reserve for loss on firm inventory purchase commitments 143,566 22,640

Accrued warranty 22,677 10,464

Other current liabilities 190,828 161,525

Total other current liabilities

(1) Accrued purchases primarily represent inventory purchases and related transportation charges that had not been invoiced.

$ 798,990 $ 634,567

(1) Primarily represent accruals for inventory related purchases and transportation charges that had not been invoiced.

Other long-term liabilities

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Total other long-term liabilities

(1) As of December 31, 2022, $ 64.0 million of capital expenditure support received from MISA was recorded as deferred liability within other long-term liabilities.

$ 524,339 $ 378,212

(1) As of December 31, 2023 and 2022, $ 62.5 million and $ 64.0 million, of capital expenditure support received from MISA was recorded as deferred liability within other long-term liabilities in the consolidated balance sheets, respectively.

See Note 2 “Summary of Significant Accounting Policies” and Note 20 “Related Party Transactions” for more information.

(2) As of December 31, 2023, $ 107.8 million of deferred revenue was recorded within other long-term liabilities in the consolidated balance sheet, in connection with the strategic technology and supply arrangement, and integration and supply arrangements with Aston Martin Lagonda Global Holdings plc (together with its subsidiaries, “Aston Martin”).

See Note 20 “Related Party Transactions” for more information.

Accrued warranty

Accrued warranty activities consisted of the following (in thousands):

December 31, 2022

Year Ended December 31,

Accrued warranty - beginning of period

$ 22,949 $ 1,282

Warranty costs incurred ( 50,923 ) ( 11,557 )

Provision for warranty (1)

74,050 33,224

Accrued warranty - end of period (2)

(1) Accrued warranty balance as of December 31, 2022 included estimated costs related to the recalls identified.

(2) Accrued warranty balance of $ 10.4 million and $ 12.5 million were recorded within Other current liabilities and Other long-term liabilities, respectively, on our consolidated balance sheet.as of December 31, 2022 .

$ 46,076 $ 22,949

(1) Provision for warranty for the years ended December 31, 2023 and 2022 included estimated costs related to the recalls identified and/or special campaigns to repair or replace items under warranties.

(2) Accrued warranty balance of $ 22.7 million and $ 10.4 million, respectively, was recorded within other current liabilities, and $ 23.4 million and $ 12.5 million, respectively, was recorded within other long-term liabilities, in the consolidated balance sheets as of December 31, 2023 and 2022.

NOTE 6 - FAIR VALUE MEASUREMENTS AND FINANCIAL INSTRUMENTS

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Amortized cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value Cash and cash equivalents Short-Term Investments Long-Term Investments

Cash and cash equivalents $ 321,667 $ — $ — $ 321,667 $ 321,667 $ — $ —

Cash $ 516,673 $ — $ — $ 516,673 $ 516,673 $ — $ —

Money market funds 698,702 — — 698,702 698,702 — —

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Subtotal 2,732,413 2,480 ( 2,073 ) 2,732,820 803,274 1,638,537 291,009

government agency securities 43,477 46 ( 18 ) 43,505 — 43,505 —

Certificates of deposit 105,993 97 ( 22 ) 106,068 — 106,068 —

Time deposits

50,000 — — 50,000 50,000 — —

Commercial paper 299,248 191 ( 8 ) 299,431 — 299,431 —

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Subtotal 1,070,591 1,389 ( 699 ) 1,071,281 50,000 851,261 170,020

Total assets measured at fair value $ 4,454,542 $ 535 $ ( 12,107 ) $ 4,442,970 $ 1,735,765 $ 2,177,231 $ 529,974

$ 4,319,677 $ 3,869 $ ( 2,772 ) $ 4,320,774 $ 1,369,947 $ 2,489,798 $ 461,029

December 31, 2022

Cash and cash equivalents

Amortized cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value Cash and cash equivalents Short-Term Investments Long-Term Investments

Cash $ 321,667 $ — $ — $ 321,667 $ 321,667 $ — $ —

Money market funds 1,377,540 — — 1,377,540 1,377,540 — —

Total assets measured at fair value $ 6,262,905

During the year ended December 31, 2022, there were immaterial realized gains or losses on the sale of available-for-sale securities.

Accrued interest receivable excluded from both the fair value and amortized cost basis of the available-for-sale securities was $ 7.5 million as of December 31, 2022, and is recorded in Other current assets on our consolidated balance sheets.

As of December 31, 2022, no allowance for credit losses was recorded related to an impairment of available-for-sale securities.

Treasury securities 1,861,449 151 ( 9,431 ) 1,852,169 — 1,570,591 281,578

Subtotal 3,238,989 151 ( 9,431 ) 3,229,709 1,377,540 1,570,591 281,578

government agency securities 43,477 46 ( 18 ) 43,505 — 43,505 —

Certificates of deposit 174,037 67 ( 132 ) 173,972 — 173,972 —

Commercial paper 238,224 63 ( 122 ) 238,165 19,761 218,404 —

Corporate debt securities 438,148 208 ( 2,404 ) 435,952 16,797 170,759 248,396

Subtotal 893,886 384 ( 2,676 ) 891,594 36,558 606,640 248,396

Total $ 4,454,542 $ 535 $ ( 12,107 ) $ 4,442,970 $ 1,735,765 $ 2,177,231 $ 529,974

During the years ended December 31, 2023 and 2022, there were immaterial realized gains or losses on the sale of available-for-sale securities.

Accrued interest receivable excluded from both the fair value and amortized cost basis of the available-for-sale securities was $ 11.1 million and $ 7.5 million as of December 31, 2023 and 2022, respectively, and was recorded in other current assets on its consolidated balance sheets.

As of December 31, 2023 and 2022, no allowance for credit losses was recorded related to an impairment of available-for-sale securities.

The following table summarizes our available-for-sale securities by contractual maturity:

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Total $ 2,949,744 $ 2,950,827

Level 3 liabilities consist of convertible preferred stock warrant liability, contingent forward contract liability and common stock warrant liability, of which the fair value was measured upon issuance and is remeasured at each reporting date.

On November 6, 2023, the Company received 28,352,273 ordinary shares of Aston Martin with an initial fair value of $ 73.2 million.

These equity securities are publicly traded stocks (where shares are denominated in GBP) measured at fair value on a recurring basis and classified within level 1 in the fair value hierarchy.

Such equity securities were remeasured to a fair value of $ 81.5 million as of December 31, 2023 and were recorded in other noncurrent assets in the consolidated balance sheet.

During the year ended December 31, 2023, the Company recognized $ 6.0 million of unrealized gain in change in fair value of equity securities in the consolidated statement of operations and comprehensive loss.

During the year ended December 31, 2023, the Company also recognized $ 2.3 million of unrealized foreign currency gain related to these equity securities in other income (expense), net in the consolidated statement of operations and comprehensive loss.

See Note 20 “Related Party Transactions” for more information.

Level 3 liabilities consist of common stock warrant liability of which the fair value was measured upon issuance and is remeasured at each reporting date.

Level 3 liabilities also consist of residual value guarantee liabilities, of which the fair value measurement is nonrecurring and measured upon delivery of vehicles.

The valuation methodology and underlying assumptions are discussed further in Note 2 “Summary of Significant Accounting Policies”, Note 7 “Contingent Forward Contracts,” Note 8 “Convertible Preferred Stock Warrant Liability” and Note 9 “Common Stock Warrant Liability”.

The valuation methodology and underlying assumptions are discussed further in Note 2 “Summary of Significant Accounting Policies” and Note 10 “Common Stock Warrant Liability”.

Significant increases (decreases) in the unobservable inputs used in determining the fair value would result in a significantly higher (lower) fair value measurement.

The following table presents a reconciliation of the contingent forward contract liability, convertible preferred stock warrant liability and common stock warrant liability measured and recorded at fair value on a recurring basis (in thousands):

The following table presents a reconciliation of the common stock warrant liability measured and recorded at fair value on a recurring basis (in thousands):

Year Ended December 31,

Warrant Liability Contingent Forward

Contract Liability Convertible

Preferred Stock

Warrant Liability Common Stock

Warrant Liability

Fair value-beginning of period $ 140,590 $ 1,394,808

Issuance — 2,167,332 — 812,048

Change in fair value ( 86,926 ) ( 1,254,218 )

Settlement — ( 2,621,878 ) ( 9,936 ) —

Fair value-end of period $ 53,664 $ 140,590

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The Company accounted for the issuance of the 2026 Notes as a single liability measured at its amortized cost, as no other embedded features require bifurcation and recognition as derivatives.

The following is a summary of the 2026 Notes as of December 31, 2022 and 2021 (in millions):

The following table is a summary of the 2026 Notes as of December 31, 2023 and 2022 (in millions):

December 31, 2023 December 31, 2022

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Year Ended December 31,

2023 2022 2021

Contractual interest $ 25.2 $ 25.2 $ 1.2

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No sinking fund is provided for the 2026 Notes, which means that the Company is not required to redeem or retire them periodically.

As of December 31, 2022, the Company was in compliance with applicable covenants under the indenture governing the 2026 Notes.

As of December 31, 2023 and 2022, the Company was in compliance with applicable covenants under the indenture governing the 2026 Notes.

SIDF Loan Agreement

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The SIDF Loan Agreement also defines customary events of default, including abandonment of or failure to commence operations at the plant in the King Abdullah Economic City (“KAEC”), and drawdowns under the SIDF Loan Agreement are subject to certain conditions precedent.

As of December 31, 2022 , no amount was outstanding under the SIDF Loan Agreement.

As of December 31, 2023 and 2022 , no amount was outstanding under the SIDF Loan Agreement.

GIB Facility Agreement

On April 29, 2022, Lucid LLC entered into a revolving credit facility agreement (the “GIB Facility Agreement”) with GIB, maturing on February 28, 2025.

On April 29, 2022, Lucid LLC entered into the GIB Facility Agreement with GIB, maturing on February 28, 2025.

GIB is a related party of PIF, which is an affiliate of Ayar.

The GIB Facility Agreement provides for two committed revolving credit facilities in an aggregate principal amount of SAR 1 billion (approximately $ 266.1 million).

SAR 650 million (approximately $ 173.0 million) under the GIB Facility Agreement is available as bridge financing (the “Bridge Facility”) of Lucid LLC’s capital expenditures in connection with AMP-2.

The remaining SAR 350 million (approximately $ 93.1 million) may be used for general corporate purposes (the “Working Capital Facility”).

Loans under the Bridge Facility and the Working Capital Facility will have a maturity of no more than 12 months.

The Bridge Facility will bear interest at a rate of 1.25 % per annum over 3-month SAIBOR and the Working Capital Facility will bear interest at a rate of 1.70 % per annum over 1~3-month SAIBOR and associated fees.

The GIB Facility Agreement provided for two committed revolving credit facilities in an aggregate principal amount of SAR 1 billion (approximately $ 266.1 million).

SAR 650 million (approximately $ 173.0 million) under the GIB Facility Agreement was available as the Bridge Facility for the financing of Lucid LLC’s capital expenditures in connection with AMP-2.

The remaining SAR 350 million (approximately $ 93.1 million) was available as the Working Capital Facility and might be used for general corporate purposes.

Loans under the Bridge Facility and the Working Capital Facility had a maturity of no more than 12 months.

The Bridge Facility incurred interest at a rate of 1.25 % per annum over 3-month SAIBOR and the Working Capital Facility incurred interest at a rate of 1.70 % per annum over 1~3-month SAIBOR and associated fees.

On March 12, 2023, Lucid LLC entered into the Amended GIB Facility Agreement to combine the Bridge Facility and the Working Capital Facility into a committed SAR 1 billion (approximately $ 266.7 million) GIB Credit Facility which may be used for general corporate purposes.

Loans under the Amended GIB Credit Facility Agreement 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.

The Company is required to pay a quarterly commitment fee of 0.15 % per annum based on the unutilized portion of the GIB Credit Facility.

Commitments under the GIB Facility Agreement will terminate, and all amounts then outstanding thereunder will become payable, on the maturity date of the GIB Facility Agreement.

The GIB Facility Agreement contains certain conditions precedent to drawdowns, representations and warranties and covenants of Lucid LLC and events of default.

As of December 31, 2022 , the Company had outstanding borrowings of SAR 36 million (approximately $ 9.6 million) with interest rate of 6.40 % from the Working Capital Facility, which was recorded within Other current liabilities on the consolidated balance sheets.

As of December 31, 2022, available borrowings are SAR 650 million (approximately $ 173.0 million) and SAR 314 million (approximately $ 83.5 million) under the Bridge Facility and Working Capital Facility, respectively.

As of December 31, 2022, the Company was in compliance with applicable covenants under the GIB Facility Agreement.

Commitments under the Amended GIB Facility Agreement will terminate, and all amounts then outstanding thereunder would become payable, on the maturity date of the Amended GIB Facility Agreement.

The Amended GIB Facility Agreement contains certain conditions precedent to drawdowns, representations and warranties and covenants of Lucid LLC and events of default.

As of December 31, 2023, the Company had outstanding borrowings of SAR 272 million (approximately $ 72.5 million) with weighted average interest rate of 7.49 %.

As of December 31, 2023, availability under the GIB Credit Facility was SAR 727 million (approximately $ 193.9 million), after giving effect to the outstanding letters of credit.

As of December 31, 2022 , the Company had outstanding borrowings of SAR 36 million (approximately $ 9.6 million) with interest rate of 6.40 % from the Working Capital Facility.

As of December 31, 2022, available borrowings were SAR 650 million (approximately $ 173.0 million) and SAR 314 million (approximately $ 83.5 million) under the Bridge Facility and Working Capital Facility, respectively.

The outstanding borrowings were recorded within other current liabilities in the consolidated balance sheets.

The Company recorded interest expenses of SAR 8 million (approximately $ 2.2 million) for the year ended December 31, 2023.

The interest expense recorded for the year ended December 31, 2022 was immaterial .

As of December 31, 2023 and 2022, the Company was in compliance with applicable covenants under the Amended GIB Facility Agreement.

ABL Credit Facility

In June 2022, the Company entered into a new five-year senior secured asset-based revolving credit facility (“ABL Credit Facility”) with a syndicate of banks that may be used for working capital and general corporate purposes.

In June 2022, the Company entered into the ABL Credit Facility with a syndicate of banks that may be used for working capital and general corporate purposes.

The ABL Credit Facility provides for an initial aggregate principal commitment amount of up to $ 1.0 billion (including a $ 350.0 million letter of credit subfacility and a $ 100.0 million swingline loan subfacility) and has a stated maturity date of June 9, 2027.

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The ABL Credit Facility also includes a minimum liquidity covenant which, at the Company’s option following satisfaction of certain pre-conditions, may be replaced with a springing, minimum fixed charge coverage ratio (“FCCR”) financial covenant, in each case on terms set forth in the credit agreement governing the ABL Credit Facility.

As of December 31, 2022, the Company was in compliance with applicable covenants under the ABL Credit Facility.

As of December 31, 2022, the Company had no outstanding borrowings and $ 37.4 million outstanding letters of credit under the ABL Credit Facility.

Availability under the ABL Credit Facility was $ 441.4 million (including $ 37.3 million cash and cash equivalents) as of December 31, 2022, after giving effect to the borrowing base and the outstanding letters of credit.

The Company incurred issuance costs of $ 6.3 million to obtain the ABL Credit Facility, which was capitalized within Other noncurrent assets on consolidated balance sheets and amortized over the facility term using the straight-line method.

During the year ended December 31, 2022, amortization of the deferred issuance costs and commitment fee were $ 2.1 million.

As of December 31, 2023 and 2022, the Company was in compliance with applicable covenants under the ABL Credit Facility.

As of December 31, 2023 and 2022, the Company had no outstanding borrowings under the ABL Credit Facility.

Outstanding letters of credit under the ABL Credit Facility were $ 45.4 million and $ 37.4 million as of December 31, 2023 and 2022, respectively.

Availability under the ABL Credit Facility was $ 413.4 million (including $ 144.0 million cash and cash equivalents) and $ 441.4 million (including $ 37.3 million cash and cash equivalents) as of December 31, 2023 and 2022, respectively, after giving effect to the borrowing base and the outstanding letters of credit.

The Company incurred issuance costs of $ 6.3 million to obtain the ABL Credit Facility, which was capitalized within other noncurrent assets in the consolidated balance sheets and amortized over the facility term using the straight-line method.

The Company recorded amortization of the deferred issuance costs and commitment fee of $ 3.7 million and $ 2.1 million for the years ended December 31, 2023 and 2022, respectively.

NOTE 8 - CONTINGENT FORWARD CONTRACTS

In September 2018, the Company granted PIF the right to purchase the Company’s Series D convertible preferred stock in future periods.

The Company determined PIF’s right to participate in future Series D convertible preferred stock financing to be freestanding similar to a derivative liability in the form of contingent forward contracts.

In March 2020, the Company received $ 200.0 million in exchange for 82,496,092 shares of Series D convertible preferred shares as partial settlement of the Series D contingent forward contract liability and revalued the contingent forward contract liability to the then fair value of $ 36.4 million and reclassified $ 18.2 million of the contingent forward contract liability into Series D convertible preferred stock.

In June 2020, the Company received the remaining $ 200.0 million in exchange for 82,496,121 shares of Series D convertible preferred stock as final settlement of the Series D contingent forward contract liability and revalued the contingent forward contracts liability to the then fair value of $ 39.6 million and reclassified the liability into Series D convertible preferred stock.

The Series D contingent forward contract liability incurred a total fair value loss of $ 8.7 million during the year ended December 31, 2020.

Since the Series D contingent forward contract liability was fully settled in June 2020, there was no related outstanding contingent forward contract liability as of December 31, 2020.

In September 2020, the Company granted Ayar the right to purchase the Company’s Series E convertible preferred stock upon the Company’s satisfaction of certain milestones in November 2020.

The Company determined Ayar’s right to participate in future Series E convertible preferred stock financing to be freestanding similar to a derivative liability in the form of contingent forward contracts and recorded the initial valuation of $ 0.8 million into contingent forward contract liabilities.

In December 2020, Ayar waived the Company’s remaining outstanding obligations, and the Company received $ 400.0 million for the issuance of Series E convertible preferred stock.

Upon settlement, the Company revalued the Series E contingent forward contracts to the then fair value of $ 110.5 million and reclassified the contingent forward contract liability into Series E convertible preferred stock.

The Company recorded a loss of $ 109.7 million related to fair value remeasurements of the Series E contingent forward contracts during the year ended December 31, 2020.

In September 2020, the Company and Ayar entered into a stock purchase agreement for the Company’s Series E convertible preferred stock (the “Series E Preferred Stock Purchase Agreement”).

In February 2021, the Company and Ayar entered into Amendment No.

1 to the original Series E Preferred Stock Purchase Agreement (“Amendment No.

1 to the Series E Preferred Stock Purchase Agreement (“Amendment No.

Under the Amendment No.

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In February 2021, all the outstanding convertible preferred stock warrants were settled in its entirety at an exercise price of $ 1.94 per share for an aggregate purchase price of $ 3.0 million.

Upon final settlement, the Company converted the warrant into $ 12.9 million Series D convertible preferred stock, and recorded $ 7.0 million losses related to fair value remeasurements of the warrants in the consolidated statements of operations and comprehensive loss for the year ended December 31, 2021.

Upon final settlement, the Company converted the warrant into $ 12.9 million Series D convertible preferred stock, and recorded $ 7.0 million losses related to fair value remeasurements of the warrants in the consolidated statement of operations and comprehensive loss for the year ended December 31, 2021.

NOTE 10 - COMMON STOCK WARRANT LIABILITY

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The Private Placement Warrants remained unexercised and were remeasured to fair value of $ 53.7 million as of December 31, 2023.

The Company recognized a gain of $ 1,254.2 million and a loss of $ 582.8 million for the years ended December 31, 2022 and 2021, respectively, in the consolidated statements of operations and comprehensive loss.

The Company recognized gains of $ 86.9 million and $ 1,254.2 million, and a loss of $ 582.8 million for the years ended December 31, 2023, 2022 and 2021, respectively, in the consolidated statements of operations and comprehensive loss.

The 44,350,000 Private Placement Warrants included the 14,783,333 Sponsor Earnback Warrants subject to the contingent forfeiture provisions.

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$ 1.21 $ 3.17

Assumptions used in the Monte-Carlo simulation models and Black-Scholes option pricing model take into account the contract terms as well as the quoted price of the Company’s common stock in an active market.

Assumptions used in the Black-Scholes option pricing model take into account the contract terms as well as the quoted price of the Company’s common stock in an active market.

The volatility is based on the actual market activity of the Company’s peer group as well as the Company’s historical volatility.

1 unchanged sentence

Treasury securities with a maturity equivalent to the warrants’ expected life.

The level 3 fair value inputs used in the Monte-Carlo simulation models and Black-Scholes option pricing models were as follows:

The level 3 fair value inputs used in the Black-Scholes option pricing models were as follows:

December 31, 2023 December 31, 2022

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Convertible Preferred Stock was carried at its issuance price, net of issuance costs.

Third Company Repurchase (Series C - August 2020)

In August 2020, the Company repurchased 9,656,589 shares of Series C convertible preferred stock at a price of $ 1.02 per share for total of $ 9.9 million.

The Company recognized $ 10.5 million in Additional paid-in capital in the consolidated balance sheet as of December 31, 2020 related to the difference in fair value and the $ 20.4 million aggregate carrying value of the Series C stock repurchased.

Fourth Company Repurchase (Series C - December 2020)

In December 2020, the Company repurchased 1,850,800 Series C convertible preferred stock at a price of $ 1.21 per share, aggregating to $ 2.2 million.

The Company recognized $ 2.2 million as additional paid-in capital in the consolidated balance sheet as of December 31, 2020, related to the difference in fair value and the $ 4.5 million aggregate carrying value of the Series C shares repurchased.

Fifth Company Repurchase (Series B - December 2020)

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The Company recognized $ 1.0 million in additional paid-in capital in the consolidated balance sheet as of December 31, 2020, related to the difference in fair value of the consideration payable and the $ 4.0 million aggregate carrying value of the Series B shares repurchased.

As of the date of extinguishment and as of December 31, 2020, the Series B convertible preferred stock subject to repurchase had been mandatorily redeemable within 45 days of the agreement and accordingly had been reclassified to other accrued liabilities on the consolidated balance sheet.

Series D Preferred Stock Issuance

In March 2020, the Company received $ 200.0 million in proceeds from PIF and issued 82,496,092 shares of Series D in exchange.

In June 2020, the Company successfully satisfied certain of the second set of milestones related to further development and enhancement in marketing, product, and administrative activities, and received a waiver from PIF for the remaining milestones.

The Company received the remaining $ 200.0 million proceeds in exchange for the issuance of 82,496,121 shares of Series D convertible preferred stock.

See activities related to the PIF Convertible Notes and Series D convertible preferred stock funding as below (in thousands):

Conversion of Convertible Notes $ 271,985

Series D received in April 2019 200,000

Series D received in October 2019 400,000

Series D received in March 2020 200,000

Contingent forward contract liability reclassified to Series D in March 2020 18,180

Series D received in June 2020 200,000

Contingent forward contract liability reclassified to Series D in June 2020 21,384

Conversion of preferred stock warrant to Series D in February 2021 3,000

Reclassification of preferred stock warrant liability to Series D in February 2021 9,936

Total proceeds of Series D $ 1,324,485

As of the date of extinguishment and as of December 31, 2020, the Series B convertible preferred stock subject to repurchase had been mandatorily redeemable within 45 days of the agreement and accordingly had been reclassified to other current liabilities in the consolidated balance sheet.

Series E Convertible Preferred Stock Issuance

In September 2020, the Company entered into an arrangement with Ayar to issue and sell Series E convertible preferred stock pursuant to a securities purchase agreement (the “SPAE”).

Along with the execution of the SPAE, the Company granted Ayar the right to purchase additional Series E convertible preferred stock upon the Company’s satisfaction of certain milestones in November 2020.

The Company determined Ayar’s right to participate in future Series E convertible preferred stock financing to be freestanding, similar to a derivative liability in the form of contingent forward contracts, and recorded the initial valuation of $ 0.8 million as a contingent forward contract liability.

The contingent forward contract terms were included within the SPAE, which dictated a price of $ 2.99 per share of Series E convertible preferred stock.

The Company needed to satisfy two sets of milestone conditions relating to further development and enhancement in marketing, product, and administrative activities for Ayar to provide funding under the SPAE.

Immediately upon closing of the SPAE, the Company received the full first tranche of $ 500.0 million in funding in exchange for 167,273,525 Series E convertible preferred stock as the requirement for the first milestones were met prior to execution of the purchase agreement.

Subsequently, the Company successfully satisfied certain of the second set of milestones and received a waiver from PIF for the remaining milestones;

and on December 24, 2020, the investor provided $ 400.0 million of funding in exchange for 133,818,821 shares as the final issuance of Series E convertible preferred stock related to the second milestones.

Upon final settlement, the Company re-valued the liability associated with the contingent forward contract to the then fair value of $ 110.5 million from a contingent liability of $ 0.8 million and derecognized the liability as the contract was settled in its entirety.

The Company recognized the increase in fair value of $ 109.7 million in the consolidated statements of operations and reclassified the liability into convertible preferred stock on the Company’s consolidated balance sheets as of December 31, 2020.

In February 2021, the Company and Ayar entered into Amendment No.

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and Citigroup Global Markets Inc., under which the Company could offer and sell shares of its common stock having an aggregate offering price up to $ 600.0 million.

During the year ended December 31, 2022, the Company issued 56,203,334 shares at a weighted average price per share of $ 10.68 and received net proceeds of $ 594.3 million after deducting commissions and other issuance costs of approximately $ 5.7 million.

No shares remain available for sale under the Equity Distribution Agreement.

On November 8, 2022, the Company also entered into the 2022 Subscription Agreement, pursuant to which Ayar agreed to purchase from the Company, up to $ 915.0 million of shares of its common stock in one or more private placements through March 31, 2023.

In December 2022, the Company issued 85,712,679 shares to Ayar pursuant to the Subscription Agreement at a weighted average price per share of $ 10.68 , and received aggregate proceeds of $ 915.0 million.

During the year ended December 31, 2022, the Company issued 85,712,679 shares to Ayar pursuant to the 2022 Subscription Agreement at a weighted average price per share of $ 10.68 , and received aggregate proceeds of $ 915.0 million.

On May 31, 2023, the Company entered into the Underwriting Agreement with the Underwriter, under which the Underwriter agreed to purchase 173,544,948 shares of the Company’s common stock at a price per share of $ 6.83 , for aggregate net proceeds to the Company of $ 1.2 billion.

In June 2023, the Company issued the shares to the Underwriter pursuant to the Underwriting Agreement and received aggregate net proceeds of $ 1.2 billion after deducting issuance costs of $ 1.1 million.

On May 31, 2023, the Company entered into the 2023 Subscription Agreement with Ayar, pursuant to which Ayar agreed to purchase from the Company 265,693,703 shares of the Company’s common stock at a price per share of $ 6.83 in a private placement for aggregate net proceeds to the Company of $ 1.8 billion.

In June 2023, the Company issued the shares to Ayar pursuant to the 2023 Subscription Agreement and received aggregate net proceeds of $ 1.8 billion after deducting issuance costs of $ 2.0 million.

Issuance costs incurred were recorded as a reduction of the gross proceeds received from the equity offerings within additional paid-in capital in the consolidated balance sheets.

Common Stock Warrants

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at $ 24.15 per share.

No common stock was repurchased during the year ended December 31, 2022.

No common stock was repurchased during the years ended December 31, 2023 and 2022.

Common Stock Reserved for Issuance

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The 10,526,235 shares reserved for future issuance under the 2014 Plan were removed and added to the share reserve under the 2021 Plan.

The 2021 Plan provided for the grant of incentive stock options, non-statutory stock options, restricted shares, restricted stock units (“RSU”), share appreciation rights, performance-based awards and cash-based awards to the Company’s employees, directors, and consultants.

The 2021 Plan provided for the grant of incentive stock options, non-statutory stock options, restricted shares, RSU, share appreciation rights, performance-based awards and cash-based awards to the Company’s employees, directors, and consultants.

Lucid 2021 Stock Incentive Plan and ESPP

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Shares of common stock underlying awards that are forfeited or cancelled generally are returned to the pool of shares available for issuance under the 2021 Incentive Plan.

The number of shares of common stock that remain available for issuance under the 2021 Incentive Plan, including the ESPP, was 26,826,282 as of December 31, 2022.

The Company had 18,326,354 shares of common stock available for issuance under the 2021 Incentive Plan, including the ESPP, as of December 31, 2023.

Stock Options

The Company’s outstanding stock options generally expire 10 years from the date of grant and are exercisable when the options vest.

The Company’s outstanding stock options generally expire between 7 years to 10 years from the date of grant and are exercisable when the options vest.

Incentive stock options and non-statutory options generally vest over four years , the majority of which vest at a rate of 25 % on the first anniversary of the grant date, with the remainder vesting ratably each month over the next three years .

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Outstanding Options

Number of Options Weighted Average Exercise Price Weighted-Average Remaining Contractual Term Intrinsic Value (in thousands)

Number of Options Weighted Average Exercise Price Weighted-Average Remaining Contractual Term Intrinsic Value

(in thousands)

Balance as of December 31, 2022

39,011,116 $ 1.19 6.5 $ 224,721

Options granted

4,829,886 7.61

Options exercised

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26,806,933 $ 1.17 5.2 $ 86,227

The weighted-average grant-date fair value for options granted for the year ended December 31, 2023 is $ 3.61 .

Aggregate intrinsic value represents the difference between the exercise price of the options and the fair value of common shares.

The aggregate intrinsic value of options exercised was approximately $ 475.5 million, $ 206.7 million and $ 8.3 million for the years ended December 31, 2022, 2021 and 2020, respectively.

The total fair value of stock options granted during the years ended December 31, 2021 and 2020, was approximately $ 24.0 million and $ 14.8 million, respectively, which is recognized over the respective vesting periods.

The aggregate intrinsic value of options exercised was $ 50.1 million, $ 475.5 million and $ 206.7 million for the years ended December 31, 2023, 2022 and 2021, respectively.

The total fair value of stock options granted during the years ended December 31, 2023 and 2021 was $ 17.4 million and $ 24.0 million, respectively, which is recognized over the respective vesting periods.

No stock options were granted during the year ended December 31, 2022.

The total fair value of stock options vested during the years ended December 31, 2022, 2021 and 2020, was approximately $ 5.5 million, $ 6.2 million and $ 3.9 million, respectively.

The total fair value of stock options vested during the years ended December 31, 2023, 2022 and 2021, was $ 5.4 million, $ 5.5 million and $ 6.2 million, respectively.

The Company estimates the fair value of the options utilizing the Black-Scholes option pricing model, which is dependent upon several variables, including expected option term, expected volatility of the Company’s share price over the expected term, expected risk-free interest rate over the expected option term, and expected dividend yield rate over the expected option term, and actual forfeiture rates.

A summary of the assumptions the Company utilized to record compensation expense for stock options granted during the year ended December 31, 2021 and 2020, was as follows:

Year ended December 31,

Weighted average volatility 48.4 % 59.0 %

A summary of the weighted-average assumptions the Company utilized to record compensation expense for stock options granted during the years ended December 31, 2023 and 2021 was as follows:

2023 December 31,

83.9 % 48.4 %

Expected term (in years) 5.0 6.6

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Expected dividends — % — %

As of December 31, 2022, unrecognized stock-based compensation cost related to outstanding unvested stock options that are expected to vest w as $ 5.9 million, which is expected to be recognized over a weighted-average period of 1.7 years.

As of December 31, 2023, unrecognized stock-based compensation cost related to outstanding unvested stock options that are expected to vest was $ 15.1 million, which i s expected to be recognized over a weighted-average period of 3.2 years.

Restricted Stock Units (“RSUs”)

A summary of RSUs activity for the year ended December 31, 2023 was as follows:

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As of December 31, 2023, unrecognized stock-based compensation cost related to outstanding unvested time-based RSUs that are expected to vest was $ 444.3 million, which is expected to be recognized over a weighted-average period of 2.1 years.

The total fair value of time-based RSUs vested during the years ended December 31, 2022 and 2021 was $ 190.9 million and $ 50.5 million, respectively.

There was no time-based RSU vested for the year ended December 31, 2020.

All performance-based RSUs granted to the CEO are subject to performance and market conditions.

The total fair value of time-based RSUs vested during the years ended December 31, 2023, 2022, and 2021 was $ 121.1 million, $ 190.9 million, and $ 50.5 million, respectively.

In 2021, the Company granted performance-based RSUs to the CEO and they are subject to performance and market conditions.

The performance condition was satisfied upon the closing of the Merger.

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During the year ended December 31, 2022, the market condition was met for the CEO performance-based awards for four of the five tranches and certified by the Board of Directors, representing an aggregate of 13,934,271 performance RSUs.

We recorded stock-based compensation expense of $ 85.4 million for the four tranches during the year ended December 31, 2022, and no such expense was recognized during the year ended December 31, 2021.

As of December 31, 2022, the unamortized expense for the fifth tranche, representing 2,090,140 RSUs, was $ 8.2 million which will be recognized over a period of 0.7 years.

The Company recorded stock-based compensation expense of $ 85.4 million during the year ended December 31, 2022.

The unamortized expense of $ 8.2 million as of December 31, 2022 for the fifth tranche, representing 2,090,140 RSUs, was fully recognized during the year ended December 31, 2023.

There were no performance-based RSUs vested for the years ended December 31, 2023 and 2021.

The total fair value of performance-based RSUs vested during the year ended December 31, 2022 was $ 315.3 million.

There are no performance-based RSUs vested for the years ended December 31, 2021 and 2020.

For the year ended December 31, 2022, the Company withheld approximately 9.4 million shares of common stock by net settlement to meet the related tax withholding requirements related to the CEO time-based and performance-based RSUs, and nil for the years ended December 31, 2021 and 2020.

For the years ended December 31, 2023 and 2022, the Company withheld 1.9 million and 9.4 million shares, respectively, of common stock by net settlement to meet the related tax withholding requirements related to the CEO time-based and performance-based RSUs, and nil for the year ended December 31, 2021.

During the year ended December 31, 2023, the Company granted performance-based RSUs to certain employees.

Performance-based RSUs granted to certain employees are subject to (i) annual corporate performance conditions and individual performance and (ii) a service condition which will be met generally over 3 years.

The number of awards granted represents 100 % of the target goal.

Under the terms of the awards, the recipient may earn between 0 % to 150 % of the original number of grants based on actual achievement of corporate performance goals and individual performance.

Stock-based compensation expense is recognized when the relevant performance condition is considered probable of achievement for the performance-based award.

During the year ended December 31, 2023, the Company recorded stock-based compensation expenses of $ 7.9 million related to these performance-based RSUs.

As of December 31, 2023, the unamortized expense for the performance-based RSUs was $ 13.5 million, which will be recognized over a weighted-average period of 1.3 years contingent upon realization of the corporate performance conditions and individual performance.

Employee Stock Purchase Plan (“ESPP”)

The ESPP authorizes the issuance of shares of common stock pursuant to purchase rights granted to employees.

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If the market value of our common stock on the purchase date is lower than the market value at the beginning of the offering period, the ongoing offering terminates immediately following the purchase of ESPP shares on the purchase date and participants in the terminated offering are automatically enrolled in the new offering resulting in a reset of the offering price and a modification charge to be recognized over the new offering period.

During the year ended December 31, 2022, there were two ESPP resets that resulted in modification charges of $ 19.9 million, which are being recognized until the new offering period ending in November 2024.

The Company issued 2,106,158 shares at a weighted-average price of $ 11.66 for the year ended December 31, 2022.

During the years ended December 31, 2023 and 2022, there were two ESPP resets that resulted in modification charges of $ 23.2 million and $ 19.9 million, respectively, which are being recognized until the new offering period ending in November 2025.

The Company issued 4,748,875 and 2,106,158 shares at a weighted-average price of $ 5.02 and $ 11.66 for the years ended December 31, 2023 and 2022, respectively.

No shares were issued during the year ended December 31, 2021.

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Selling, general and administrative 117,433 230,198 370,717

Restructuring charges

( 1,443 ) — —

Total $ 257,283 $ 423,500 $ 516,757

For the year ended December 31, 2023, stock-based compensation expense capitalized as part of the cost of inventory was $ 43.3 million.

Total stock-based compensation expense for the year ended December 31, 2021 included $ 383.2 million stock-based compensation expense related to the RSUs and $ 123.6 million stock-based compensation expense related to the Series E convertible preferred stock issuance in March 2021 and April 2021.

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The Company has entered into various non-cancellable operating and finance lease agreements for certain of the Company’s offices, manufacturing and warehouse facilities, retail and service locations, equipment and vehicles, worldwide.

The Company has determined if an arrangement is a lease, or contains a lease, including embedded leases, at inception and records the leases in the Company’s financial statements upon later of ASC 842 adoption date of January 1, 2021, or lease commencement, which is the date when the underlying asset is made available for use by the lessor.

The Company has determined if an arrangement is a lease, or contains a lease, including embedded leases, at inception and records the leases in the Company’s financial statements upon lease commencement, which is the date when the underlying asset is made available for use by the lessor.

Lease expense for operating lease payments is recognized on a straight-line basis over the lease term.

Our assessed lease terms may include options to extend or terminate the lease when it is reasonably certain that we will exercise that option.

Our assessed lease terms may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option.

Certain operating leases provide for annual increases to lease payments based on an index or rate.

The Company estimates the annual increase in lease payments based on the index or rate at the lease commencement date, for both the Company’s historical leases and for new leases commencing after January 1, 2021.

The Company estimates the annual increase in lease payments based on the index or rate at the lease commencement date.

Differences between the estimated lease payment and actual payment are expensed as incurred.

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In August 2022, the Company entered into a four-year agreement (“Lease Agreement”) to lease land in Casa Grande, Arizona adjacent to our manufacturing facility.

The Company classified this lease as a finance lease because the Lease Agreement contains a purchase option which the Company is reasonably certain to exercise.

As of December 31, 2022, assets and liabilities associated with the finance lease were $ 79.3 million and $ 81.1 million, respectively.

The Company classifies this lease as a finance lease because the Lease Agreement contains a purchase option which the Company is reasonably certain to exercise.

As of December 31, 2023 and 2022, assets associated with the finance lease were $ 79.3 million.

As of December 31, 2023 and 2022, liabilities associated with the finance lease were $ 80.6 million and $ 81.1 million, respectively.

Contemporaneously with the execution of the Lease Agreement, the Company entered into a sale agreement, pursuant to which the Company sold certain parcels of land for $ 31.7 million to the lessor and leased back these parcels of land under the Lease Agreement.

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therefore, the sale-leaseback transaction is accounted for as a failed sale and leaseback financing obligation.

The Company recorded the sales proceeds received as a financial liability within Other long-term liabilities on our consolidated balance sheets as of December 31, 2022.

The Company recorded $ 31.7 million of sales proceeds received as a financial liability within other long-term liabilities in the consolidated balance sheets as of December 31, 2023 and 2022.

The balances for the operating and finance leases where the Company is the lessee are presented as follows within the Company’s consolidated balance sheets (in thousands):

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Operating leases:

Operating lease right-of-use assets $ 215,160 $ 161,974

Right-of-use assets $ 221,508 $ 215,160

Other current liabilities $ 28,431 $ 11,269

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Total finance lease liabilities $ 85,855 $ 91,922

The components of lease expense are as follows within the Company’s consolidated statements of operations and comprehensive loss (in thousands):

The components of lease expense were as follows within the Company’s consolidated statements of operations and comprehensive loss (in thousands):

Year Ended December 31,

2023 2022 2021

Operating lease expense:

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Total lease expense $ 67,196 $ 53,594 $ 36,983

(1) Excluded short-term leases, which were immaterial.

(1) Excluded short-term leases, which were not material.

Other information related to leases where the Company is the lessee was as follows:

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Finance leases 5.59 % 5.57 %

Supplemental cash flow information related to leases where the Company is the lessee is as follows (in thousands):

Supplemental cash flow information related to leases where the Company is the lessee was as follows (in thousands):

Year Ended December 31,

2023 2022 2021

Cash paid for amounts included in the measurement of lease liabilities:

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On December 30, 2021, lead plaintiffs in the Consolidated Class Action filed a revised amended consolidated complaint (the “Complaint”), which asserts claims under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 on behalf of a putative class of shareholders who purchased stock in CCIV between February 5, 2021 and February 22, 2021.

The Complaint names as defendants Lucid Motors and the Company’s chief executive officer, and generally alleges that, prior to the public announcement of the Merger, defendants purportedly made false or misleading statements regarding the expected start of production for Lucid Air and related matters.

The Complaint seeks certification of the action as a class action as well as compensatory damages, interest thereon, and attorneys’ fees and expenses.

The Company moved to dismiss the Complaint on February 14, 2022 and that motion was granted on January 11, 2023, with Plaintiffs being provided the ability to seek leave to amend.

On January 30, 2023, Plaintiffs filed a Motion for Leave to Amend which is currently set for a hearing on March 7, 2023.

The Company believes that the plaintiffs’ claims are without merit and intends to defend itself vigorously, but the Company cannot ensure that defendants’ efforts to dismiss the Complaint will be successful or that it will avoid liability in these matters.

On December 3, 2021, the Company received a subpoena from the SEC requesting the production of certain documents related to an investigation by the SEC.

Although there is no assurance as to the scope or outcome of this matter, the investigation appears to concern the Merger.

The Company is cooperating fully with the SEC in its review.

The District Court granted defendants’ motion to dismiss on January 11, 2023, with plaintiffs being provided the ability to seek leave to amend.

On June 29, 2023, the District Court denied plaintiff’s motion for leave to amend, dismissed the lawsuit and terminated the case.

On July 28, 2023, plaintiffs appealed the District Court’s decisions to the Ninth Circuit Court of Appeals.

Currently, the parties are litigating the case on appeal.

On December 3, 2021, the Company received a subpoena from the SEC requesting the production of certain documents related to an investigation by the SEC related to the business combination between the Company (f/k/a Churchill Capital Corp IV) and Legacy Lucid and certain projections and statements.

The Company responded and fully cooperated with the SEC in its review.

On April 27, 2023, SEC staff informed the Company that the SEC has concluded this matter and it does not intend to recommend an enforcement action by the SEC against the Company.

In addition, two separate purported shareholders of the Company filed shareholder derivative actions, purportedly on behalf of the Company, against certain of the Company’s officers and directors in California federal court, captioned Sahr Lebbie v.

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22-cv-02094-JD.

The complaints name as defendants Lucid Group, Inc.

and the Company’s chief executive officer and chief financial officer, and generally allege that defendants purportedly made false or misleading statements regarding delivery and revenue projections and related matters.

The complaints in these actions seek certification of the actions as class actions, as well as compensatory damages, interest thereon, and attorneys’ fees and expenses.

The Company believes that the plaintiffs’ claims are without merit and intends to defend itself vigorously, but the Company cannot ensure that defendants’ efforts to dismiss the complaint will be successful or that it will avoid liability in these matters.

The consolidated complaint names as defendants Lucid Group, Inc.

The consolidated complaint seeks certification of the action as a class action, as well as compensatory damages, interest thereon, and attorneys’ fees and expenses.

Defendants filed a Motion to Dismiss on February 23, 2023, which is pending before the court.

Defendants believe that the plaintiffs’ claims are without merit and intends to defend themselves vigorously, but they cannot ensure that their efforts to dismiss the consolidated complaint will be successful or that they will avoid liability in this matter.

In addition, on July 11, 2022, a purported shareholder of the Company filed a shareholder derivative action, purportedly on behalf of the Company, against certain of the Company’s officers and directors in California state court, captioned Floyd Taylor v.

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The complaint seeks compensatory damages, punitive damages, interest, and attorneys’ fees and expenses.

The Company is advancing defendants’ fees and expenses incurred in their defense of the actions.

The Company is advancing defendants’ fees and expenses incurred in their defense of the action.

Moreover, on March 25, 2021, the Illinois Automobile Dealers Association, Chicago Automobile Trade Association, Peoria Metro New Car Dealers Association, Illinois Motorcycle Dealers Association, and 241 individual motor vehicle dealers filed an action against the Office of the Illinois Secretary of State (“SOS”), Jesse White, in his official capacity as the Illinois Secretary of State;

Lucid USA, Inc.

(“Lucid USA”);

and other defendants, in the Circuit Court of Cook County, Illinois, County Department, Chancery Division, Case No.

The suit generally alleges that Illinois law does not permit manufacturers to obtain licenses as motor vehicle dealers.

Plaintiffs seek to prevent Lucid from engaging in the sale of motor vehicles directly to consumers.

The SOS granted Lucid USA a dealer’s license on June 3, 2021.

In December 2022, the Court granted Defendants’ Motion to Dismiss.

Plaintiffs subsequently appealed to the Illinois First District Appellate Court and the parties are currently litigating the case on appeal.

Furthermore, while we have registered and applied for trademarks in an effort to protect our brand and goodwill with customers, competitors or other third parties are, have in the past, and may in the future, oppose our trademark applications or otherwise challenge our use of the trademarks and other brand names in which we have invested.

Such oppositions and challenges can be expensive and may adversely affect our ability to maintain the goodwill gained in connection with a particular trademark.

In addition, we may lose our trademark or are unable to submit specimens of use by the applicable deadline to perfect such trademark rights.

For instance, we are evaluating and responding to a claim in a United States Patent and Trademark Office administrative hearing opposing and requesting cancellation of our trademark application and registration for the use of “Gravity”.

At this time, the Company does not consider any such claims, lawsuits or proceedings that are currently pending, individually or in the aggregate, including the matters referenced above, to be material to the Company’s business or likely to result in a material adverse effect on its future operating results, financial condition or cash flows should such proceedings be resolved unfavorably.

Indemnification

In the ordinary course of business, the Company may provide indemnification of varying scope and terms to customers, vendors, investors, directors, and officers with respect to certain matters, including, but not limited to, losses arising out of our breach of such agreements, services to be provided by the Company, or from intellectual property infringement claims made by third parties.

In the ordinary course of business, the Company may provide indemnification of varying scope and terms to customers, vendors, investors, directors, officers, and certain key employees with respect to certain matters, including, but not limited to, losses arising out of our breach of such agreements, services to be provided by the Company, or from intellectual property infringement claims made by third parties.

These indemnification provisions may survive termination of the underlying agreement and the maximum potential amount of future payments the Company could be required to make under these indemnification provisions may not be subject to maximum loss clauses.

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The Company has never paid a material claim, nor has it been sued in connection with these indemnification arrangements.

The Company has indemnification obligations with respect to letters of credit and surety bond primarily used as security against facility leases and utilities infrastructure in the amount of $ 52.5 million and $ 30.4 million as of December 31, 2022 and 2021, respectively, for which no liabilities are recorded on the consolidated balance sheets.

The Company has indemnification obligations with respect to letters of credit and surety bond primarily used as security against facility leases, utilities infrastructure and other agreements that require securitization.

The indemnification obligations were $ 56.3 million and $ 52.5 million as of December 31, 2023 and 2022, respectively, for which no liabilities are recorded in the consolidated balance sheets.

NOTE 17 - INCOME TAXES

The components of loss before provision for (benefit from) income taxes for the years ended December 31, 2022, 2021 and 2020, are as follows (in thousands):

The components of loss before provision for income taxes for the years ended December 31, 2023, 2022 and 2021, were as follows (in thousands):

Year Ended December 31,

2023 2022 2021

Loss subject to domestic income taxes $ ( 2,825,820 ) $ ( 1,306,245 ) $ ( 2,580,324 )

Income subject to foreign income taxes 2,164 612 68

Loss subject to foreign income taxes

( 1,574 ) 2,164 612

The Company recorded $ 0.4 million and immaterial amount of provision for income taxes for the years ended December 31, 2022 and 2021, respectively, and $( 0.2 ) million of benefit from income taxes for the year ended December 31, 2020.

The Company recorded provision for (benefit from) income taxes in connection with its domestic, state, and foreign subsidiaries for the years ended December 31, 2022, 2021 and 2020, respectively, as follows (in thousands):

$ ( 2,827,394 ) $ ( 1,304,081 ) $ ( 2,579,712 )

The Company recorded provision for income taxes in connection with its domestic, state, and foreign subsidiaries for the years ended December 31, 2023, 2022 and 2021, respectively, as follows (in thousands):

Year Ended December 31,

2023 2022 2021

Federal $ — $ — $ 18

State 24 14 4

Foreign 1,002 365 27

Total current tax expense (benefit) $ 379 $ 49 $ ( 188 )

Total current tax expense

$ 1,026 $ 379 $ 49

Federal $ — $ — $ —

Foreign — — —

Total deferred tax expense (benefit) $ — $ — $ —

Total Provision for (benefit from) income taxes $ 379 $ 49 $ ( 188 )

The reconciliation of taxes at the federal statutory rate to our provision for (benefit from) income taxes for the years ended December 31, 2022, 2021 and 2020 was as follows:

Total deferred tax expense

Total provision for income taxes

$ 1,026 $ 379 $ 49

The reconciliation of taxes at the federal statutory rate to our provision for income taxes for the years ended December 31, 2023, 2022 and 2021 were as follows:

Year Ended December 31,

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Change in valuation allowance ( 19.3 ) ( 42.8 ) ( 10.0 )

Provision for (benefit from) income taxes — % — % — %

The effective tax rate was 0.0 % for the years ended December 31, 2022, 2021 and 2020.

The amount of provision for (benefit from) income taxes differs from the expected benefit due to the impact of the U.S.

valuation allowance.

Provision for income taxes

The amount of provision for income taxes differs from the expected benefit due to the impact of the U.S.

valuation allowance, as well as income taxes associated with foreign operations.

Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes.

Significant components of the Company’s deferred taxes as of December 31, 2022 and 2021, are as follows (in thousands):

Significant components of the Company’s deferred taxes as of December 31, 2023 and 2022, were as follows (in thousands):

Deferred tax assets:

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Lease liability

88,407 84,635

Other 21,815 19,037

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Right-of-use assets ( 74,565 ) ( 70,188 )

Tax accounting method change

Total deferred tax liabilities ( 185,391 ) ( 109,806 )

Deferred tax assets (liabilities), net of valuation allowance $ — $ —

The Company does not provide deferred tax liabilities when it intends to reinvest earnings of its foreign subsidiaries indefinitely.

As of December 31, 2022 and 2021, the Company has no undistributed earnings from its foreign subsidiaries.

The Company does not anticipate foreign earnings would be subject to U.S.

taxation upon repatriation.

However, distributions of unremitted foreign earnings may be subject to foreign withholding taxes.

Accordingly, provisions have not been made on the Company’s basis differences in investments that primarily result from earnings in foreign subsidiaries which are indefinitely reinvested.

If recorded, the deferred tax liability associated with indefinitely reinvested basis differences would be immaterial to the financial statements.

A valuation allowance is recognized if, based on the weight of available evidence, it is more likely than not that some portion or all of the deferred tax asset will not be realized in a particular tax jurisdiction.

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The valuation allowance on our net deferred taxes increased by $ 763.6 million and $ 701.4 million during the years ended December 31, 2023 and 2022, respectively.

The Company had federal, state, and foreign net operating loss carryforwards of approximately $ 3,696.1 million, $ 2,492.0 million, and $ 2.0 million, respectively, as of December 31, 2022, which will begin to expire at various dates beginning in 2023.

The Company also had federal and state tax research and development tax credit carryforwards of approximately $ 117.9 million and $ 91.4 million, respectively.

The Company had federal, state, and foreign net operating loss carryforwards of $ 4,471.1 million, $ 3,980.4 million, and $ 1.7 million, respectively, as of December 31, 2023, which will begin to expire at various dates beginning in 2024.

The Company also had federal and state tax research and development tax credit carryforwards of $ 158.2 million and $ 121.2 million, respectively.

The federal research and development tax credit carryforwards will expire at various dates beginning in 2036, if not utilized.

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Utilization of the carryforwards may be subject to substantial annual limitation due to the ownership change limitations provided by the IRC Section 382 and similar state provisions, resulting in a reduction in the gross deferral tax assets before considering the valuation allowance.

We have completed a formal Section 382 study of our equity transactions through December 31, 2020.

The study determined that we experienced an “ownership change” in 2016, and we will not be able to utilize approximately $ 12.0 million of our gross U.S.

federal NOL and $ 15.0 million of gross U.S.

federal research and development tax credit (or $ 3.0 million in net credit) carryforwards.

The Company files U.S., state, and foreign income tax returns with varying statutes of limitations.

The federal, state, and foreign returns statute of limitations remains open for tax years from 2008 and thereafter.

There are currently no income tax audits underway by U.S., state, or foreign tax authorities.

The Company has completed a formal Section 382 study of our equity transactions through December 31, 2020.

The study determined that the Company experienced an “ownership change” in 2016, and the Company will not be able to utilize $ 12.0 million of our U.S.

federal net operating loss and $ 3.0 million of U.S.

federal research and development tax credit carryforwards.

Uncertain Tax Positions

As of December 31, 2022, 2021 and 2020, the total amount of unrecognized tax benefits was approximately $ 105.2 million, $ 72.3 million, and $ 42.9 million, respectively, of which $ 0.6 million, $ 0.5 million and $ 2.6 million, if recognized for respective periods, would favorably impact the Company's effective tax rate.

The Company does not anticipate a significant change in the total amount of unrecognized tax benefits within the next 12 months.

The following table summarizes the activity related to unrecognized tax benefits for the years ended December 31, 2023, 2022 and 2021 (in thousands):

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Unrecognized benefit—end of period $ 140,767 $ 105,234 $ 72,330

Related to the unrecognized tax benefits above, the Company recognized immaterial interest expense and penalty expense as part of provision for (benefit from) income taxes in the consolidated statements of operations and comprehensive loss.

As of December 31, 2022, the Company has recognized a liability for immaterial interest expense and penalties, which was included within Other long-term liabilities in the consolidated balance sheets.

As of December 31, 2023, 2022 and 2021, the total amount of unrecognized tax benefits was $ 140.8 million, $ 105.2 million, and $ 72.3 million, respectively, of which $ 1.1 million, $ 0.6 million and $ 0.5 million, if recognized for respective periods, would favorably impact the Company's effective tax rate.

The Company does not anticipate a significant change in the total amount of unrecognized tax benefits within the next 12 months.

Related to the unrecognized tax benefits above, the interest expense and penalty expense recognized as part of provision for income taxes in the consolidated statements of operations and comprehensive loss for the years ended December 31, 2023, 2022 and 2021 were not material.

As of December 31, 2023 and 2022, the Company recorded immaterial liability for interest expense and penalties, which was included within other long-term liabilities in the consolidated balance sheets.

The Company files U.S., state, and foreign income tax returns with varying statutes of limitations.

The federal, state, and foreign returns statutes of limitations remains open for all years.

There are currently no income tax audits underway by U.S., state, or foreign tax authorities.

NOTE 18 - NET LOSS PER SHARE

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Net loss $ ( 2,828,420 ) $ ( 1,304,460 ) $ ( 2,579,761 )

Deemed contribution related to repurchase of Series B convertible preferred stock — — 1,000

Deemed contribution related to repurchase of Series C convertible preferred stock — — 12,784

Deemed dividend related to the issuance of Series E convertible preferred stock — — ( 2,167,332 )

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The following outstanding shares of potentially dilutive securities were excluded from the computation of diluted net loss per share attributable to common stockholders because including them would have had an anti-dilutive effect:

Year Ended December 31,

Excluded Securities 2023 2022 2021

Convertible preferred stock (on an as-converted basis) — — 957,159,704

Convertible preferred stock warrants (on an as-converted basis) — — 1,546,799

Private Placement Warrants to purchase common stock 44,350,000 — 44,350,000

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Total 185,235,513 126,145,618 177,417,887

The 2,090,140 and 16,024,411 shares of common stock equivalents subject to RSUs are excluded from the anti-dilutive table above as the underlying shares remain contingently issuable since the market conditions have not been satisfied as of December 31, 2022 and 2021, respectively.

The 6,880,905 , 2,090,140 , and 16,024,411 shares of common stock equivalents subject to RSUs are excluded from the anti-dilutive table above as the underlying shares remain contingently issuable since the market or corporate and individual performance conditions have not been satisfied as of December 31, 2023, 2022 and 2021, respectively.

NOTE 19 - EMPLOYEE BENEFIT PLAN

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Public Investment Fund Internship Agreement

In July 2021, we entered into an agreement with PIF, which is an affiliate of Ayar, to implement a recruitment and talent development program pursuant to which we agreed to evaluate, employ and train participants nominated by PIF during six-month internships, and PIF agreed to reimburse us for expenses related to participant wages, visa fees, medical insurance, airfare and housing incurred by us.

In July 2021, the Company entered into an agreement with PIF, which is an affiliate of Ayar, to implement a recruitment and talent development program pursuant to which the Company agreed to evaluate, employ and train participants nominated by PIF during six-month internships, and PIF agreed to reimburse us for expenses related to participant wages, visa fees, medical insurance, airfare and housing incurred by us.

The program ended during the year ended December 31, 2022.

The expenses incurred under the agreement were $ 1.0 million for the year ended December 31, 2022 and the amount due from PIF was $ 1.0 million as of December 31, 2022.

No expenses were incurred during the year ended December 31, 2021.

Professional Services Contract

In December 2021, we entered into an agreement with The Klein Group, LLC (“Klein”), an affiliate of Churchill Sponsor IV LLC who owns more than 5 % of our common stock.

Pursuant to the agreement, Klein will provide strategic advice and assistance in connection with capital markets and other strategic matters.

The costs incurred under the agreement were $ 1.3 million and $ 2.3 million for the years ended December 31, 2022 and 2021, respectively.

In February 2022, we entered into a lease agreement with KAEC, a related party of PIF, which is an affiliate of Ayar, for our first international manufacturing plant in Saudi Arabia.

The expenses incurred under the agreement were nil , $ 1.0 million, and nil for the years ended December 31, 2023, 2022 and 2021, respectively.

The amount due from PIF was nil and $ 1.0 million as of December 31, 2023 and 2022, respectively.

In February 2022, the Company entered into a lease agreement with KAEC, a related party of PIF, which is an affiliate of Ayar, for its first international manufacturing plant in Saudi Arabia.

The lease has an initial term of 25 years expiring in Year 2047.

As of December 31, 2022, the right-of-use assets and lease liabilities related to this lease were $ 4.8 million and $ 5.4 million, respectively.

The right-of-use asset related to this lease was $ 4.5 million and $ 4.8 million as of December 31, 2023 and 2022, respectively.

The lease liability was $ 5.7 million and $ 5.4 million as of December 31, 2023 and 2022, respectively.

The right-of-use asset and lease liability were recorded in right-of-use assets and other current liabilities in the consolidated balance sheets, respectively.

The lease expense recorded for the years ended December 31, 2023 and 2022 was immaterial.

In July 2023, the Company entered into a lease agreement with King Abdullah Financial District Development and Management Company, a subsidiary of PIF, which is an affiliate of Ayar, for its corporate office in Saudi Arabia.

The lease has an initial term of six years expiring in Year 2029.

The right-of-use asset and lease liability related to this lease were $ 2.3 million as of December 31, 2023.

The right-of-use asset and lease liability were recorded in right-of-use assets and other current liabilities in the consolidated balance sheet, respectively.

The lease expense recorded for the year ended December 31, 2023 was immaterial.

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See Note 7 “Debt” for more information.

Ministry of Investment of Saudi Arabia ( “ MISA”) Agreements

MISA Agreements

In February 2022, Lucid LLC entered into agreements with MISA, a related party of 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.

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Alternatively, Lucid LLC is entitled to avoid the transfer of the ownership of AMP-2 by electing to pay such amortized value.

The agreements will terminate on the fifteenth anniversary of the commencement of completely-built-up (“CBU”) operations at AMP-2 at the latest.

During the year ended December 31, 2022, the Company received support of SAR 366 million (approximately $ 97.3 million) in cash, of which $ 64.0 million was recorded as deferred liability within Other long-term liabilities and $ 33.3 million was recorded as a deduction in calculating the carrying amount of the related assets on the consolidated balance sheet.

There are no unfulfilled conditions and contingencies attached to the payments received.

Payment receipts are classified as investing cash inflows on the consolidated statements of cash flows.

The agreements will terminate on the fifteenth anniversary of the commencement of CBU operations at AMP-2 at the latest.

During the year ended December 31, 2023, the Company received support of SAR 366 million (approximately $ 97.5 million) in cash, of which $ 62.5 million was recorded as deferred liability within other long-term liabilities and $ 35.0 million was recorded as a deduction in calculating the carrying amount of the related assets in the consolidated balance sheet as of December 31, 2023.

During the year ended December 31, 2022, the Company received support of SAR 366 million (approximately $ 97.3 million) in cash, of which $ 64.0 million was recorded as deferred liability within other long-term liabilities and $ 33.3 million was recorded as a deduction in calculating the carrying amount of the related assets in the consolidated balance sheet as of December 31, 2022.

Subsequently, the Company recorded $ 64.0 million as a deduction in calculating the carrying amount of the related assets in the consolidated balance sheet as of December 31, 2023.

There were no unfulfilled conditions and contingencies attached to the payments received.

In 2023 and 2022, payment receipts were classified as investing cash inflows in the consolidated statements of cash flows.

GIB Facility Agreement

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GIB is a related party of PIF, which is an affiliate of Ayar.

The GIB Facility Agreement provides for two committed revolving credit facilities in an aggregate principal amount of SAR 1 billion (approximately $ 266.1 million).

The GIB Facility Agreement provided for two committed revolving credit facilities in an aggregate principal amount of SAR 1 billion (approximately $ 266.1 million).

On March 12, 2023, Lucid LLC entered into an amendment of the GIB Facility Agreement to combine the Bridge Facility and the Working Capital Facility into a committed SAR 1 billion (approximately $ 266.7 million) GIB Credit Facility which may be used for general corporate purposes.

See Note 7 “Debt” for more information.

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Lucid LLC entered into agreements with Al Bawani Company Limited (“Al Bawani”), an affiliate of PIF, which is an affiliate of Ayar, for certain design and construction services in connection with the development of AMP-2.

The capital expenditures incurred under these agreements were SAR 109.5 million (approximately $ 29.1 million) for the year ended December 31, 2022.

Amounts due to Al Bawani under these agreements were SAR 42.1 million (approximately $ 11.2 million) as of December 31, 2022.

Subscription Agreement

On November 8, 2022, the Company entered into the Subscription Agreement with Ayar, pursuant to which Ayar agreed to purchase from the Company, up to $ 915.0 million shares of its common stock in one or more private placements through March 31, 2023.

The capital expenditures incurred under these agreements were SAR 444.6 million (approximately $ 118.6 million) and SAR 109.5 million (approximately $ 29.1 million) as of December 31, 2023 and 2022, respectively.

Amounts due to Al Bawani under these agreements were SAR 74.0 million (approximately $ 19.7 million) and SAR 42.1 million (approximately $ 11.2 million) as of December 31, 2023 and 2022, respectively, and were recorded within other current liabilities in the consolidated balance sheets.

Subscription Agreements

On November 8, 2022, the Company entered into a subscription agreement (the “2022 Subscription Agreement”) with Ayar, pursuant to which Ayar agreed to purchase from the Company, up to $ 915.0 million shares of its common stock in one or more private placements through March 31, 2023.

In December 2022, the Company issued 85,712,679 shares at a weighted average price per share of $ 10.68 , and received aggregate proceeds of $ 915.0 million.

In June 2023, the Company issued the shares to Ayar pursuant to the 2023 Subscription Agreement and received aggregate net proceeds of $ 1.8 billion after deducting issuance costs of $ 2.0 million.

See Note 12 “Stockholders’ Equity” for more information.

Common stock acquired by Ayar under the 2022 Subscription Agreement and 2023 Subscription Agreement is subject to the Investor Rights Agreement dated February 22, 2021 (as amended from time-to-time, the “Investor Rights Agreement”), which governs the registration for resale of such common stock.

Human Resources Development Fund (“HRDF”) Joint Cooperation Agreement

In March 2023, Lucid LLC entered into a joint cooperation agreement with HRDF, a related party of PIF, which is an affiliate of Ayar.

Pursuant to the agreement, Lucid LLC will train and develop local personnel in Saudi Arabia, and HRDF agreed to reimburse the Company training related costs in an aggregate of SAR 29.3 million (approximately $ 7.8 million) during a one-year program.

During the year ended December 31, 2023, the Company received a payment of SAR 8.8 million (approximately $ 2.3 million) in cash.

The Company recorded $ 1.8 million as deferred liability within other current liabilities in the consolidated balance sheet as of December 31, 2023.

The deduction recorded to operating expenses in the consolidated statement of operations and comprehensive loss was immaterial, for the year ended December 31, 2023.

EV Purchase Agreement

In August 2023, Lucid LLC entered into the EV Purchase Agreement with the Government of Saudi Arabia, a related party of PIF, which is an affiliate of Ayar, as represented by the Ministry of Finance.

The EV Purchase Agreement supersedes the letter of undertaking that Lucid LLC entered into in April 2022.

Pursuant to the terms of the EV Purchase Agreement, the Government of Saudi Arabia and its entities and corporate subsidiaries and other beneficiaries (collectively, the “Purchaser”) may purchase up to 100,000 vehicles, with a minimum purchase quantity of 50,000 vehicles and an option to purchase up to an additional 50,000 vehicles during a ten-year period.

Under the EV Purchase Agreement, the Purchaser may reduce the minimum vehicle purchase quantity by the number of vehicles set out in any purchase order not accepted by us or by the number of vehicles that Lucid LLC fails to deliver within six months from the date of the applicable purchase order.

The Purchaser also has absolute discretion to decide whether to exercise the option to purchase the additional 50,000 vehicles.

The Company recognized net vehicle sales amount of $ 43.7 million during the year ended December 31, 2023.

Accounts receivable balance of $ 35.5 million from the Purchaser was recorded within accounts receivable, net in the consolidated balance sheet as of December 31, 2023.

Implementation Agreement with Aston Martin

In June 2023, the Company entered into an agreement (the “Implementation Agreement”) with Aston Martin, a related party of PIF, which is an affiliate of Ayar, under which the Company and Aston Martin have established a long-term strategic technology and supply arrangement.

On November 6, 2023, pursuant to the terms of the Implementation Agreement, integration and supply arrangements became effective, under which the Company will provide Aston Martin access to its powertrain, battery system, and software technologies, work with Aston Martin to integrate its powertrain and battery components with Aston Martin’s battery electric vehicle chassis, and supply powertrain and battery components to Aston Martin (collectively, the “Strategic Technology Arrangement”).

In connection with the commencement of the Strategic Technology Arrangement, the Company received technology access fees in 28,352,273 ordinary shares of Aston Martin (subject to a lock-up provision of 365 days from its issuance) and the first cash installment of $ 33 million.

These shares were initially measured at a fair value of $ 73.2 million and subsequently remeasured to fair value of $ 81.5 million as of December 31, 2023.

The Company will receive the remaining cash payments of $ 99 million phased over a period of three years .

In connection with the Strategic Technology Arrangement, the Company will also receive an aggregate of $ 10 million for integration service fees phased over a period of three years , of which the Company received $ 1.6 million during the year ended December 31, 2023.

The Company accounts for technology access, integration service, and supply arrangement as a single performance obligation and recognizes revenue related to technology access and integration service based on estimated units of delivery under the supply arrangement.

As of December 31, 2023, the Company recorded $ 107.8 million as deferred revenue within other long-term liabilities, in the consolidated balance sheets.

Aston Martin has also committed to an effective minimum spend with the Company on powertrain components of $ 225 million.

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 8. Financial Statements and Supplementary Data