Lucid Group, Inc. 10-Q

lcid-20260630 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (MARK ONE) x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2026 or o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number: 001-39408 Lucid Group, Inc. (Exact name of registrant as specified in its charter) Delaware 85-0891392 (State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification No.) 7373 Gateway Boulevard , Newark , CA 94560 (Address of principal executive offices) (Zip code) ( 510 ) 648-3553 (Registrant’s telephone number, including area code) Securities registered pursuant to Section 12(b) of the Act: Title of each class Trading symbol(s) Name of each exchange on which registered Class A Common Stock, $0.0001 par value per share LCID The Nasdaq Stock Market LLC Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. x Yes o No Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). x Yes o No Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act. Large Accelerated Filer x Accelerated Filer o Non-accelerated Filer o Smaller Reporting Company o Emerging Growth Company o If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act). o Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). o Yes x No Number of shares of the registrant’s common stock outstanding on July 29, 2026: 394,070,176 INDEX TO FORM 10-Q Page PART I. FINANCIAL INFORMATION Cautionary Note Regarding Forward-Looking Statements 3 Frequently Used Terms 4 Item 1. Condensed Consolidated Financial Statements (Unaudited) 6 Condensed Consolidated Balance Sheets as of June 3 0 , 2026 and December 31, 2025 (Unaudited) 6 Condensed Consolidated Statements of Operations and Comprehensive Loss for the Three and Six Months Ended June 3 0 , 2026 and 2025 (Unaudited) 7 Condensed Consolidated Statements of Redeemable Convertible Preferred Stock and Stockholders’ Equity ( D eficit ) for the Three and Six Months Ended June 3 0 , 2026 and 2025 (Unaudited) 8 Condensed Consolidated Statements of Cash Flows for the Six Months Ended Jun e 3 0 , 2026 and 2025 (Unaudited) 10 Notes to Condensed Consolidated Financial Statements (Unaudited) 12 Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations 47 Item 3. Quantitative and Qualitative Disclosures About Market Risk 64 Item 4. Controls and Procedures 65 PART II. OTHER INFORMATION Item 1. Legal Proceedings 66 Item 1A. Risk Factors 66 Item 5. Other Information 118 Item 6. Exhibits 118 SIGNATURES 120 2 CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS This Quarterly Report on Form 10-Q contains statements that express our opinions, expectations, beliefs, plans, objectives, assumptions or projections regarding future events or future results and therefore are, or may be deemed to be, “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Forward-looking statements may be identified by the use of words such as “estimate,” “plan,” “project,” “forecast,” “intend,” “will,” “shall,” “expect,” “anticipate,” “believe,” “seek,” “target,” “continue,” “could,” “may,” “might,” “possible,” “potential,” “predict,” “scheduled,” “aiming,” “targeting,” “objective,” “focus,” “strategic” or other similar expressions that predict or indicate future events or trends or that are not statements of historical matters. They appear in a number of places throughout this Quarterly Report on Form 10-Q and include, but are not limited to, statements regarding our intentions, beliefs or current expectations concerning, among other things, results of operations, financial condition, liquidity, capital expenditures, cash flow improvement plan, expected savings, prospects, growth, production volumes, strategies, management, and the markets in which we operate, including expectations of financial and operational metrics, projections of market opportunity, market share and product sales, expectations and timing related to commercial product launches, future strategies and products, including with respect to battery and powertrain systems, software, and strategic partnerships, technology features and capabilities, manufacturing capabilities and facilities, logistics and supply chain, studio openings, sales channels and strategies, changes to future or existing vehicle programs, expansion and the potential success of our distribution strategy, our financial and operating outlook, future market launches and international expansion, including our manufacturing facility in Saudi Arabia and related timing and value to us, our needs for additional financing, and the promise of Lucid’s technology. Such forward-looking statements are based on currently available market material and our current expectations, beliefs and forecasts concerning future developments. Factors that may impact such forward-looking statements include: • changes in domestic and foreign business, economic, market, financial, political, regulatory and legal conditions, including changes in policies, imposition or proposed imposition of tariffs, export controls, threat of a trade war, the risk of a global economic recession or other downturn, bank closures and liquidity concerns at financial institutions, and global or regional conflicts or other geopolitical events, including the military operations in the Gulf region and the Middle East, and the potential escalation and broadening of the conflict in Iran; • risks related to changes in overall demand for our products and services and cancellation of orders for our vehicles; • risks related to prices and availability of commodities and components, including rare-earth minerals, semiconductors and their related products, and other materials, our supply chain, logistics, inventory management and quality control, and our ability to complete the tooling of our manufacturing facilities over time and scale production of our vehicles; • risks related to the uncertainty of our projected financial and operational information; • risks related to the timing of expected business milestones and commercial product launches; • risks related to the construction and expansion of our manufacturing facilities and the increase of our production capacity; • our ability to manage expenses and control costs, including the execution of the cash flow improvement plan; • risks related to future market adoption of our offerings; • the quality, reliability, and performance of our vehicles and services; • the effects of competition and the pace and depth of EV adoption generally on our business; • changes in regulatory requirements, policies, and governmental incentives; • changes in fuel and energy prices; • our ability to rapidly innovate; • our ability to enter into or maintain partnerships with original equipment manufacturers, vendors and technology providers, including our ability to realize the anticipated benefits of existing strategic partnerships, including those with Aston Martin, Uber Technologies, Inc. (“Uber”), Nuro, Inc. (“Nuro”), and NVIDIA Corporation; • our ability to effectively recruit, integrate, motivate, and retain key employees, including recent changes to our executive team; • risks related to potential vehicle recalls; • our ability to establish and expand our brand, and capture additional market share, and the risks associated with negative press or reputational harm; • risks related to our outstanding Redeemable Convertible Preferred Stock and Convertible Senior Notes; • availability, reduction or elimination of, and our ability to obtain and effectively utilize, Zero Emission Vehicle (“ZEV”) credits, tax incentives, and other governmental and regulatory programs and incentives; • our ability to conduct equity, equity-linked, or debt financing in the future; 3 • our ability to pay interest and principal on our indebtedness; • future changes to vehicle specifications which may impact performance, features, pricing, and other expectations; • the outcome of any potential litigation, government and regulatory proceedings, investigations and inquiries; and • other factors disclosed in this Quarterly Report on Form 10-Q or our other filings with the Securities and Exchange Commission (the “SEC”). The forward-looking statements contained in this Quarterly Report on Form 10-Q are based on our current expectations and beliefs concerning future developments and their potential effects on our business. There can be no assurance that future developments affecting our business will be those that we have anticipated. These forward-looking statements involve a number of risks, uncertainties (some of which are beyond our control) or other assumptions that may cause actual results or performance to be materially different from those expressed or implied by these forward-looking statements. These risks and uncertainties include, but are not limited to, those factors described under the heading “Risk Factors” in Part II, Item 1A. Should one or more of these risks or uncertainties materialize, or should any of the assumptions prove incorrect, actual results may vary in material respects from those projected in these forward-looking statements. There may be additional risks that we currently do not know or that we currently believe are immaterial that could also cause actual results to differ from those contained in the forward-looking statements. In addition, forward-looking statements reflect our expectations, plans or forecasts of future events and views as of the date of this Quarterly Report on Form 10-Q. We do not undertake any obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws. The forward-looking statements should not be relied upon as representing our assessments as of any date subsequent to the date of this Quarterly Report on Form 10-Q. Frequently Used Terms Unless otherwise stated in Item 1. Financial Statements and accompanying footnotes, or the context otherwise requires, references in this Quarterly Report on Form 10-Q to: “2026 Notes” are to the 1.25% Convertible Senior Notes due 2026; “2030 Notes” are to the 5.00% Convertible Senior Notes due 2030; “2031 Notes” are to the 7.00% Convertible Senior Notes due 2031; “AMP-1” are to our Advanced Manufacturing Plant-1 in Casa Grande, Arizona; “AMP-2” are to our planned Advanced Manufacturing Plant-2 in Saudi Arabia, which consists of a semi knocked-down (“SKD”) portion that has been completed and a completely-built-up (“CBU”) portion for which building construction is substantially completed, with remaining work focused on commissioning and fit-out activities. “Ayar” are to Ayar Third Investment Company, an affiliate of the PIF and the controlling stockholder of the Company; “Board” or “Board of Directors” are to the board of directors of Lucid Group Inc., a Delaware corporation; “Certificate of Designations” refers to Series A Certificate of Designations, Series B Certificate of Designations, and Series C Certificate of Designations, together; “Churchill” are to Churchill Capital Corp IV, a Delaware corporation and our predecessor company prior to the consummation of the Transactions, which changed its name to Lucid Group, Inc. following the consummation of the Transactions, and its consolidated subsidiaries; “Churchill IPO” are to the initial public offering by Churchill which closed on August 3, 2020; “Closing” are to the consummation of the Transactions; “Closing Date” are to July 23, 2021, the date on which the Transactions were consummated; “common stock” are to the Class A common stock of Lucid Group, Inc., par value $0.0001 per share; “Convertible Senior Notes” refers to the 2026 Notes, the 2030 Notes, and the 2031 Notes; “EV” are to electric vehicle; 4 “Investor Rights Agreement” are to the Investor Rights Agreement, dated as of February 22, 2021 and as amended from time-to-time, by and among the Company, the Sponsor, Ayar and certain other parties thereto; “Legacy Lucid” are to Atieva, Inc., d/b/a Lucid Motors, an exempted company incorporated with limited liability under the laws of the Cayman Islands, and its consolidated subsidiaries before the Closing Date; “LPM-1” are to our Lucid Powertrain Manufacturing Plant-1 in Casa Grande, Arizona; “Merger” are to the merger of a merger subsidiary of Churchill and Atieva, Inc., with Atieva, Inc. surviving such merger as a wholly owned subsidiary of Churchill; “Merger Agreement” are to that certain Agreement and Plan of Merger, dated as of February 22, 2021, by and among Churchill, Legacy Lucid and Air Merger Sub, Inc., a Delaware corporation and a direct, wholly-owned subsidiary of Churchill, as the same has been or may be amended, modified, supplemented or waived from time-to-time; “PIF” are to the Public Investment Fund, the sovereign wealth fund of Saudi Arabia; “Private Placement Warrants” are to Churchill’s warrants issued to the Sponsor in a private placement simultaneously with the closing of the Churchill IPO; “Redeemable Convertible Preferred Stock” are to the Series A Convertible Preferred Stock, Series B Convertible Preferred Stock, and Series C Convertible Preferred Stock, together; “Reverse Stock Split” are to the one-for-ten (1:10) reverse stock split of our common stock that became effective on August 29, 2025; “Series A Certificate of Designations” refers to the Certificate of Designations of Series A Redeemable Convertible Preferred Stock; “Series A Redeemable Convertible Preferred Stock” are to the Series A Convertible Preferred Stock of Lucid Group, Inc., par value $0.0001 per share; “Series A Subscription Agreement” refers to the subscription agreement entered into on March 24, 2024, by the Company and Ayar to purchase from the Company 100,000 shares of its Series A Convertible Preferred Stock; “Series B Certificate of Designations” refers to the Certificate of Designations of Series B Redeemable Convertible Preferred Stock; “Series B Redeemable Convertible Preferred Stock” are to the Series B Convertible Preferred Stock of Lucid Group, Inc., par value $0.0001 per share; “Series B Subscription Agreement” refers to the subscription agreement entered into on August 4, 2024, by the Company and Ayar to purchase from the Company 75,000 shares of its Series B Convertible Preferred Stock; “Series C Certificate of Designations” refers to the Certificate of Designations of Series C Redeemable Convertible Preferred Stock; “Series C Redeemable Convertible Preferred Stock” are to the Series C Convertible Preferred Stock of Lucid Group, Inc., par value $0.0001 per share; “Series C Subscription Agreement” refers to the subscription agreement entered into on April 14, 2026, by the Company and Ayar to purchase from the Company 55,000 shares of its Series C Convertible Preferred Stock; “Sponsor” are to Churchill Sponsor IV LLC, a Delaware limited liability company and an affiliate of M. Klein and Company; “Transactions” are to the Merger, together with the other transactions consummated under the Merger Agreement and the related agreements; and “Warrant Agreement” are to the Warrant Agreement, dated July 29, 2020, entered into in connection with the Churchill IPO by and between Continental Stock Transfer & Trust Company and Churchill. Unless the context otherwise requires, all references in this section to “Lucid,” the “Company,” “we,” “us,” “our,” and other similar terms refer to Legacy Lucid and its subsidiaries prior to the Closing, and Lucid Group, Inc., a Delaware corporation, and its subsidiaries after the Closing. 5 PART I – FINANCIAL INFORMATION Item 1. Financial Statements. LUCID GROUP, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (in thousands, except share and per share data) June 30, 2026 December 31, 2025 ASSETS Current assets: Cash and cash equivalents $ 732,601 $ 997,827 Short-term investments (including nil and $ 50,000 associated with a related party as of June 30, 2026 and December 31, 2025, respectively) 28,712 631,093 Accounts receivable, net (including $ 186,581 and $ 120,540 from a related party as of June 30, 2026 and December 31, 2025, respectively) 223,050 177,162 Inventory 1,378,653 1,109,529 Prepaid expenses 72,458 59,606 Other current assets 341,067 324,434 Total current assets 2,776,541 3,299,651 Property, plant and equipment, net 4,222,841 3,978,132 Right-of-use assets 249,019 241,974 Long-term investments (including $ 14,191 and $ 24,259 associated with a related party as of June 30, 2026 and December 31, 2025, respectively) 14,191 512,241 Other noncurrent assets 436,234 354,983 TOTAL ASSETS $ 7,698,826 $ 8,386,981 LIABILITIES Current liabilities: Accounts payable $ 366,907 $ 487,521 Finance lease liabilities, current portion 5,045 84,222 Current portion of debt ($ 503,088 and $ 467,963 associated with a related party as of June 30, 2026 and December 31, 2025, respectively) 707,142 671,746 Other current liabilities (including $ 73,134 and $ 81,580 associated with a related party as of June 30, 2026 and December 31, 2025, respectively) 1,359,101 1,392,641 Total current liabilities 2,438,195 2,636,130 Finance lease liabilities, net of current portion 102,685 104,559 Debt, net of current portion (including $ 497,426 and nil associated with a related party as of June 30, 2026 and December 31, 2025, respectively) 2,546,556 2,046,576 Other long-term liabilities (including $ 123,504 and $ 123,198 associated with related parties as of June 30, 2026 and December 31, 2025, respectively) 599,441 582,739 Derivative liabilities associated with redeemable convertible preferred stock (related party) 163,655 16,200 Total liabilities 5,850,532 5,386,204 Commitments and contingencies (Note 11 ) REDEEMABLE CONVERTIBLE PREFERRED STOCK Preferred stock 10,000,000 shares authorized as of June 30, 2026 and December 31, 2025, Series A redeemable convertible preferred stock, par value $ 0.0001 ; 100,000 shares issued and outstanding as of June 30, 2026 and December 31, 2025; liquidation preference of $ 1,470,165 and $ 1,350,441 as of June 30, 2026 and December 31, 2025, respectively (related party) 1,469,464 1,339,641 Preferred stock 10,000,000 shares authorized as of June 30, 2026 and December 31, 2025, Series B redeemable convertible preferred stock, par value $ 0.0001 ; 75,000 shares issued and outstanding as of June 30, 2026 and December 31, 2025; liquidation preference of $ 1,032,889 and $ 949,249 as of June 30, 2026 and December 31, 2025, respectively (related party) 1,032,514 943,849 Preferred stock 10,000,000 shares authorized as of June 30, 2026 and December 31, 2025, Series C redeemable convertible preferred stock, par value $ 0.0001 ; 55,000 and 0 shares issued and outstanding as of June 30, 2026 and December 31, 2025; liquidation preference of $ 566,859 and nil as of June 30, 2026 and December 31, 2025, respectively (related party) 404,279 — Total redeemable convertible preferred stock 2,906,257 2,283,490 STOCKHOLDERS’ EQUITY (DEFICIT) Common stock, par value $ 0.0001 ; 1,500,000,000 shares authorized as of June 30, 2026 and December 31, 2025; 394,155,958 and 327,451,844 shares issued and 394,070,176 and 327,366,062 shares outstanding as of June 30, 2026 and December 31, 2025, respectively 39 33 Additional paid-in capital 16,636,039 16,337,023 Treasury stock, at cost, 85,782 shares at June 30, 2026 and December 31, 2025 ( 20,716 ) ( 20,716 ) Accumulated other comprehensive income 615 11,692 Accumulated deficit ( 17,673,940 ) ( 15,610,745 ) Total stockholders’ equity (deficit) ( 1,057,963 ) 717,287 TOTAL LIABILITIES, REDEEMABLE CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS’ EQUITY (DEFICIT) $ 7,698,826 $ 8,386,981 The accompanying notes are an integral part of these condensed consolidated financial statements. 6 LUCID GROUP, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS (Unaudited) (in thousands, except share and per share data) Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 Revenue (including $ 96,188 and $ 30,247 from a related party for the three months ended June 30, 2026 and 2025, and $ 134,558 and $ 35,343 for the six months ended June 30, 2026 and 2025, respectively) $ 405,347 $ 259,432 $ 687,812 $ 494,480 Costs and expenses Cost of revenue 832,072 531,783 1,426,242 995,343 Research and development 321,336 273,839 657,006 525,085 Selling, general and administrative 300,432 256,857 604,608 469,032 Workforce reduction charges 33,675 — 71,609 — Total cost and expenses 1,487,515 1,062,479 2,759,465 1,989,460 Loss from operations ( 1,082,168 ) ( 803,047 ) ( 2,071,653 ) ( 1,494,980 ) Other income (expense), net Change in fair value of common stock warrant liability — 5,322 — 18,183 Change in fair value of equity securities of a related party 549 3,948 ( 9,672 ) ( 9,505 ) Change in fair value of derivative liabilities and subscription agreements associated with redeemable convertible preferred stock (related party) 102,790 111,475 110,165 393,175 Gain on extinguishment of debt — 116,360 — 116,360 Interest income 9,634 44,318 22,738 96,527 Interest expense (including $ 23,363 and $ 4,912 to a related party for the three months ended June 30, 2026 and 2025, and $ 34,672 and $ 8,612 for the six months ended June 30, 2026 and 2025, respectively) ( 47,817 ) ( 23,749 ) ( 88,890 ) ( 35,632 ) Other income (expense), net ( 16,789 ) 3,572 ( 24,656 ) 6,537 Total other income, net 48,367 261,246 9,685 585,645 Loss before provision for (benefit from) income taxes ( 1,033,801 ) ( 541,801 ) ( 2,061,968 ) ( 909,335 ) Provision for (benefit from) income taxes 1,050 ( 2,369 ) 1,227 ( 3,732 ) Net loss ( 1,034,851 ) ( 539,432 ) ( 2,063,195 ) ( 905,603 ) Accretion of redeemable convertible preferred stock (related party) ( 224,425 ) ( 199,823 ) ( 330,387 ) ( 564,748 ) Net loss attributable to common stockholders, basic ( 1,259,276 ) ( 739,255 ) ( 2,393,582 ) ( 1,470,351 ) Interest expense on 2026 Notes — 309 — 4,283 Gain on extinguishment of debt — ( 116,360 ) — ( 116,360 ) Net loss attributable to common stockholders, diluted $ ( 1,259,276 ) $ ( 855,306 ) $ ( 2,393,582 ) $ ( 1,582,428 ) Weighted-average shares outstanding attributable to common stockholders (1) Basic 382,098,609 305,640,483 $ 355,340,787 $ 304,641,184 Diluted 382,098,609 305,788,272 $ 355,340,787 $ 305,670,808 Net loss per share attributable to common stockholders (1) Basic $ ( 3.30 ) $ ( 2.42 ) $ ( 6.74 ) $ ( 4.83 ) Diluted $ ( 3.30 ) $ ( 2.80 ) $ ( 6.74 ) $ ( 5.18 ) Other comprehensive income (loss) Net unrealized gains (losses) on investments, net of tax $ ( 152 ) $ 293 $ ( 1,537 ) $ 3,845 Reclassification adjustment for realized gains on investments included in net loss — — ( 5,702 ) — Foreign currency translation adjustments ( 2,746 ) 8,973 ( 3,838 ) 12,870 Total other comprehensive income (loss) ( 2,898 ) 9,266 ( 11,077 ) 16,715 Comprehensive loss ( 1,037,749 ) ( 530,166 ) ( 2,074,272 ) ( 888,888 ) Accretion of redeemable convertible preferred stock (related party) ( 224,425 ) ( 199,823 ) ( 330,387 ) ( 564,748 ) Comprehensive loss attributable to common stockholders $ ( 1,262,174 ) $ ( 729,989 ) $ ( 2,404,659 ) $ ( 1,453,636 ) (1) The weighted-average shares outstanding attributable to common stockholders and net loss per share attributable to common stockholders have been adjusted for the prior periods presented to reflect the one-for-ten (1:10) reverse stock split effected on August 29, 2025. See Note 2 “Summary of Significant Accounting Policies” for more information. The accompanying notes are an integral part of these condensed consolidated financial statements. 7 LUCID GROUP, INC. CONDENSED CONSOLIDATED STATEMENTS OF REDEEMABLE CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS’ EQUITY (DEFICIT) (Unaudited) (in thousands, except share data) Redeemable Convertible Preferred Stock Common Stock Additional Paid-In Capital Treasury Stock Accumulated Other Comprehensive Income Accumulated Deficit Total Stockholders’ Equity (Deficit) Three Months Ended June 30, 2026 Shares Amount Shares Amount Balance as of March 31, 2026 175,000 $ 2,389,452 330,144,583 $ 33 $ 16,304,893 $ ( 20,716 ) $ 3,513 $ ( 16,639,089 ) $ ( 351,366 ) Net loss — — — — — — — ( 1,034,851 ) ( 1,034,851 ) Other comprehensive loss — — — — — — ( 2,898 ) — ( 2,898 ) Tax withholding payments for net settlement of employee awards — — — — ( 206 ) — — — ( 206 ) Issuance of common stock upon vesting of employee RSUs — — 2,058,113 — — — — — — Issuance of common stock under employee stock purchase plan — — 1,768,507 — 9,833 — — — 9,833 Issuance of common stock upon exercise of stock options — — 2,819 — 17 — — — 17 Issuance of common stock under 2026 Underwriting Agreement, net of issuance costs — — 36,057,692 4 291,530 — — — 291,534 Issuance of common stock under 2026 Subscription Agreement, net of issuance costs (related party) — — 24,038,462 2 199,842 — — — 199,844 Issuance of Series C redeemable convertible preferred stock, net of derivative liability (related party) 55,000 292,380 — — — — — — — Accretion of redeemable convertible preferred stock (related party) — 224,425 — — ( 224,425 ) — — — ( 224,425 ) Stock-based compensation — — — — 54,555 — — — 54,555 Balance as of June 30, 2026 230,000 $ 2,906,257 394,070,176 $ 39 $ 16,636,039 $ ( 20,716 ) $ 615 $ ( 17,673,940 ) $ ( 1,057,963 ) Redeemable Convertible Preferred Stock Common Stock (1) Additional Paid-In Capital Treasury Stock Accumulated Other Comprehensive Income Accumulated Deficit Total Stockholders’ Equity Three Months Ended June 30, 2025 Shares Amount Shares Amount Balance as of March 31, 2025 175,000 $ 1,664,767 304,880,073 $ 31 $ 16,477,875 $ ( 20,716 ) $ 5,350 $ ( 13,278,865 ) $ 3,183,675 Net loss — — — — — — — ( 539,432 ) ( 539,432 ) Other comprehensive income — — — — — — 9,266 — 9,266 Tax withholding payments for net settlement of employee awards — — — — ( 6,172 ) — — — ( 6,172 ) Issuance of common stock upon vesting of employee RSUs — — 1,464,206 — — — — — — Issuance of common stock under employee stock purchase plan — — 685,401 — 12,696 — — — 12,696 Issuance of common stock upon exercise of stock options — — 204,879 — 861 — — — 861 Purchase of capped call options — — — — ( 118,250 ) — — — ( 118,250 ) Accretion of redeemable convertible preferred stock (related party) — 199,823 — — ( 199,823 ) — — — ( 199,823 ) Stock-based compensation — — — — 64,770 — — — 64,770 Balance as of June 30, 2025 175,000 $ 1,864,590 307,234,559 $ 31 $ 16,231,957 $ ( 20,716 ) $ 14,616 $ ( 13,818,297 ) $ 2,407,591 (1) The number of shares of common stock has been adjusted for the prior periods presented to reflect the one-for-ten (1:10) reverse stock split effected on August 29, 2025. See Note 2 “Summary of Significant Accounting Policies” for more information. The accompanying notes are an integral part of these condensed consolidated financial statements. 8 LUCID GROUP, INC. CONDENSED CONSOLIDATED STATEMENTS OF REDEEMABLE CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS’ EQUITY (DEFICIT) - continued (Unaudited) (in thousands, except share data) Redeemable Convertible Preferred Stock Common Stock Additional Paid-In Capital Treasury Stock Accumulated Other Comprehensive Income Accumulated Deficit Total Stockholders’ Equity (Deficit) Six Months Ended June 30, 2026 Shares Amount Shares Amount Balance as of January 1, 2026 175,000 $ 2,283,490 327,366,062 $ 33 $ 16,337,023 $ ( 20,716 ) $ 11,692 $ ( 15,610,745 ) $ 717,287 Net loss — — — — — — — ( 2,063,195 ) ( 2,063,195 ) Other comprehensive loss — — — — — — ( 11,077 ) — ( 11,077 ) Tax withholding payments for net settlement of employee awards — — — — ( 1,311 ) — — — ( 1,311 ) Issuance of common stock upon vesting of employee RSUs — — 4,528,062 — — — — — — Issuance of common stock under employee stock purchase plan — — 1,768,507 — 9,833 — — — 9,833 Issuance of common stock upon exercise of stock options — — 311,391 — 2,785 — — — 2,785 Issuance of common stock under 2026 Underwriting Agreement, net of issuance costs — — 36,057,692 4 291,530 — — — 291,534 Issuance of common stock under 2026 Subscription Agreement, net of issuance costs (related party) — — 24,038,462 2 199,842 — — — 199,844 Issuance of Series C redeemable convertible preferred stock, net of derivative liability (related party) 55,000 292,380 — — — — — — — Accretion of redeemable convertible preferred stock (related party) — 330,387 — — ( 330,387 ) — — — ( 330,387 ) Stock-based compensation — — — — 126,724 — — — 126,724 Balance as of June 30, 2026 230,000 $ 2,906,257 394,070,176 $ 39 $ 16,636,039 $ ( 20,716 ) $ 615 $ ( 17,673,940 ) $ ( 1,057,963 ) Redeemable Convertible Preferred Stock Common Stock (1) Additional Paid-In Capital Treasury Stock Accumulated Other Comprehensive Income (Loss) Accumulated Deficit Total Stockholders’ Equity Six Months Ended June 30, 2025 Shares Amount Shares Amount Balance as of January 1, 2025 175,000 $ 1,299,842 303,136,190 $ 30 $ 16,808,291 $ ( 20,716 ) $ ( 2,099 ) $ ( 12,912,694 ) $ 3,872,812 Net loss — — — — — — — ( 905,603 ) ( 905,603 ) Other comprehensive income — — — — — — 16,715 — 16,715 Tax withholding payments for net settlement of employee awards — — — — ( 9,449 ) — — — ( 9,449 ) Issuance of common stock upon vesting of employee RSUs — — 3,173,276 1 ( 1 ) — — — — Issuance of common stock under employee stock purchase plan — — 685,401 — 12,696 — — — 12,696 Issuance of common stock upon exercise of stock options — — 239,692 — 1,274 — — — 1,274 Purchase of capped call options — — — — ( 118,250 ) — — — ( 118,250 ) Accretion of redeemable convertible preferred stock (related party) — 564,748 — — ( 564,748 ) — — — ( 564,748 ) Stock-based compensation — — — — 102,144 — — — 102,144 Balance as of June 30, 2025 175,000 $ 1,864,590 307,234,559 $ 31 $ 16,231,957 $ ( 20,716 ) $ 14,616 $ ( 13,818,297 ) $ 2,407,591 (1) The number of shares of common stock has been adjusted for the prior periods presented to reflect the one-for-ten (1:10) reverse stock split effected on August 29, 2025. See Note 2 “Summary of Significant Accounting Policies” for more information. The accompanying notes are an integral part of these condensed consolidated financial statements. 9 LUCID GROUP, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (in thousands) Six Months Ended June 30, 2026 2025 Cash flows from operating activities: Net loss $ ( 2,063,195 ) $ ( 905,603 ) Adjustments to reconcile net loss to net cash used in operating activities: Depreciation and amortization 238,634 209,047 Amortization of insurance premium 19,287 17,485 Non-cash operating lease cost 33,197 19,758 Stock-based compensation 107,639 83,834 Inventory and firm purchase commitments write-downs 527,588 327,806 Change in fair value of common stock warrant liability — ( 18,183 ) Change in fair value of equity securities of a related party 9,672 9,505 Change in fair value of derivative liabilities and subscription agreements associated with redeemable convertible preferred stock (related party) ( 110,165 ) ( 393,175 ) Net accretion of investment discounts/premiums ( 1,090 ) ( 19,062 ) Gain on extinguishment of debt — ( 116,360 ) Other non-cash items 2,140 9,300 Changes in operating assets and liabilities: Accounts receivable (including $( 66,041 ) and $( 5,599 ) from a related party for the six months ended June 30, 2026 and 2025, respectively) ( 48,269 ) ( 13,260 ) Inventory ( 845,554 ) ( 586,043 ) Prepaid expenses ( 30,672 ) ( 27,677 ) Other assets ( 82,290 ) ( 55,824 ) Accounts payable ( 138,365 ) 58,513 Other liabilities ( 26,447 ) 141,085 Net cash used in operating activities ( 2,407,890 ) ( 1,258,854 ) Cash flows from investing activities: Purchases of property, plant and equipment (including $( 117,355 ) and $( 67,668 ) from a related party for the six months ended June 30, 2026 and 2025, respectively) ( 506,994 ) ( 343,904 ) Proceeds from maturities of investments (including $ 50,000 and nil from a related party for the six months ended June 30, 2026 and 2025, respectively) 177,228 1,961,485 Proceeds from sale of investments 951,125 — Purchases of investments (including nil and $( 30,000 ) from a related party for the six months ended June 30, 2026 and 2025, respectively) ( 28,512 ) ( 309,557 ) Net cash provided by investing activities 592,847 1,308,024 Cash flows from financing activities: Proceeds from issuance of common stock under 2026 Underwriting Agreement 292,500 — Payments of issuance costs for the 2026 Underwriting Agreement ( 579 ) — Proceeds from issuance of common stock under 2026 Subscription Agreement to a related party 200,000 — Proceeds from issuance of Series C redeemable convertible preferred stock to a related party 550,000 — Payments of issuance costs for Series C redeemable convertible preferred stock ( 750 ) — Payments of transaction costs for the issuance of 2031 Notes ( 1,165 ) — Proceeds from issuance of 2030 Notes — 1,100,000 Payments of transaction costs for the issuance of 2030 Notes — ( 17,924 ) Purchase of capped calls — ( 118,250 ) Repurchase of 2026 Notes — ( 931,433 ) Proceeds from borrowings from related parties 535,994 106,645 Proceeds from exercise of stock options 2,785 1,274 Proceeds from employee stock purchase plan 9,833 12,696 Tax withholding payments for net settlement of employee awards ( 1,311 ) ( 9,449 ) Payment for finance lease liabilities ( 2,461 ) ( 1,376 ) Payments for credit facility issuance costs to related parties ( 3,750 ) ( 507 ) Net cash provided by financing activities 1,581,096 141,676 Net increase (decrease) in cash, cash equivalents, and restricted cash ( 233,947 ) 190,846 Beginning cash, cash equivalents, and restricted cash 1,040,913 1,607,052 Ending cash, cash equivalents, and restricted cash $ 806,966 $ 1,797,898 The accompanying notes are an integral part of these condensed consolidated financial statements. 10 LUCID GROUP, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - continued (Unaudited) (in thousands) Six Months Ended June 30, 2026 2025 Supplemental disclosure of cash flow information: Cash paid for interest, net of amounts capitalized $ 68,948 $ 16,387 Cash paid for taxes $ 2,585 $ 3,405 Supplemental disclosure of non-cash investing and financing activity: Increases in purchases of property, plant and equipment included in accounts payable and other current liabilities $ 66,400 $ 12,399 Property, plant and equipment and right-of-use assets obtained through leases $ 41,290 $ 143,403 Decrease in property, plant, and equipment related to finance lease asset remeasurements $ ( 79,262 ) $ — The accompanying notes are an integral part of these condensed consolidated financial statements. 11 LUCID GROUP, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) June 30, 2026 NOTE 1 – DESCRIPTION OF BUSINESS Overview Lucid Group, Inc. (“Lucid”) is a technology company that is setting new standards with the world’s most advanced electric vehicles (“EVs”), the award-winning Lucid Air and Lucid Gravity. Throughout the notes to the condensed consolidated financial statements, unless otherwise noted, the “Company,” “we,” “us” or “our” and similar terms refer to Lucid and its subsidiaries. Liquidity The Company devotes its efforts to business planning, sale and servicing of vehicles, providing technology access, research and development, construction of manufacturing facilities, expansion of retail studios and service centers, recruitment of management and technical talent, acquisition of operating assets, and capital-raising activities. From inception through June 30, 2026, the Company has incurred operating losses and negative cash flows from operating activities. For the six months ended June 30, 2026 and 2025, the Company has incurred net losses of $ 2,063.2 million and $ 905.6 million, respectively. The Company had an accumulated deficit of $ 17.7 billion as of June 30, 2026. 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 also completed key manufacturing activities, including the paint shop, stamping, a new body shop for the Lucid Gravity, and a majority of the powertrain shop, of the AMP-1 phase 2 manufacturing facility in 2024. 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 began commercial production and deliveries of its second vehicle, the Lucid Gravity, in December 2024. Currently, the AMP-1 phase 2 facility manufactures the Lucid Air and the Lucid Gravity. The Company continues to expand AMP-1, construct the completely-built-up (“CBU”) portion of AMP-2 for which building construction is substantially completed, with remaining work focused on commissioning and fit-out activities, 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, including its upcoming Midsize platform. The aforementioned activities will require considerable capital, which is above and beyond the expected cash inflows from the current sales of Lucid vehicles. 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, and unused available credit amounts from credit facilities. The Company funded operations primarily with issuances of common stock, convertible preferred stock, convertible notes, and loans. 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 with Gulf International Bank (“GIB”) in an aggregate principal amount of approximately $ 266.1 million (as amended to increase the aggregate principal to $ 505.7 million in February 2025, the “2025 GIB Credit Facility”). See Note 6 “Debt” for more information. In March 2024, the Company entered into a subscription agreement (the “Series A Subscription Agreement”) with Ayar Third Investment Company, the controlling stockholder of the Company (“Ayar”). Pursuant to the Series A Subscription Agreement, Ayar purchased from the Company 100,000 shares of its Series A convertible preferred stock, par value $ 0.0001 per share (the “Series A Redeemable Convertible Preferred Stock”), for an aggregate purchase price of $ 1.0 billion in a private placement. The Company received aggregate net proceeds of $ 997.6 million. In August 2024, the Company entered into a subscription agreement (the “Series B Subscription Agreement”) with Ayar. Pursuant to the Series B Subscription Agreement, Ayar purchased from the Company 75,000 shares of its Series B convertible preferred stock, par value $ 0.0001 per share (the “Series B Redeemable Convertible Preferred Stock”), for an aggregate purchase price of $ 750.0 million in a private placement. The Company received aggregate net proceeds of $ 749.4 million. In April 2026, the Company entered into a subscription agreement (the “Series C Subscription Agreement”) with Ayar. Pursuant to the Series C Subscription Agreement, Ayar purchased from the Company 55,000 shares of its Series C convertible preferred stock, par value $ 0.0001 per share (the “Series C Redeemable Convertible Preferred Stock”), for an aggregate purchase price of $ 550.0 million in a private placement. The Company received aggregate net proceeds of $ 548.9 million. See Note 7 “Redeemable Convertible Preferred Stock” and Note 15 “Related Party Transactions” for more information. 12 The Series A Redeemable Convertible Preferred Stock, the Series B Redeemable Convertible Preferred Stock, and the Series C Redeemable Convertible Preferred Stock (collectively, the “Redeemable Convertible Preferred Stock”) are convertible at the option of the holder (i) at any time the closing price per share of the common stock on the trading date immediately preceding the date on which the holder delivers the relevant notice of conversion is at least a certain price threshold as noted in the certificate of designations of Series A Redeemable Convertible Preferred Stock (the “Series A Certificate of Designations”), in the certificate of designations of the Series B Redeemable Convertible Preferred Stock (the “Series B Certificate of Designations”), and in the certificate of designations of the Series C Redeemable Convertible Preferred Stock (the “Series C Certificate of Designations”) of the Company or (ii) during specified periods preceding a fundamental change or optional redemption by the Company under the terms of the Redeemable Convertible Preferred Stock. See Note 7 “Redeemable Convertible Preferred Stock” for more information. In August 2024, the Company entered into a $ 750.0 million five-year unsecured delayed draw term loan credit facility (the “DDTL Credit Facility”) with Ayar. In November 2025, the Company and Ayar agreed to increase the aggregate principal amount from $ 750.0 million to $ 1.98 billion. In April 2026, the Company borrowed $ 500.0 million under the DDTL Credit Facility. In April 2026, the Company also entered into an Amendment No.2 to Credit Agreement (the “DDTL Amendment”), pursuant to which the aggregate undrawn delayed commitments under the DDTL Credit Facility were increased by $ 500.0 million, such that, after giving effect to such increase, the aggregate sum of outstanding delayed draw term loans and aggregate undrawn commitments was increased to approximately $ 2.48 billion. In July 2026, the Company borrowed an additional $ 800.0 million under the DDTL Credit Facility. After giving effect to this borrowing, approximately $ 1.18 billion remains undrawn under the DDTL Credit Facility. See Note 6 “Debt” and Note 17 “Subsequent Events” for more information. In October 2024, the Company entered into an underwriting agreement (the “2024 Underwriting Agreement”) with BofA Securities, Inc. (the “Underwriter”), under which the Underwriter agreed to purchase from the Company shares of common stock in a public offering. The Company also granted the Underwriter a 30-day option to purchase additional shares of its common stock (the “Overallotment Option”), which the Underwriter exercised to purchase additional shares. In October 2024, the Company also entered into a subscription agreement (the “2024 Subscription Agreement”) with Ayar, pursuant to which Ayar agreed to purchase from the Company shares of common stock in a private placement. In addition, given the Underwriter’s exercise of the Overallotment Option, Ayar agreed to purchase additional shares of common stock. In October 2024, the Company completed the public offering pursuant to the 2024 Underwriting Agreement for aggregate net proceeds of $ 718.4 million and also consummated the private placement of shares to Ayar pursuant to the 2024 Subscription Agreement for aggregate net proceeds of $ 1,025.7 million. See Note 15 “Related Party Transactions” for more information. In July 2025, the Company entered into a subscription agreement (the “2025 Subscription Agreement”) with SMB Holding Corporation (“SMB”), a subsidiary of Uber, under which the Company agreed to issue and SMB agreed to purchase, in a private placement, the Company’s common stock equal to (i) $ 300.0 million in cash divided by (ii) an amount equal to the arithmetic average of the daily volume-weighted average price of the common stock over a period of 30 consecutive trading days ending on, and including, July 15, 2025. In September 2025, the Company and SMB entered into an amendment to the 2025 Subscription Agreement to reflect the adjustments made to the number of placement shares and purchase price per placement share therein due to the Reverse Stock Split (as defined below), and consummated the private placement of shares to SMB for aggregate net proceeds of $ 299.7 million. In April 2026, the Company entered into a subscription agreement with SMB (the “2026 Subscription Agreement”), under which the Company issued to SMB, in a private placement, and received aggregate net proceeds of $ 199.8 million of the Company’s common stock. See Note 8 “Stockholders’ Equity” for more information. In April 2026, the Company entered into an underwriting agreement (the “2026 Underwriting Agreement”) with the Underwriter, under which the Underwriter purchased from the Company shares of common stock in a registered offering, and the Company received aggregate net proceeds of $ 291.5 million. See Note 8 “Stockholders’ Equity” for more information. In April 2025, the Company issued $ 1.10 billion aggregate principal amount of 5.00 % convertible senior notes due in April 2030 (the “2030 Notes”) in a private offering. The net proceeds from the offering were $ 1.08 billion, after deducting debt issuance costs. In connection with the 2030 Notes offering, the Company paid $ 118.3 million to enter into privately negotiated capped call transactions with certain financial institutions to increase the effective conversion premium. Contemporaneously with the 2030 Notes offering, the Company repurchased $ 1,052.5 million aggregate principal amount of its 1.25 % convertible senior notes due 2026 (the “2026 Notes”), using $ 931.4 million of the net proceeds of the 2030 Notes. See Note 6 “Debt” for more information. In November 2025, the Company issued $ 975.0 million aggregate principal amount of 7.00 % convertible senior notes due in November 2031 (the “2031 Notes”) in a private offering. The net proceeds from the offering were $ 962.2 million, after deducting debt issuance costs. Contemporaneously with the 2031 Notes offering, the Company repurchased $ 755.7 million aggregate principal amount of the 2026 Notes, using $ 748.2 million of the net proceeds of the 2031 Notes. See Note 6 “Debt” for more information. 13 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 EVs and advanced EV powertrain components, including battery pack systems, (iii) construction of the CBU portion of AMP-2 in Saudi Arabia, (iv) further expansion of AMP-1 in Casa Grande, Arizona, (v) expansion of its retail studios and service center capabilities throughout North America and across the globe, (vi) building strategic partnerships in an effort to accelerate growth, and (vii) advancement of autonomous driving technology and expansion into new markets such as robotaxis. The Company is subject to the risks associated with such activities, including the need to further develop its technology, its marketing, and distribution channels; the need to further develop its sourcing, logistics, supply chain and manufacturing; and the need to hire additional management and other 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 on commercially reasonable terms. The Company participates in dynamic high-technology industries. Changes in any of the following areas could have a material adverse impact on the Company’s future financial position, results of operations, or cash flows: changes in the overall demand for its products and services; changes to future or existing vehicle programs; advances and trends in new technologies; competitive pressures; acceptance of the Company’s products and services; litigation or claims against the Company based on intellectual property (including patents); supply chain and logistical challenges and uncertainties; uncertainties surrounding trade policies as well as domestic and foreign tariffs and export controls; political, regulatory, social, environmental and economic conditions or other factors; and the Company’s ability to attract and retain employees necessary to support its business operations. A global economic recession, downturn or other adverse economic conditions, whether due to changes or uncertainties in trade policies, the imposition or proposed imposition of tariffs, export controls, threat of a trade war, persistent inflation, political instability, global or regional conflicts or other geopolitical events, public health crises, interest rate changes or other central bank policy actions, bank closures and liquidity concerns at financial institutions, or other factors, have in the past and may in the future have an adverse impact on the Company’s business, prospects, financial condition and results of operations. If any of the Company’s suppliers, sub-suppliers or partners experience financial distress, insolvency or disruptions in operations, they may be unable to fulfill their obligations or meet the Company’s production and quality requirements. Adverse economic conditions and uncertainty about the current and future domestic or global economic conditions may also cause the Company’s customers to defer purchases or cancel their orders in response to higher interest rates, limited consumer credit availability, lower cash reserves, fluctuations in foreign currency exchange rates, and weakened consumer confidence. A reduction in demand for the Company’s products may result in a decline in product sales, with a corresponding material adverse impact on the Company’s business, prospects, financial condition and results of operations. Given the Company’s premium brand positioning and pricing, an economic recession or downturn is likely to have a disproportionate adverse effect on the Company compared to its competitors in the EV and traditional automotive sectors, to the extent that consumer demand for luxury goods declines in favor of more cost-conscious alternatives. In addition, adverse economic conditions and uncertainties surrounding trade policies, tariffs and export controls have caused, and may continue to cause, supply chain and logistical challenges and operational risks. In particular, the U.S. federal government enacted the law commonly referred to as the One Big, Beautiful Bill Act (“OBBBA”), which eliminates, limits or phases out certain tax credits that had previously provided significant benefits to lessees and purchasers of EVs and adds new eligibility requirements on manufacturers to continue claiming tax credits on EV components. It also eliminates certain penalties for noncompliance with certain fuel efficiency standards and introduces certain key tax law modifications. Taken together, adverse economic conditions and uncertainties surrounding trade policies, tariffs and export controls, coupled with supply chain challenges and the potential difficulty of passing costs to customers or sharing the burden with suppliers, could reduce demand for the Company’s products and have a material adverse effect on the Company’s business, prospects, results of operations and financial condition. In addition, the deterioration of conditions in the financial markets may limit the Company’s ability to obtain external financing to fund its operations and capital expenditures for business growth on terms favorable to the Company, if at all. See “Risk Factors” in Part II, Item 1A of this Quarterly Report on Form 10-Q (the “Quarterly Report”) for more information regarding risks associated with a global economic recession, downturn or other adverse economic conditions. 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. 14 NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation and Principles of Consolidation The accompanying unaudited condensed consolidated financial statements included herein have been prepared in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”) and applicable rules and regulations of the U.S. Securities and Exchange Commission (the “SEC”) regarding interim financial reporting. Certain information and disclosures normally included in the financial statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to such rules and regulations. These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes included in the Company’s Form 10-K filed with the SEC on February 24, 2026. In management’s opinion, these unaudited condensed consolidated financial statements have been prepared on the same basis as the annual financial statements and reflect all adjustments, which include normal recurring adjustments, necessary for the fair statement of the Company’s financial position as of June 30, 2026 and the results of operations for the three and six months ended June 30, 2026 and 2025. The results of operations for the three and six months ended June 30, 2026 are not necessarily indicative of the results to be expected for the full year ending December 31, 2026 or any other future interim or annual period. On August 29, 2025, the Company effected a reverse stock split of its common stock at a ratio of one-for-ten (1:10) (the “Reverse Stock Split”) and a corresponding reduction of the authorized shares of common stock, as approved by the Company’s board of directors (the “Board of Directors”) and stockholders. The shares of the common stock began trading on a reverse split-adjusted basis at market open on September 2, 2025. Unless otherwise noted, the share, per share, and related information in this Quarterly Report on Form 10-Q reflects the effect of the Reverse Stock Split. The share and per share information of the Redeemable Convertible Preferred Stock remains unchanged, except for the information relating to the common stock underlying the Redeemable Convertible Preferred Stock. The condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation. Liquidity and Capital Resources Based on available liquidity and projected operating cash flows, future capital expenditure requirements, existing funding arrangements, and the anticipated benefits of operational initiatives implemented or underway, management believes it is probable that the Company will have sufficient liquidity to meet its obligations as they become due for at least one year after the date these condensed consolidated financial statements are issued. The Company identified approximately $ 1.4 billion in cash flow improvements for 2026. These opportunities span inventory, capital expenditures, and operating expenses, and together are intended to improve liquidity, reduce cash burn, and increase capital efficiency while preserving key growth programs, including its Midsize platform and autonomous commercialization initiatives. As part of such efforts, the Company has reduced its production volume to better align production plans with anticipated demand to improve working capital. Furthermore, the Company has in the past reduced the size of its workforce, and recently implemented workforce reduction plans and other actions relating to contractors in the first half of 2026, including the elimination of the second shift of production at the AMP-1 factory. Segment Reporting Operating segments are defined as components of an entity for which separate financial information is available and that is regularly reviewed by the Chief Operating Decision Maker (“CODM”) in deciding how to allocate resources to an individual segment and in assessing performance. The Company’s CODM is its Chief Executive Officer. 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. 15 Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. 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 derivative liabilities associated with the Redeemable Convertible Preferred Stock, estimates of residual value guarantee (“RVG”) liability, deferred revenue related to technology access fees and over-the-air (“OTA”) software updates, sales return reserves, assumptions used to measure stock-based compensation expense, income taxes, and estimated incremental borrowing rates for assessing operating and finance leases. These estimates and assumptions are based on management’s best estimates and judgment. Management evaluates its estimates and assumptions on an ongoing basis using historical experience and other factors, including the current economic environment, which management believes to be reasonable under the circumstances. The Company adjusts such estimates and assumptions when facts and circumstances dictate. Actual results may differ from these estimates under different assumptions or conditions due to the inherent uncertainty involved in making those estimates and any such differences may be material. Reclassification Certain prior-period amounts have been reclassified in the accompanying condensed consolidated financial statements and notes thereto in order to conform to the current period presentation. Cash, Cash Equivalents and Restricted Cash The Company considers all highly liquid investments with an original maturity at the date of purchase of three months or less to be cash equivalents. Restricted cash is primarily related to cash reserved or letters of credit issued for certain lease arrangements. The following table provides a reconciliation of cash, cash equivalents, and restricted cash to amounts shown in the statements of cash flows (in thousands): June 30, 2026 December 31, 2025 Cash and cash equivalents $ 732,601 $ 997,827 Restricted cash included in other current assets 36,765 19,860 Restricted cash included in other noncurrent assets 37,600 23,226 Total cash, cash equivalents, and restricted cash $ 806,966 $ 1,040,913 Accounts Receivable, Net Accounts receivable consists of receivables from our customers and from financial institutions offering financing products to our customers for the sale of vehicles, sales of powertrain kits, services, and regulatory credits. The Company provides an allowance against accounts receivable for any potential uncollectible amounts. The Company recorded an immaterial allowance for uncollectible amounts as of June 30, 2026 and December 31, 2025. Concentration of Credit Risk 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; however, its deposits exceed federally insured limits. The Company invests in highly rated securities, primarily issued by the U.S. government or liquid money market funds. As of June 30, 2026 and December 31, 2025, accounts receivable from the EV purchase agreement with the Government of Saudi Arabia, a related party of the Public Investment Fund (“PIF”), which is an affiliate of Ayar, as represented by the Ministry of Finance (the “EV Purchase Agreement”), represented 83.6 % and 68.0 % of the total accounts receivable balance, respectively. See Note 15 “Related Party Transactions” for more information. Concentration of Supply Risk The Company is dependent on its suppliers, the majority of which are single-source suppliers. The inability or unwillingness of these suppliers to deliver necessary components of our products according to the schedule and at prices, quality levels, and volumes acceptable to the Company, whether due to changes or uncertainties in trade policies, the imposition or proposed imposition of tariffs, threat of a trade war or otherwise, or its inability to efficiently manage these components, or the unavailability of stable domestic suppliers, could have a material adverse effect on the Company’s results of operations and financial condition. 16 Revenue from Contracts with Customers Vehicle Sales Vehicle sales revenue is generated from the sale of EVs to customers. The Company generated total vehicle sales revenue of $ 350.6 million and $ 615.3 million during the three and six months ended June 30, 2026, respectively, and $ 222.7 million and $ 417.6 million for the same periods in the prior year, respectively. The performance obligations identified in vehicle sale arrangements include delivery of the vehicle equipped with an onboard advanced driver assistance system (“ADAS”), the provision of maintenance services, the remarketing activities, and the right to unspecified OTA software updates as they become available over the term of the basic vehicle warranty, which is generally four years . Payment is typically received at the time of delivery or shortly after delivery of the vehicle to the customer, except for vehicle sales under the EV Purchase Agreement. The Company recognizes revenue related to the vehicle when the customer obtains control of the vehicle which occurs at a point in time either upon completion of delivery to the agreed-upon delivery location or upon pick up of the vehicle by the customer. 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. Payments received before the customer obtains control of the vehicle are recorded within other current liabilities in the condensed consolidated balance sheets. 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 returns. Return rate estimates are based on historical experience and the sales return reserve balance was not material as of June 30, 2026 and December 31, 2025. As of June 30, 2026 and December 31, 2025, the Company recorded $ 93.2 million and $ 87.5 million of total deferred revenue from all vehicle sales related to OTA, maintenance services, and remarketing activities for vehicle sales, respectively. The Company recorded $ 29.5 million and $ 30.0 million of the total deferred revenue within other current liabilities and the remaining $ 63.7 million and $ 57.5 million within other long-term liabilities in the condensed consolidated balance sheets as of June 30, 2026 and December 31, 2025, respectively. Revenue recognized that was included in the deferred revenue at the beginning of the period was not material during the three and six months ended June 30, 2026 and 2025. The Company provides a residual value guarantee to its commercial banking partners in connection with its vehicle leasing program. Related vehicle sales represented approximately 33 % and 36 % of total revenue during the three and six months ended June 30, 2026, respectively, and 51 % and 54 % for the same periods in the prior year, respectively. Under the vehicle leasing program, the Company recognizes revenue when control transfers upon delivery when the consumer-lessee takes physical possession of the vehicle, and bifurcates the RVG at fair value and accounts for it as a reduction to revenue and a guarantee liability. The remaining amount of the transaction price is allocated among the performance obligations. Any fees or incentives that are paid or payable by the Company to commercial banking partners are recognized as a reduction to vehicle sales revenue. The guarantee liability represents the estimated amount the Company expects to pay at the end of the lease term. The Company is released from residual risk upon either expiration or settlement of the RVG. 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 RVG liability. RVG liability is assessed subsequently for any changes on a quarterly basis. The Company recorded $ 131.5 million and $ 114.0 million of RVG liabilities as of June 30, 2026 and December 31, 2025, respectively, in other current liabilities and other long-term liabilities in the condensed consolidated balance sheets. 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. The maximum potential amount of future payments (in excess of RVG liabilities recorded) that the Company could be required to make was $ 724.5 million and $ 705.9 million as of June 30, 2026 and December 31, 2025, respectively. Vehicle Operating Lease Revenue The Company accounts for sales of vehicles with repurchase obligations as operating leases. The Company sells vehicles primarily to rental companies with an obligation to repurchase the vehicles at an agreed-upon repurchase price. The Company records the difference between the proceeds received and the agreed-upon repurchase price as vehicle leasing revenue on a straight-line basis over the term of the lease. Deferred leasing revenue and repurchase obligation were recorded in other current liabilities and other long-term liabilities in the condensed consolidated balance sheets, and were not material as of June 30, 2026 and December 31, 2025. The operating lease revenue was not material for the three and six months ended June 30, 2026 and 2025. 17 Sale and Leaseback Transactions The Company enters into sale and leaseback transactions in which the Company transfers control of vehicles to rental companies and simultaneously leases them back as operating leases. The Company recognizes revenue related to the vehicles under the arrangement when the rental companies obtain control of the vehicles and separately recognizes the lease obligations based on the present value of the future payments to the rental companies within other current liabilities and other long-term liabilities. The Company also records right-of-use assets which are amortized over the term of the leaseback. Operating lease expense is recognized on a straight-line basis over the term of the leaseback. The Company recorded revenue from sale and leaseback transactions of $ 16.6 million and $ 51.0 million during the three and six months ended June 30, 2026, respectively, and $ 19.0 million and $ 44.9 million for the same periods in the prior year, respectively. Operating lease expenses were not material. Other Other consists primarily of revenue from non-warranty after-sales vehicle services and parts, sales of battery pack systems, powertrain kits, retail merchandise, regulatory credits, and sales of non-Lucid vehicles acquired as part of the trade-in program. The Company generates regulatory credits revenue from the sale of tradable credits the Company earns under various regulations. This includes credits related to ZEVs and greenhouse gas (“GHG”), and the Corporate Average Fuel Economy (“CAFE”) credits. Regulatory credit revenue totaled $ 25.4 million during the three and six months ended June 30, 2026, and $ 18.7 million and $ 50.2 million for the same periods in the prior year, respectively. The revenue from sales of non-Lucid vehicles was not material for the three and six months ended June 30, 2026 and 2025. Redeemable Convertible Preferred Stock Accounting for the redeemable convertible preferred stock requires an evaluation to determine if liability classification is required under Accounting Standards Codification (“ASC”) 480-10. Liability classification is required for freestanding financial instruments that are (1) subject to an unconditional obligation requiring the issuer to redeem the instrument by transferring assets, such as those that are mandatorily redeemable, (2) instruments other than equity shares that embody an obligation of the issuer to repurchase its equity shares, or (3) certain types of instruments that obligate the issuer to issue a variable number of equity shares. Securities that do not meet the scoping criteria to be classified as a liability under ASC 480 are subject to redeemable equity guidance, which prescribes securities that may be subject to redemption upon an event not solely within the Company’s control to be classified as temporary equity. Securities classified in temporary equity are initially measured at the proceeds received, net of issuance costs and excluding the fair value of bifurcated embedded derivatives, and change in fair value of the redeemable convertible preferred stock contract as measured upon settlement based on the difference between the fair value of the redeemable convertible preferred stock at issuance versus the cash purchase price negotiated at fair value at contract inception, if any. Subsequent measurement of the carrying value of the redeemable convertible preferred stock is required as the instrument is probable of becoming redeemable. The Company accretes the redeemable convertible preferred stock to its redemption value. In certain circumstances, the redemption price may vary based on changes in stock price, in which case the Company recognizes changes in the redemption value immediately as they occur and adjust the carrying value of the security to equal the then current maximum redemption value at the end of each reporting period. Derivative Liabilities The Company evaluates all of its financial instruments, including convertible notes and redeemable convertible preferred stock, to determine if such instruments are derivatives or contain features that qualify as embedded derivatives. The Company applies significant judgment to identify and evaluate complex terms and conditions in these contracts and agreements to determine whether embedded derivatives exist. Embedded derivatives must be separately measured from the host contracts if all the requirements for bifurcation are met. The assessment of the conditions surrounding the bifurcation of embedded derivatives depends on the nature of the host contract. Bifurcated embedded derivatives are recognized at fair value, with changes in fair value recognized in the condensed consolidated statements of operations and comprehensive loss at each reporting period end. Bifurcated embedded derivatives are classified as a separate liability in the condensed consolidated balance sheet. The Company’s derivative liabilities are related to the conversion features embedded in the Redeemable Convertible Preferred Stock. See Note 7 “Redeemable Convertible Preferred Stock” for more information. Except for the policies described above, there have been no significant changes to accounting policies during the three and six months ended June 30, 2026. 18 NOTE 3 - WORKFORCE REDUCTION On June 22, 2026, the Company announced a reduction of its current U.S. workforce (the “June 2026 Plan”) that was designed to advance the Company’s path toward profitability and positive cash flow generation by streamlining its organizational structure, optimizing operating expenses, and aligning production plans with anticipated demand. The Company expects to substantially complete the June 2026 Plan by the end of the third quarter of 2026, subject to local law and consultation requirements. As a result of the June 2026 Plan, the Company expects to incur total workforce reduction charges of approximately $ 34 million. On February 20, 2026, the Company announced a reduction of its current U.S. workforce (the “February 2026 Plan”) that intended to align with its long-term operating goals as it focuses on the start of production of its Midsize platform, expansion into the robotaxi market and development of ADAS technologies, as well as the sale and distribution of its current models in existing and new geographies. The Company substantially completed the February 2026 Plan in the second quarter of 2026. On May 24, 2024, the Company announced a plan (the “May 2024 Plan”) intended to optimize operating expenses in response to evolving business needs and productivity improvement through a reduction in workforce. The Company completed the May 2024 Plan during the first quarter of 2025. During the three and six months ended June 30, 2026, the Company recorded workforce reduction charges of $ 33.7 million and $ 71.6 million, respectively, in the condensed consolidated statements of operations and comprehensive loss. The workforce reduction charges are comprised of $ 33.3 million related to the June 2026 Plan for the three and six months ended June 30, 2026, and $ 0.4 million and $ 38.3 million related to the February 2026 Plan for the three and six months ended June 30, 2026, respectively. The workforce reduction charges were primarily related to severance payments, employee benefits, employee transition, and acceleration of stock-based compensation expense. A summary of accrued liabilities associated with the workforce reduction plans was as follows (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 Accrued liabilities - beginning of period $ 30,457 $ — $ — $ 267 Workforce reduction charges excluding non-cash items (1)(2) 29,015 — 68,308 — Cash payments ( 29,340 ) — ( 38,176 ) ( 267 ) Accrued liabilities - end of period $ 30,132 $ — $ 30,132 $ — (1) Excluded non-cash items of $ 4.7 million for the three and six months ended June 30, 2026 related to the June 2026 Plan, comprised of the acceleration of stock-based compensation expenses. (2) Excluded non-cash items of $ 1.4 million credit for the six months ended June 30, 2026 related to the February 2026 Plan, which was net of accelerated stock-based compensation expense of $ 1.9 million and a reversal of $ 3.3 million related to previously recognized stock-based compensation expenses for unvested restricted stock awards. As of June 30, 2026, the accrued liabilities of $ 30.1 million associated with the June 2026 Plan and February 2026 Plan were included in other current liabilities on the condensed consolidated balance sheet. 19 NOTE 4 – BALANCE SHEETS COMPONENTS Inventory Inventory as of June 30, 2026 and December 31, 2025 was as follows (in thousands): June 30, 2026 December 31, 2025 Raw materials $ 487,482 $ 479,754 Work in progress 268,422 146,575 Finished goods 622,749 483,200 Total Inventory $ 1,378,653 $ 1,109,529 Inventory as of June 30, 2026 and December 31, 2025 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 used vehicles which the Company intends to sell. The Company recorded write-downs of $ 299.7 million and $ 537.6 million for the three and six months ended June 30, 2026, respectively, and $ 184.7 million and $ 336.3 million for the same periods in the prior year, respectively, to reduce its inventories to its net realizable values and for any excess or obsolete inventories, as well as losses from firm purchase commitments (“LCNRV”). While the final scope and application of recently announced changes in trade policy remain uncertain at this time, higher tariffs on imports and subsequent retaliatory tariffs could adversely impact the Company’s financial results. Property, plant and equipment, net Property, plant and equipment, net as of June 30, 2026 and December 31, 2025 was as follows (in thousands): June 30, 2026 December 31, 2025 Land and land improvements $ 70,967 $ 70,967 Building and improvements (1) 1,102,446 1,099,186 Machinery, tooling and vehicles (2)(3) 2,393,770 2,363,263 Computer equipment and software 159,288 140,419 Leasehold improvements 306,925 304,609 Furniture and fixtures 60,309 57,921 Finance leases 113,647 193,137 Construction in progress 1,449,228 970,960 Total Property, plant and equipment 5,656,580 5,200,462 Less accumulated depreciation and amortization ( 1,433,739 ) ( 1,222,330 ) Property, plant and equipment, net $ 4,222,841 $ 3,978,132 (1) As of June 30, 2026 and December 31, 2025, $ 127.5 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 15 “Related Party Transactions” for more information. (2) Included $ 28.4 million and $ 47.2 million of service loaner vehicles as of June 30, 2026 and December 31, 2025, respectively. (3) Included $ 32.8 million and $ 33.7 million of operating lease vehicles sold to rental companies as of June 30, 2026 and December 31, 2025, respectively. 20 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 with outside vendors. 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): June 30, 2026 December 31, 2025 Machinery and tooling $ 635,554 $ 418,426 Construction of AMP-1 and AMP-2 (1) 749,325 512,502 Leasehold improvements and other 64,349 40,032 Total construction in progress $ 1,449,228 $ 970,960 (1) As of June 30, 2026 and December 31, 2025, $ 67.3 million of capital expenditure support received from MISA was recorded primarily as a deduction to the AMP-2 facility construction in progress balance. See Note 15 “Related Party Transactions” for more information. Depreciation and amortization expense was $ 122.2 million and $ 238.6 million for the three and six months ended June 30, 2026, respectively, and $ 111.1 million and $ 209.0 million for the same periods in the prior year, respectively. The amount of interest capitalized on construction in progress related to significant capital asset constructions was not material for the three and six months ended June 30, 2026 and 2025. Other current liabilities Other current liabilities as of June 30, 2026 and December 31, 2025 were as follows (in thousands): June 30, 2026 December 31, 2025 Engineering, design, and testing accrual $ 67,502 $ 56,237 Capital expenditures accrual 257,076 234,313 Accrued compensation 191,828 155,906 Accrued purchases (1) 120,767 183,330 Retail leasehold improvements accrual 5,375 5,804 Third-party services accrual 46,228 72,083 Tooling liability 59,978 35,138 Operating lease liabilities, current portion 67,198 64,171 Reserve for loss on firm inventory purchase commitments 63,538 131,904 Accrued warranty 74,908 58,765 Accrued interest 45,559 29,841 Deferred revenue (2) 29,450 29,950 Sales incentive accrual 21,911 34,626 RVG liabilities 60,201 55,448 Other current liabilities 247,582 245,125 Total other current liabilities $ 1,359,101 $ 1,392,641 (1) Primarily represent accruals for inventory related purchases and transportation charges that had not been invoiced. (2) Represent deferred revenue from vehicle sales primarily related to OTA and remarketing activities. 21 Other long-term liabilities Other long-term liabilities as of June 30, 2026 and December 31, 2025 were as follows (in thousands): June 30, 2026 December 31, 2025 Operating lease liabilities, net of current portion $ 228,041 $ 225,434 Other long-term liabilities (1)(2) 371,400 357,305 Total other long-term liabilities $ 599,441 $ 582,739 (1) As of June 30, 2026 and December 31, 2025, $ 114.8 million of deferred revenue was recorded within other long-term liabilities in the condensed consolidated balance sheets, respectively, 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 15 “Related Party Transactions” for more information. (2) Included accrued warranty balance of $ 98.5 million and $ 93.4 million as of June 30, 2026 and December 31, 2025, respectively. Accrued warranty Accrued warranty activities consisted of the following (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 Accrued warranty - beginning of period (2) $ 164,314 $ 116,876 $ 152,201 $ 112,478 Warranty costs incurred ( 9,076 ) ( 7,445 ) ( 16,074 ) ( 15,359 ) Provision for warranty (1) 18,172 14,960 37,283 27,272 Accrued warranty - end of period (2) $ 173,410 $ 124,391 $ 173,410 $ 124,391 (1) Provision for warranty for the three and six months ended June 30, 2026 and 2025 included estimated costs related to the recalls identified and/or special campaigns to repair or replace items under warranties. (2) Accrued warranty balance of $ 74.9 million and $ 58.8 million was recorded within other current liabilities, and $ 98.5 million and $ 93.4 million was recorded within other long-term liabilities, in the condensed consolidated balance sheets as of June 30, 2026 and December 31, 2025, respectively. NOTE 5 - FAIR VALUE MEASUREMENTS AND FINANCIAL INSTRUMENTS The accounting standard for fair value measurements provides a framework for measuring fair value and requires expanded disclosures regarding fair value measurements. Fair value is defined as the price that would be received for an asset or the “exit price” that would be paid to transfer a liability in the principal or most advantageous market in an orderly transaction between independent market participants on the measurement date. The Company measures certain financial assets and liabilities at fair value at each reporting period using a fair value hierarchy, which requires the Company to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. A financial instrument classification within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. This hierarchy prioritizes the inputs into three broad levels as follows: • Level 1 —Quoted prices (unadjusted) in active markets for identical assets or liabilities. • Level 2 —Observable inputs other than quoted prices in active markets for identical assets and liabilities, quoted prices for identical or similar assets or liabilities in inactive markets, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. • Level 3 —Inputs that are generally unobservable and typically reflect management’s estimates of assumptions that market participants would use in pricing the asset or liability. Factors used to develop the estimated fair value are unobservable inputs that are not supported by market activity. The sensitivity of the fair value measurement to changes in unobservable inputs may result in a significantly higher or lower measurement. Cash, cash equivalents, and investments are reported at their respective fair values on the Company’s condensed consolidated balance sheets. The Company’s short-term and long-term investments are classified as available-for-sale securities. Carrying amounts of accounts receivable, accounts payable, and other current liabilities approximate their estimated fair values. 22 The following table sets forth the Company’s financial assets subject to fair value measurements on a recurring basis by level within the fair value hierarchy as of June 30, 2026 and December 31, 2025 (in thousands): June 30, 2026 Reported As: Amortized cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value Cash and cash equivalents Short-Term Investments Cash $ 378,128 $ — $ — $ 378,128 $ 378,128 $ — Level 1: Money market funds 90,713 — — 90,713 90,713 — U.S. Treasury securities 222,534 — ( 2 ) 222,532 198,616 23,916 Subtotal 313,247 — ( 2 ) 313,245 289,329 23,916 Level 2: Certificates of deposit 4,803 — ( 7 ) 4,796 — 4,796 Commercial paper 65,148 — ( 4 ) 65,144 65,144 — Subtotal 69,951 — ( 11 ) 69,940 65,144 4,796 Total $ 761,326 $ — $ ( 13 ) $ 761,313 $ 732,601 $ 28,712 December 31, 2025 Reported As: Amortized cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value Cash and cash equivalents Short-Term Investments Long-Term Investments Cash $ 762,077 $ — $ — $ 762,077 $ 762,077 $ — $ — Level 1: Money market funds 235,750 — — 235,750 235,750 — — U.S. Treasury securities 575,159 3,655 — 578,814 — 398,011 180,803 Subtotal 810,909 3,655 — 814,564 235,750 398,011 180,803 Level 2: Time deposits (1) 65,000 — — 65,000 — 65,000 — Corporate debt securities 471,819 3,442 — 475,261 — 168,082 307,179 Subtotal 536,819 3,442 — 540,261 — 233,082 307,179 Total $ 2,109,805 $ 7,097 $ — $ 2,116,902 $ 997,827 $ 631,093 $ 487,982 (1) Included $ 50.0 million of time deposits with GIB in short-term investments. GIB is a related party of the PIF, which is an affiliate of Ayar. See Note 15 “Related Party Transactions” for more information. During the three and six months ended June 30, 2026, the Company recorded realized gains of nil and $ 5.7 million on the sale of available-for-sale securities, and immaterial realized gains for the same periods in the prior year. Accrued interest receivable excluded from both the fair value and amortized cost basis of the available-for-sale securities was immaterial and $ 13.1 million as of June 30, 2026 and December 31, 2025, respectively, and was recorded in other current assets on its condensed consolidated balance sheets. As of June 30, 2026 and December 31, 2025, 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: June 30, 2026 Amortized cost Estimated Fair Value Within one year $ 28,719 $ 28,712 23 On November 6, 2023, the Company received 28,352,273 ordinary shares of Aston Martin with an initial fair value of $ 73.2 million. The Company remeasured the shares and recorded fair values of $ 14.2 million and $ 24.3 million within long-term investments in the condensed consolidated balance sheets as of June 30, 2026 and December 31, 2025, respectively. 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. The Company recognized an unrealized gain of $ 0.5 million and an unrealized loss of $ 9.7 million during the three and six months ended June 30, 2026, respectively, and an unrealized gain of $ 3.9 million and an unrealized loss of $ 9.5 million for the same periods in the prior year, respectively, in change of fair value of equity securities of a related party in the condensed consolidated statement of operations and comprehensive loss. The Company also recognized an unrealized foreign currency gain of $ 0.1 million and an unrealized foreign currency loss of $ 0.4 million during the three and six months ended June 30, 2026, respectively, and unrealized foreign currency gains of $ 1.6 million and $ 2.8 million for the same periods in the prior year, respectively, related to these equity securities in other income (expense), net in the condensed consolidated statement of operations and comprehensive loss. See Note 15 “Related Party Transactions” for more information. Level 3 liabilities consist of the common stock warrant liability and the derivative liabilities associated with the Redeemable Convertible Preferred Stock, of which the fair values were measured upon issuance of the Private Placement Warrants and the Redeemable Convertible Preferred Stock and are remeasured at each reporting period. The valuation methodology and underlying assumptions for the Redeemable Convertible Preferred Stock are discussed further in Note 7 “Redeemable Convertible Preferred Stock”. The fair value of the common stock warrant liability remains unchanged and was nil as of June 30, 2026 and December 31, 2025. Level 3 liabilities also consist of residual value guarantee liabilities, of which the fair value is measured initially upon delivery of vehicles and assessed subsequently for any changes on a quarterly basis. Significant changes in the unobservable inputs used in determining the fair value would result in significant changes to the fair value measurement. The following tables present a reconciliation of the common stock warrant liability and derivative liabilities associated with the Redeemable Convertible Preferred Stock measured and recorded at fair value on a recurring basis (in thousands): Three Months Ended June 30, 2026 Six Months Ended June 30, 2026 Series A Derivative Liability Series B Derivative Liability Series C Derivative Liability Series A Derivative Liability Series B Derivative Liability Series C Derivative Liability Fair value-beginning of period $ 5,900 $ 2,925 $ — $ 10,800 $ 5,400 $ — Issuance — — 115,390 — — 115,390 Change in fair value ( 5,200 ) ( 2,550 ) 47,190 ( 10,100 ) ( 5,025 ) 47,190 Fair value-end of period $ 700 $ 375 $ 162,580 $ 700 $ 375 $ 162,580 Three Months Ended June 30, 2025 Six Months Ended June 30, 2025 Series A Derivative Liability Series B Derivative Liability Common Stock Warrant Liability Series A Derivative Liability Series B Derivative Liability Common Stock Warrant Liability Fair value-beginning of period $ 232,100 $ 125,625 $ 6,653 $ 408,800 $ 230,625 $ 19,514 Change in fair value ( 76,900 ) ( 34,575 ) ( 5,322 ) ( 253,600 ) ( 139,575 ) ( 18,183 ) Fair value-end of period $ 155,200 $ 91,050 $ 1,331 $ 155,200 $ 91,050 $ 1,331 NOTE 6 – DEBT The carrying value of the Company’s debt as of June 30, 2026 and December 31, 2025 was as follows (in millions): June 30, 2026 December 31, 2025 2026 Notes $ 204.0 $ 203.7 2030 Notes 1,085.9 1,084.2 2031 Notes 963.3 962.4 GIB credit facility 503.1 468.0 DDTL credit facility 497.4 — Total debt 3,253.7 2,718.3 Current portion of debt ( 707.1 ) ( 671.7 ) Debt, net of current portion $ 2,546.6 $ 2,046.6 24 Convertible Senior Notes The Company accounted for the issuances of the 2026 Notes, the 2030 Notes, and the 2031 Notes as single liabilities measured at its respective amortized cost, as no other embedded features require bifurcation and recognition as derivatives. It determined the fair value of the Convertible Senior Notes based on quoted prices in markets that are not active, which is considered a Level 2 valuation input. The following table sets forth a summary of the 2026 Notes, the 2030 Notes, and the 2031 Notes as of June 30, 2026 and December 31, 2025 (in millions): June 30, 2026 Principal Amount Unamortized Debt Discounts and Issuance Costs Net Carrying Amount Fair Value 2026 Notes $ 204.3 $ ( 0.3 ) $ 204.0 $ 196.5 2030 Notes 1,100.0 ( 14.1 ) 1,085.9 517.0 2031 Notes 975.0 ( 11.7 ) 963.3 515.5 Total convertible senior notes $ 2,279.3 $ ( 26.1 ) $ 2,253.2 $ 1,229.0 December 31, 2025 Principal Amount Unamortized Debt Discounts and Issuance Costs Net Carrying Amount Fair Value 2026 Notes $ 204.3 $ ( 0.6 ) $ 203.7 $ 189.7 2030 Notes 1,100.0 ( 15.8 ) 1,084.2 655.9 2031 Notes 975.0 ( 12.6 ) 962.4 775.1 Total convertible senior notes $ 2,279.3 $ ( 29.0 ) $ 2,250.3 $ 1,620.7 The effective interest rate for the 2026 Notes, the 2030 Notes, and the 2031 Notes is 1.5 %, 5.4 %, and 7.3 %, respectively. The components of interest expense related to the 2026 Notes, the 2030 Notes, and the 2031 Notes were as follows (in millions): Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 Contractual interest $ 31.4 $ 15.9 $ 62.9 $ 22.2 Amortization of debt discounts and debt issuance costs 1.5 1.4 2.9 2.7 Interest expense $ 32.9 $ 17.3 $ 65.8 $ 24.9 2026 Notes 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 in a private offering to qualified institutional buyers pursuant to Rule 144A under the Securities Act, at an issuance price equal to 99.5 % of the principal amount of 2026 Notes. The Company has designated the 2026 Notes as green bonds, whose proceeds will be allocated in accordance with the Company’s green bond framework. The 2026 Notes were issued pursuant to and are governed by an indenture dated December 14, 2021, between the Company and U.S. Bank National Association as the trustee. The proceeds from the issuance of the 2026 Notes were $ 1,986.6 million, net of the issuance discount and debt issuance costs. The 2026 Notes are unsecured obligations which bear regular interest at 1.25 % per annum and are payable semi-annually in arrears on June 15 and December 15 of each year, beginning on June 15, 2022. The 2026 Notes will mature on December 15, 2026, unless repurchased, redeemed, or converted in accordance with their terms prior to such date. The 2026 Notes are convertible into cash, shares of the Company’s common stock, or a combination of cash and shares of the Company’s common stock, at the Company’s election, at an initial conversion rate of 1.8255 shares of the Company’s common stock per $1,000 principal amount of 2026 Notes, which is equivalent to an initial conversion price of approximately $ 547.80 per share of the Company’s common stock. The conversion rate and conversion price will be subject to customary adjustments upon the occurrence of certain events, including a reverse stock split. The Company may redeem for cash all or any portion of the 2026 Notes, at the Company’s option, on or after December 20, 2024 if the last reported sale price of the Company’s common stock has been at least 130 % of the conversion price then in effect for at least 20 trading days at a redemption price equal to 100 % of the principal amount of the 2026 Notes to be redeemed, plus accrued and unpaid interest up to the day before the redemption date. The holders may require the Company to repurchase the 2026 Notes upon the occurrence of certain fundamental change transactions at a redemption price equal to 100 % of the principal amount of the 2026 Notes redeemed, plus accrued and unpaid interest up to the day before the redemption date. 25 Holders of the 2026 Notes may convert all or a portion of their 2026 Notes at their option prior to September 15, 2026, in multiples of $1,000 principal amounts, only under the following circumstances: • during any calendar quarter commencing after the quarter ended on March 31, 2022 (and only during such calendar quarter), if the Company’s common stock price exceeds 130 % of the conversion price for at least 20 trading days during the 30 consecutive trading days at the end of the prior calendar quarter; • during the five consecutive business days immediately after any 10 consecutive trading day period in which the trading price per $1,000 principal amount of notes for each trading day of the measurement period was less than 98 % of the product of the last reported sale price per share of the Company’s common stock on such trading day and the conversion rate on such trading day; • upon the occurrence of specified corporate events; or • if the Company calls any or all 2026 Notes for redemption, at any time prior to the close of business on the scheduled trading day immediately preceding the redemption date, but only with respect to the notes called for redemption. On or after September 15, 2026, the 2026 Notes are convertible at any time until the close of business on the second scheduled trading day immediately preceding the maturity date. Holders of the 2026 Notes who convert the 2026 Notes in connection with a make-whole fundamental change, as defined in the indenture governing the 2026 Notes, or in connection with a redemption may be entitled to an increase in the conversion rate. In April 2025, contemporaneously with the 2030 Notes offering, the Company repurchased $ 1,052.5 million aggregate principal amount of the 2026 Notes, using $ 931.4 million of the net proceeds of the 2030 Notes. The difference between the consideration paid with the net proceeds from the 2030 Notes to repurchase a portion of the 2026 Notes principal amount and the then carrying value of the 2026 Notes resulted in a gain of $ 116.4 million. Following the redemption, the Company’s outstanding principal balance of the 2026 Notes was $ 960.0 million. In November 2025, contemporaneously with the 2031 Notes offering, the Company repurchased $ 755.7 million aggregate principal amount of the 2026 Notes, using $ 748.2 million of the net proceeds of the 2031 Notes. The difference between the consideration paid with the net proceeds from the 2031 Notes to repurchase a portion of the 2026 Notes principal amount and the then carrying value of the 2026 Notes resulted in a gain of $ 5.4 million. Following the redemption, the Company’s outstanding principal balance of the 2026 Notes was $ 204.3 million. The repurchases of the 2026 Notes were accounted for as debt extinguishments. During the year ended December 31, 2025, the Company recorded a total gain of $ 121.8 million within gain on extinguishment of debt in the consolidated statement of operations and comprehensive loss. The 2026 Notes were not eligible for conversion as of June 30, 2026 and December 31, 2025. 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 June 30, 2026 and December 31, 2025, the Company was in compliance with applicable covenants under the indentures governing the 2026 Notes. 2030 Notes and Capped Call Transactions 2030 Notes In April 2025, the Company issued an aggregate of $ 1,100.0 million principal amount of 5.00 % convertible senior notes due in April 2030 in a private offering to qualified institutional buyers pursuant to Rule 144A under the Securities Act, at an issuance price equal to 100.0 % of the principal amount of the 2030 Notes. The 2030 Notes were issued pursuant to and are governed by an indenture dated April 8, 2025, between the Company and U.S. Bank Trust Company, National Association as the trustee. The proceeds from the issuance of the 2030 Notes were $ 1,081.8 million, net of the debt issuance costs. Contemporaneously with the 2030 Notes offering, the Company entered into privately negotiated transactions with certain holders of the 2026 Notes to repurchase $ 1,052.5 million aggregate principal amount of the 2026 Notes, using $ 931.4 million of the net proceeds of the 2030 Notes. The 2030 Notes are unsecured obligations which bear regular interest at 5.00 % per annum and are payable semi-annually in arrears on April 1 and October 1 of each year, beginning on October 1, 2025. The 2030 Notes will mature on April 1, 2030, unless repurchased, redeemed, or converted in accordance with their terms prior to such date. The 2030 Notes are convertible into cash, shares of the Company’s common stock, or a combination of cash and shares of the Company’s common stock, at the Company’s election, at an initial conversion rate of 33.3333 shares of the Company’s common stock per $1,000 principal amount of the 2030 Notes, which is equivalent to an initial conversion price of approximately $ 30.00 per share of the Company’s common stock. The conversion rate and conversion price will be subject to customary adjustments upon the occurrence of certain events, including a reverse stock split. The Company may redeem for cash all or any portion of the 2030 Notes, at the Company’s option, on or after April 6, 2028 if the last reported sale price of the Company’s common stock has been at least 130 % of the conversion price then in effect for at least 20 trading days at a redemption price equal to 100 % of the principal amount of the 2030 Notes to be redeemed, plus accrued and unpaid interest up to the day before the redemption date. The holders may require the Company to repurchase the 2030 Notes upon the occurrence of certain fundamental change transactions at a redemption price equal to 100 % of the principal amount of the 2030 Notes redeemed, plus accrued and unpaid interest up to the day before the redemption date. 26 Holders of the 2030 Notes may convert all or a portion of their 2030 Notes at their option prior to January 1, 2030, in multiples of $1,000 principal amounts, only under the following circumstances: • during any calendar quarter commencing after the quarter ended on June 30, 2025 (and only during such calendar quarter), if the Company’s common stock price exceeds 130 % of the conversion price for at least 20 trading days during the 30 consecutive trading days at the end of the prior calendar quarter; • during the five consecutive business days immediately after any 10 consecutive trading day period in which the trading price per $1,000 principal amount of notes for each trading day of the measurement period was less than 98 % of the product of the last reported sale price per share of the Company’s common stock on such trading day and the conversion rate on such trading day; • upon the occurrence of specified corporate events; or • if the Company calls any or all 2030 Notes for redemption, at any time prior to the close of business on the scheduled trading day immediately preceding the redemption date, but only with respect to the notes called for redemption. On or after January 1, 2030, the 2030 Notes are convertible at any time until the close of business on the second scheduled trading day immediately preceding the maturity date. Holders of the 2030 Notes who convert the 2030 Notes in connection with a make-whole fundamental change, as defined in the indenture governing the 2030 Notes, or in connection with a redemption may be entitled to an increase in the conversion rate. The 2030 Notes were not eligible for conversion as of June 30, 2026 and December 31, 2025. No sinking fund is provided for the 2030 Notes, which means that the Company is not required to redeem or retire them periodically. As of June 30, 2026 and December 31, 2025, the Company was in compliance with applicable covenants under the indentures governing the 2030 Notes. Capped Call Transactions In connection with the 2030 Notes offering, the Company paid $ 118.3 million to enter into privately negotiated capped call transactions (the “Capped Call Transactions”) with certain financial institutions. The Capped Call Transactions cover, subject to anti-dilution adjustments, the number of shares of the Company’s common stock initially underlying the 2030 Notes. The Capped Call Transactions have an expiration date of April 1, 2030. The Company expects the Capped Call Transactions generally would reduce the potential dilution to the Company’s common stock upon conversion of the notes or offset any cash payments that the Company could be required to make in excess of the principal amount of any converted notes, as the case may be, in the event that the market price per share of Lucid’s common stock, as measured under the terms of the Capped Call Transactions, is greater than the strike price of the Capped Call Transactions. The initial strike price of the Capped Call Transactions corresponds to the initial conversion price of the 2030 Notes, or approximately $ 30.00 per share of the Company’s common stock. The initial cap price of the Capped Call Transactions was $ 48.00 per share of the Company’s common stock and is subject to customary anti-dilution adjustments. The Capped Call Transactions were separate transactions, entered into by the Company with certain financial institutions, and were not part of the terms of the 2030 Notes. Holders of the 2030 Notes will not have any rights with respect to the Capped Call Transactions. The Company recorded the Capped Call Transactions as a reduction to additional paid-in capital in the condensed consolidated balance sheets as of June 30, 2026 and December 31, 2025, with no remeasurement in subsequent periods as they meet the conditions for equity classification. 2031 Notes In November 2025, the Company issued an aggregate of $ 975.0 million principal amount of 7.00 % convertible senior notes due in November 2031 in a private offering to qualified institutional buyers pursuant to Rule 144A under the Securities Act, at an issuance price equal to 100 % of the principal amount of the 2031 Notes. The 2031 Notes were issued pursuant to and are governed by an indenture dated November 17, 2025, between the Company and U.S. Bank Trust Company, National Association as the trustee. The proceeds from the issuance of the 2031 Notes were $ 962.2 million, net of the debt issuance costs. Contemporaneously with the 2031 Notes offering, the Company entered into privately negotiated transactions with certain holders of the 2026 Notes to repurchase $ 755.7 million aggregate principal amount of the 2026 Notes, using $ 748.2 million of the net proceeds of the 2031 Notes. 27 The 2031 Notes are unsecured obligations which bear regular interest at 7.00 % per annum and are payable semi-annually in arrears on May 1 and November 1 of each year, beginning on May 1, 2026. The 2031 Notes will mature on November 1, 2031, unless repurchased, redeemed, or converted in accordance with their terms prior to such date. The 2031 Notes are convertible into cash, shares of the Company’s common stock, or a combination of cash and shares of the Company’s common stock, at the Company’s election, at an initial conversion rate of 48.0475 shares of the Company’s common stock per $1,000 principal amount of the 2031 Notes, which is equivalent to an initial conversion price of approximately $ 20.81 per share of the Company’s common stock. The conversion rate and conversion price will be subject to customary adjustments upon the occurrence of certain events, including a reverse stock split. The Company may redeem for cash all or any portion of the 2031 Notes, at the Company’s option, on or after November 6, 2028 and on or before the 31st scheduled trading day immediately preceding the maturity date, if the last reported sale price of the Company’s common stock has been at least 130 % of the conversion price then in effect for at least 20 trading days at a redemption price equal to 100 % of the principal amount of the 2031 Notes to be redeemed, plus accrued and unpaid interest up to the day before the redemption date. The holders may require the Company to repurchase the 2031 Notes on November 1, 2029 or upon the occurrence of certain fundamental change transactions at a redemption price equal to 100 % of the principal amount of the 2031 Notes redeemed, plus accrued and unpaid interest up to the day before the redemption date. Holders of the 2031 Notes may convert all or a portion of their 2031 Notes at their option prior to August 1, 2031, in multiples of $1,000 principal amounts, only under the following circumstances: • during any calendar quarter commencing after the quarter ended on March 31, 2026 (and only during such calendar quarter), if the Company’s common stock price exceeds 130 % of the conversion price for at least 20 trading days during the 30 consecutive trading days at the end of the prior calendar quarter; • during the five consecutive business days immediately after any 10 consecutive trading day period in which the trading price per $1,000 principal amount of notes for each trading day of the measurement period was less than 98 % of the product of the last reported sale price per share of the Company’s common stock on such trading day and the conversion rate on such trading day; • upon the occurrence of specified corporate events; or • if the Company calls any or all 2031 Notes for redemption, at any time prior to the close of business on the scheduled trading day immediately preceding the redemption date, but only with respect to the notes called for redemption. On or after August 1, 2031, the 2031 Notes are convertible at any time until the close of business on the second scheduled trading day immediately preceding the maturity date. Holders of the 2031 Notes who convert the 2031 Notes in connection with a make-whole fundamental change, as defined in the indenture governing the 2031 Notes, or in connection with a redemption may be entitled to an increase in the conversion rate. The 2031 Notes were not eligible for conversion as of June 30, 2026 and December 31, 2025. No sinking fund is provided for the 2031 Notes, which means that the Company is not required to redeem or retire them periodically. As of June 30, 2026 and December 31, 2025, the Company was in compliance with applicable covenants under the indentures governing the 2031 Notes. Ayar Prepaid Forward Transactions In connection with the pricing of the 2030 Notes, Ayar entered into a privately negotiated prepaid forward transaction with a forward counterparty that is an affiliate of one of the initial purchasers of the 2030 Notes (the “Forward Counterparty”), pursuant to which Ayar will purchase approximately $ 430.0 million of the Company’s common stock with delivery expected to occur on or about the maturity date for the 2030 Notes, subject to the ability of the Forward Counterparty to elect to settle all or a portion of the prepaid forward transaction early. In connection with the pricing of the 2031 Notes, Ayar entered into a privately negotiated prepaid forward transaction with the Forward Counterparty, pursuant to which Ayar will purchase approximately $ 636.7 million of the Company’s common stock with delivery expected to occur on or about the maturity date for the 2031 Notes, subject to the ability of the Forward Counterparty to elect to settle all or a portion of the prepaid forward transaction early. The Company is not a party to the prepaid forward transactions. In connection with Ayar agreeing to enter into and fund the prepaid forward transactions, the Company has agreed to pay a periodic cash fee to Ayar, which shall initially accrue at a rate of 0.5 % per annum on the amount of prepaid forward transactions and be recalculated to reflect any early settlement of the prepaid forward transactions. The periodic fee incurred associated with the prepaid forward transactions was not material for the three and six months ended June 30, 2026 and 2025. 28 SIDF Loan Agreement On February 27, 2022, Lucid LLC, a limited liability company established in Saudi Arabia and a subsidiary of the Company (“Lucid LLC”) entered into a loan agreement (as subsequently amended, the “SIDF Loan Agreement”) with SIDF, a related party of the PIF, which is an affiliate of Ayar. Under the SIDF Loan Agreement, SIDF has committed to provide loans (the “SIDF Loans”) to Lucid LLC in an aggregate principal amount of up to SAR 5.19 billion (approximately $ 1.4 billion); provided that SIDF may reduce the availability of SIDF Loans under the facility in certain circumstances. SIDF Loans will be subject to repayment in semi-annual installments in amounts ranging from SAR 25 million (approximately $ 6.7 million) to SAR 350 million (approximately $ 93.2 million). SIDF Loans are financing and will be used to finance certain costs in connection with the development and construction of AMP-2. Lucid LLC may repay SIDF Loans earlier than the maturity date without penalty. Obligations under the SIDF Loan Agreement do not extend to the Company or any of its other subsidiaries. SIDF Loans will not bear interest. Instead, Lucid LLC will be required to pay SIDF service fees, consisting of follow-up and technical evaluation fees, ranging, in aggregate, from SAR 415 million (approximately $ 110.5 million) to SAR 1.77 billion (approximately $ 471.1 million), over the term of the SIDF Loans. SIDF Loans will be secured by security interests in the equipment, machines and assets funded thereby. The SIDF Loan Agreement contains certain restrictive financial covenants and imposes annual caps on Lucid LLC’s payment of dividends, distributions of paid-in capital, or certain capital expenditures. 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 June 30, 2026 and December 31, 2025 , no amount was outstanding under the SIDF Loan Agreement. GIB Facility Agreement 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 the PIF, which is an affiliate of Ayar. The GIB Facility Agreement provided for two committed revolving credit facilities in an aggregate principal amount of SAR 1.0 billion (approximately $ 266.1 million). On March 12, 2023, Lucid LLC entered into the 2023 Amended GIB Facility Agreement to combine the two committed revolving credit facilities into a committed SAR 1.0 billion (approximately $ 266.1 million) 2023 GIB Credit Facility which may be used for general corporate purposes. Loans under the 2023 Amended GIB Facility Agreement had a maturity of no more than 12 months and bore interest at a rate of 1.40 % per annum over SAIBOR (based on the term of borrowing) and associated fees. Under the 2023 Amended GIB Facility Agreement, the Company was required to pay a quarterly commitment fee of 0.15 % per annum based on the unutilized portion of the 2023 GIB Credit Facility. On February 24, 2025, Lucid LLC entered into the 2025 GIB Credit Facility maturing on February 24, 2028 to increase the credit facility committed amount from SAR 1.0 billion (approximately $ 266.1 million) to SAR 1.9 billion (approximately $ 505.7 million). Loans under the 2025 GIB Credit Facility may be used for general corporate purposes, have a maturity of no more than 12 months, and bear interest at a rate of 1.40 % per annum over SAIBOR (based on the term of borrowing) and associated fees. The Company is required to pay a quarterly commitment fee of 0.25 % per annum based on the unutilized portion of the 2025 GIB Credit Facility. Commitments under the 2025 GIB Credit Facility will terminate, and all amounts then outstanding thereunder would become payable, on the maturity date of the 2025 GIB Credit Facility. The commitment fees for the three and six months ended June 30, 2026 and 2025 were not material. The 2025 GIB Credit Facility contains certain conditions precedent to drawdowns, representations and warranties and covenants of Lucid LLC and events of default. As of June 30, 2026 and December 31, 2025, the Company had outstanding borrowings of SAR 1,890.0 million (approximately $ 503.1 million) and SAR 1,755.0 million (approximately $ 468.0 million), respectively. The outstanding borrowings were recorded within current portion of debt in the condensed consolidated balance sheets. The weighted average interest rate on the outstanding borrowings was 6.18 % and 6.44 % as of June 30, 2026 and December 31, 2025, respectively. As of June 30, 2026 and December 31, 2025, availability under the GIB credit facility was SAR 8.7 million (approximately $ 2.3 million) and SAR 143.5 million (approximately $ 38.3 million), respectively, after giving effect to the outstanding letters of credit. The Company recorded interest expense of SAR 29.7 million (approximately $ 7.9 million) and SAR 59.4 million (approximately $ 15.8 million) during the three and six months ended June 30, 2026, respectively, and $ 3.6 million and $ 6.1 million for the same periods in the prior year. As of June 30, 2026 and December 31, 2025, the Company was in compliance with applicable covenants under the GIB credit facility . 29 ABL Credit Facility 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. Borrowings under the ABL Credit Facility bear interest at the applicable interest rates specified in the credit agreement governing the ABL Credit Facility. In June 2024, the Company amended the ABL Credit Facility to update the Canadian reference rate. Availability under the ABL Credit Facility is subject to the value of eligible assets in the borrowing base and is reduced by outstanding loan borrowings and issuances of letters of credit which bear customary letter of credit fees. Subject to certain terms and conditions, the Company may request one or more increases in the amount of credit commitments under the ABL Credit Facility in an aggregate amount up to the sum of $ 500.0 million plus certain other amounts. The Company is required to pay a quarterly commitment fee of 0.25 % per annum based on the unutilized portion of the ABL Credit Facility. The ABL Credit Facility contains customary covenants that limit the ability of the Company and the ability of its restricted subsidiaries to, among other activities, pay dividends, incur debt, create liens and encumbrances, redeem or repurchase stock, dispose of certain assets, consummate acquisitions or other investments, prepay certain debt, engage in transactions with affiliates, engage in sale and leaseback transactions or consummate mergers and other fundamental changes. The ABL Credit Facility also includes a minimum liquidity covenant which, at the Company’s option following satisfaction of certain pre-conditions, may be replaced with a springing, minimum fixed charge coverage ratio financial covenant, in each case on terms set forth in the credit agreement governing the ABL Credit Facility. As of June 30, 2026 and December 31, 2025, the Company was in compliance with applicable covenants under the ABL Credit Facility. As of June 30, 2026 and December 31, 2025, the Company had no outstanding borrowings under the ABL Credit Facility. Outstanding letters of credit under the ABL Credit Facility were $ 136.2 million and $ 104.1 million as of June 30, 2026 and December 31, 2025, respectively. Availability under the ABL Credit Facility was $ 413.3 million (including $ 142.9 million cash and cash equivalents) and $ 596.0 million (including $ 199.2 million cash and cash equivalents) as of June 30, 2026 and December 31, 2025, respectively, after giving effect to the borrowing base and the outstanding letters of credit. The Company incurred issuance costs of $ 6.3 million to obtain the ABL Credit Facility, which was capitalized within other noncurrent assets in the condensed consolidated balance sheets and amortized over the facility term using the straight-line method. Commitment fee and amortization of the deferred issuance costs were not material for the three and six months ended June 30, 2026 and 2025, respectively. DDTL Credit Facility In August 2024, the Company entered into the DDTL Credit Facility with Ayar, that may be used for working capital and general corporate purposes. The DDTL Credit Facility provides for a delayed draw term loan credit facility in an aggregate principal amount of $ 750.0 million and has a stated maturity date of August 4, 2029. Borrowings under the DDTL Credit Facility bear interest at the applicable interest rates specified in the credit agreement governing the DDTL Credit Facility. In November 2025, the Company increased the aggregate principal amount of the DDTL Credit Facility from $ 750.0 million to $ 1.98 billion. In April 2026, the Company borrowed $ 500.0 million under the DDTL Credit Facility. In April 2026, the Company also entered into the DDTL Amendment, pursuant to which the aggregate undrawn delayed commitments under the DDTL Credit Facility were increased by $ 500.0 million, such that, after giving effect to such increase, the aggregate sum of outstanding delayed draw term loans and aggregate undrawn commitments was increased to approximately $ 2.48 billion. The Company is required to pay a quarterly undrawn fee of 0.50 % per annum based on the unutilized portion of the DDTL Credit Facility. In July 2026, the Company borrowed an additional $ 800.0 million under the DDTL Credit Facility. The DDTL Credit Facility contains customary covenants that limit the ability of the Company and the ability of its restricted subsidiaries to, among other activities, pay dividends, incur debt, create liens and encumbrances, redeem or repurchase stock, dispose of certain assets, consummate acquisitions or other investments, prepay certain debt, engage in sale and leaseback transactions or consummate mergers and other fundamental changes. The DDTL Credit Facility included a minimum liquidity covenant, which was eliminated under the DDTL Amendment. The DDTL Amendment also removed the requirement that the Company fully utilize the borrowing availability under the ABL Credit Facility prior to making borrowings under the DDTL Credit Facility. As of June 30, 2026 and December 31, 2025, the Company was in compliance with applicable covenants under the DDTL Credit Facility. As of June 30, 2026 and December 31, 2025, the Company had outstanding borrowings of $ 500.0 million and nil , respectively, under the DDTL Credit Facility. The outstanding borrowings were recorded within debt, net of current portion in the condensed consolidated balance sheet. The interest rate on the outstanding borrowings was 9.54 % as of June 30, 2026. As of June 30, 2026 and December 31, 2025, availability under the DDTL credit facility was $ 1.98 billion. The Company recorded interest expense of $ 11.9 million during the three and six months ended June 30, 2026, and nil for the same periods in the prior year. 30 The Company incurred issuance costs of $ 6.2 million to obtain the DDTL Credit Facility during the year ended December 31, 2024, which was capitalized within other noncurrent assets in the condensed consolidated balance sheet and amortized over the facility term using the straight-line method. The Company incurred issuance costs of $ 9.2 million and $ 3.8 million to increase the aggregate delayed draw term commitment of the DDTL Credit Facility during the year ended December 31, 2025, and during the six months ended June 30, 2026, respectively. These costs were capitalized within other noncurrent assets in the condensed consolidated balance sheets. During the three and six months ended June 30, 2026, the Company reclassified $ 2.8 million of the issuance cost and recorded it as an adjustment to the principal amount of the $ 500.0 million borrowed in April 2026 within debt, net of current portion in the condensed consolidated balance sheet. The issuance cost recorded within other noncurrent assets and debt, net of current portion are amortized over the remaining term of the facility using the straight-line method. Commitment fee, amortization of the deferred issuance costs and amortization of the adjustment to the outstanding borrowings were $ 3.6 million and $ 7.0 million for the three and six months ended June 30, 2026, and were not material for the same periods in the prior year. NOTE 7 – REDEEMABLE CONVERTIBLE PREFERRED STOCK In March 2024, the Company sold 100,000 shares of the Series A Redeemable Convertible Preferred Stock to Ayar for an aggregate purchase price of $ 1.0 billion in a private placement. In August 2024, the Company sold 75,000 shares of the Series B Redeemable Convertible Preferred Stock to Ayar for an aggregate purchase price of $ 750.0 million in a private placement. On April 14, 2026, the Company entered into the Series C Subscription Agreement with Ayar. Pursuant to the Series C Subscription Agreement, Ayar agreed to purchase from the Company 55,000 shares of the Series C Redeemable Convertible Preferred Stock for an aggregate purchase price of $ 550.0 million in a private placement. Subsequently, on April 28, 2026, the Company issued the shares to Ayar pursuant to the Series C Subscription Agreement and received aggregate gross proceeds of $ 550.0 million. The Company determined that the Subscription Agreement was required to be accounted for at fair value between the execution date and the settlement date as it represented a contract to sell redeemable stock as further elaborated below. As a result, the Company recognized a gain of $ 142.2 million reflecting the change in fair value of the contract as measured upon settlement based on the difference between the fair value of the Series C Redeemable Convertible Preferred Stock at issuance versus the cash purchase price negotiated at fair value at contract inception, such that the Series C Redeemable Convertible Preferred Stock is initially recognized at fair value of $ 292.4 million on the issuance date. The valuation models and assumptions used to value the contract during this period are consistent with the models described below with respect to the valuation of the embedded derivative for the Series C Redeemable Convertible Preferred Stock. The shares of the Series A Redeemable Convertible Preferred Stock, the Series B Redeemable Convertible Preferred Stock and the Series C Redeemable Convertible Preferred Stock were issued pursuant to the Series A Certificate of Designations, the Series B Certificate of Designations and the Series C Certificate of Designations (the “Certificate of Designations”), respectively. Pursuant to the respective purchase agreements, Ayar has agreed, with certain exceptions, that without prior written consent of the Company, it will not sell or transfer the Redeemable Convertible Preferred Stock for the twelve months after the date of the closing of the respective private placement. Dividends: The Redeemable Convertible Preferred Stock ranks senior to the common stock with respect to dividends and distributions of assets upon the Company’s liquidation, dissolution or winding up. The Redeemable Convertible Preferred Stock has an initial value of $ 10,000 per share (the “Initial Value” and the Initial Value plus compounded and accrued dividends, the “Accrued Value”). Dividends on the Redeemable Convertible Preferred Stock are payable in the form of compounded cumulative dividends upon each share of the Redeemable Convertible Preferred Stock (paid-in-kind). Dividends accrue daily on the Initial Value (as increased for any compounded dividends previously compounded thereon) of each share of the Redeemable Convertible Preferred Stock at a rate of 9 % per annum and compound on the basis of quarterly dividend payment dates on each March 31, June 30, September 30 and December 31 of each year, commencing June 30, 2024 for the Series A Redeemable Convertible Preferred Stock, September 30, 2024 for the Series B Redeemable Convertible Preferred Stock and June 30, 2026 for the Series C Redeemable Convertible Preferred Stock. Liquidation Preference: Upon a liquidation, dissolution or winding up of the Company, each holder of shares of the Redeemable Convertible Preferred Stock (“Holder”) will be entitled to receive, with respect to each share of then-outstanding Redeemable Convertible Preferred Stock, out of the assets of the Company available for distribution to its stockholders an amount in cash equal to the greater of (a) an amount per share of the Redeemable Convertible Preferred Stock as of the date of such liquidation, dissolution or winding up equal to (i) the per share Accrued Value as of the relevant date multiplied by (ii) the relevant percentage (the product of (i) and (ii), the “Minimum Consideration”); and (b) the amount that such Holder would have received with respect to such share of the Redeemable Convertible Preferred Stock if all shares of the Redeemable Convertible Preferred Stock had been converted at their Accrued Value into shares of common stock on the business day immediately prior to the date of such liquidation, dissolution or winding up. As of June 30, 2026 and December 31, 2025, the liquidation preference of the Series A Redeemable Convertible Preferred Stock was $ 1,470.2 million and $ 1,350.4 million, respectively. As of June 30, 2026 and December 31, 2025, the liquidation preference of the Series B Redeemable Convertible Preferred Stock was $ 1,032.9 million and $ 949.2 million, respectively. As of June 30, 2026, the liquidation preference of the Series C Redeemable Convertible Preferred Stock was $ 566.9 million. 31 Voting Rights: Each Holder is entitled to the number of votes equal to the number of whole shares of common stock into which the aggregate shares of the Redeemable Convertible Preferred Stock held by such Holder are convertible on the record date for determining stockholders entitled to vote on any matter presented to the stockholders of the Company for their action or consideration at any meeting of stockholders and on which matter holders of the common stock shall be entitled to vote. Holders are entitled to notice of any meeting of stockholders and, except as otherwise provided in the Certificate of Designations or otherwise required by law, to vote together as a single class with the holders of the common stock and any other class or series of stock entitled to vote thereon. The voting power of Holders for Series A Redeemable Convertible Preferred Stock and Series B Redeemable Convertible Preferred Stock is subject to a voting cap per share equal to the quotient of the $ 10,000 Initial Value and the minimum price ($ 27.70 for the Series A Redeemable Convertible Preferred Stock and $ 31.20 for the Series B Redeemable Convertible Preferred Stock). The voting power of Holders for Series C Redeemable Convertible Preferred Stock is subject to a voting cap equal to 301.4993 votes per share. As long as at least 10 % of the aggregate number of shares issued on the respective initial issue date remain outstanding, and subject to certain other conditions, Holders are entitled to a separate class vote with respect to, among other things, amendments to the Company’s organizational documents that have an adverse effect on the Redeemable Convertible Preferred Stock, authorizations or issuances by the Company of capital stock of the Company that ranks senior or equal to the Redeemable Convertible Preferred Stock with respect to dividends or distributions on liquidation or the terms of which provide for cash dividends (other than the common stock), winding-up and dissolution, and decreases in the number of authorized shares of the Redeemable Convertible Preferred Stock. The Company also agreed that as long as Ayar owns at least 50 % of the shares issued on the respective initial issue date, the Company will comply with certain debt incurrence covenants in its Credit Agreement, (i) dated as of June 9, 2022, by and among the Company, as the Borrower Representative, the other Borrowers party thereto from time-to-time, the Lenders and Issuing Banks from time-to-time party thereto and Bank of America, N.A., as Administrative Agent, as amended, which agreement may be waived with the sole consent of Ayar (ii) dated as of August 4, 2024, by and among the Company, as the Borrower, the Lenders party thereto and Ayar, as Administrative Agent, as amended, amended and restated, modified or waived from time-to-time. Conversion: Each share of the Redeemable Convertible Preferred Stock is convertible, at the option of the respective Holder, from time-to-time after the initial issue date, and without the payment of additional consideration by the Holder, (a) at any time that the closing price per share of the common stock on the trading day immediately preceding the date on which the Holder delivers the relevant notice of conversion is at least $ 55.00 for Series A Redeemable Convertible Preferred Stock and Series B Redeemable Convertible Preferred Stock, and $ 16.30 for Series C Redeemable Convertible Preferred Stock (subject to certain adjustments), unless the Company otherwise consents to such conversion in its sole discretion, or (b) in all events during certain specified periods relating to a fundamental change or optional redemption by the Company, into such number of fully paid and non-assessable shares of common stock as is determined by dividing (i) the applicable Accrued Value as of the conversion date by (ii) the applicable conversion price in effect as of such conversion date, which shall initially be $ 35.9520 for the Series A Redeemable Convertible Preferred Stock, $ 43.7990 for the Series B Redeemable Convertible Preferred Stock and $ 10.8160 for the Series C Redeemable Convertible Preferred Stock, subject to customary anti-dilution adjustments, including in the event of any stock split, stock dividend, recapitalization or similar events (the “Conversion Price”). Mandatory Conversion: On or after the third anniversary of the initial issue date, if at any time (i) the daily VWAP of the common stock has been at least 200 % of the Conversion Price for at least twenty ( 20 ) trading days (whether or not consecutive) during any thirty ( 30 ) consecutive trading days (including the last day of such period) and (ii) certain common stock liquidity conditions are satisfied, the Company will have the right, exercisable at its election within fifteen ( 15 ) business days following completion of the applicable thirty ( 30 ) trading day period, to cause all or any portion of the Redeemable Convertible Preferred Stock to convert into a number of fully paid and non-assessable shares of common stock, as determined by dividing (i) the applicable Accrued Value as of the conversion date by (ii) the Conversion Price in effect as of such conversion date. The Company will be required to pay an additional amount per share of the Redeemable Convertible Preferred Stock payable in cash, shares of common stock valued based on a five-day average daily VWAP or a combination thereof in respect of such conversion equal to the greater of (x) the difference between (i) the Minimum Consideration and (ii) the value of the shares of common stock delivered upon mandatory conversion thereof and (y) zero. Fundamental Change: Upon a fundamental change, the Holders will be entitled, on the fundamental change repurchase date specified by the Company, to receive an amount equal to the greater of (a) the Minimum Consideration and (b) an amount equal to the value that such Holder would have received if it had converted its shares of the Redeemable Convertible Preferred Stock into shares of common stock on the business day immediately before the fundamental change repurchase date. The fundamental change repurchase price may be paid in cash, shares of common stock (or other securities to be received by a holder of common stock in such fundamental change) valued based on a five-day average daily VWAP (with the number of shares of common stock rounded up to the nearest whole share), or a combination thereof, at the Company’s election. The Company may not elect to deliver shares of its common stock (or other securities to be received by a holder of common stock in such fundamental change) in partial or full satisfaction of the fundamental change repurchase price, if certain common stock liquidity conditions are not satisfied. 32 Optional Redemption: On or after the fifth anniversary of the initial issue date, the Company may redeem all or any portion of the Redeemable Convertible Preferred Stock at a redemption price per share equal to the greater of (a) the Minimum Consideration and (b) an amount equal to the value (calculated based on a twenty ( 20 )-day average daily VWAP) of the number of shares of common stock if it had converted its shares of the Redeemable Convertible Preferred Stock into shares of common stock as of the redemption date. Such redemption price may be paid in cash, shares of common stock valued based on a twenty ( 20 )-day average daily VWAP, or a combination thereof, at the Company’s election. The Company may not pay any portion of such redemption price in shares of common stock if the common stock liquidity conditions are not satisfied. While the Redeemable Convertible Preferred Stock is callable after five years at the Company’s option, the Redeemable Convertible Preferred Stock is considered redeemable at the option of Ayar and was classified as mezzanine equity, because it is the majority shareholder of the Company. The Company accretes the Redeemable Convertible Preferred Stock to its redemption value, which is greater of (a) the Minimum Consideration and (b) an amount equal to the value that such Holder would have received if it had converted its shares of the Redeemable Convertible Preferred Stock into shares of common stock as of the Redemption Date. In certain circumstances, the redemption price may vary based on changes in stock price, in which case the Company recognizes changes in the redemption value immediately as they occur and adjusts the carrying value of the security to equal the then current maximum redemption value at the end of each reporting period. The Company recorded accretion of $ 67.3 million and $ 129.8 million related to the Series A Redeemable Convertible Preferred Stock during the three and six months ended June 30, 2026, respectively, and $ 129.2 million and $ 354.5 million for the same periods in the prior year, respectively. The Company recorded accretion of $ 45.2 million and $ 88.7 million related to the Series B Redeemable Convertible Preferred Stock during the three and six months ended June 30, 2026, respectively, and $ 70.6 million and $ 210.2 million for the same periods in the prior year, respectively. The Company recorded accretion of $ 111.9 million related to the Series C Redeemable Convertible Preferred Stock during the three and six months ended June 30, 2026. Accretion of the Redeemable Convertible Preferred Stock was reflected as adjustments to additional paid-in capital in the condensed consolidated balance sheets as of June 30, 2026 and December 31, 2025. The carrying value of the Series A Redeemable Convertible Preferred Stock was $ 1,469.5 million and $ 1,339.6 million as of June 30, 2026 and December 31, 2025, respectively. The carrying value of the Series B Redeemable Convertible Preferred Stock was $ 1,032.5 million and $ 943.8 million as of June 30, 2026 and December 31, 2025, respectively. The carrying value of the Series C Redeemable Convertible Preferred Stock was $ 404.3 million as of June 30, 2026. The Company assessed the above features to determine whether any features are required to be bifurcated and separately accounted for as an embedded feature. The Company concluded that the conversion features, inclusive of all settlement outcomes where the pay-off is indexed to the if-converted value, meets all the requirements to be separately accounted for as a bifurcated derivative. As a result, the Company bifurcated the Redeemable Convertible Preferred Stock between (i) the host contracts which are accounted for within mezzanine equity as described above, and (ii) the bifurcated derivative liabilities related to the conversion features. The proceeds from issuance were first allocated to the fair value of the bifurcated derivatives with the residual being allocated to the host contracts. The bifurcated derivatives are remeasured to fair value at each reporting period with changes in fair value recorded in the condensed consolidated statement of operations and comprehensi ve loss . As of June 30, 2026 and December 31, 2025, the Company remeasured the derivative liabilities for the Redeemable Convertible Preferred Stock to fair value of $ 163.7 million and $ 16.2 million, comprising of $ 0.7 million and $ 10.8 million related to Series A Redeemable Convertible Preferred Stock, $ 0.4 million and $ 5.4 million related to Series B Redeemable Convertible Preferred Stock and $ 162.6 million and nil related to Series C Redeemable Convertible Preferred Stock, respectively. The Company recognized losses of $ 39.4 million and $ 32.0 million for the three and six months ended June 30, 2026, respectively, and gains of $ 111.5 million and $ 393.2 million for the same periods in the prior year, respectively, in change in fair value of derivative liabilities and subscription agreements associated with redeemable convertible preferred stock (related party) in the condensed consolidated statements of operations and comprehensive loss. The Company estimated the fair value of the derivative liabilities using a binomial lattice model with the volatility, credit spread, and term as significant unobservable inputs. Assumptions used in the valuation also take into account the contractual terms as well as the quoted price of the Company’s common stock in an active market. Significant changes in any of those inputs in isolation would result in significant changes to the fair value measurement. 33 The level 3 fair value inputs used in the valuation of the derivative liabilities associated with the Redeemable Convertible Preferred Stock were as follows: June 30, 2026 December 31, 2025 Series A Derivative Liability Series B Derivative Liability Series C Derivative Liability Series A Derivative Liability Series B Derivative Liability Volatility 40.0 % 40.0 % 40.0 % 40.0 % 40.0 % Credit spread 34.5 % 34.5 % 34.5 % 23.9 % 23.9 % Stock price $ 6.69 $ 6.69 $ 6.69 $ 10.57 $ 10.57 Term (in years) 2.7 3.1 4.8 3.2 3.6 Risk-free rate 4.1 % 4.1 % 4.1 % 3.5 % 3.6 % NOTE 8 – STOCKHOLDERS’ EQUITY (DEFICIT) Common Stock In July 2025, the Company entered into a Vehicle Production Agreement (the “First VPA”) with Uber and the 2025 Subscription Agreement with SMB, a subsidiary of Uber. Under the First VPA, Uber and its designated fleet operators have agreed to purchase a minimum commitment of 20,000 Lucid Gravity vehicles that have been modified to include certain autonomous driving hardware and other features (the “Lucid Gravity Plus vehicles”). Under the 2025 Subscription Agreement, the Company agreed to issue and SMB agreed to purchase, in a private placement, the Company’s common stock equal to (i) $ 300.0 million in cash divided by (ii) an amount equal to the arithmetic average of the daily volume-weighted average price of the common stock over a period of 30 consecutive trading days ending on, and including, July 15, 2025. In September 2025, the Company and SMB entered into an amendment to the 2025 Subscription Agreement to reflect the adjustments made to the number of placement shares and purchase price per placement share therein due to the Reverse Stock Split. The Company also consummated the private placement of shares to SMB and issued 13,715,121 shares at a price per share of $ 21.87 , for aggregate net proceeds of $ 299.7 million after deducting issuance costs of $ 0.3 million in September 2025. In April 2026, the Company entered into a Second Vehicle Production Agreement (as amended by the Amendment No. 1 to the Second Vehicle Production Agreement dated July 10, 2026, the “Second VPA”, together with the First VPA, the “VPAs”) with Uber and the 2026 Subscription Agreement with SMB. Under the Second VPA, Uber and its designated fleet operators have agreed to purchase a minimum commitment (the “Minimum Quantity Guarantee”) of 25,000 Lucid Midsize platform vehicles for use as robotaxis that have been modified to include certain autonomous driving hardware and other features (the “Lucid Midsize Plus vehicles”) over a six-year period following the start of production. Start of production of Lucid Midsize Plus vehicles is targeted to occur in late 2028. Pursuant to the offset provisions under the First VPA the Company entered into with Uber in July 2025, the Minimum Quantity Guarantee increased the aggregate number of Lucid Gravity Plus and Lucid Midsize Plus vehicles Uber is committed to purchase to at least 35,000 units. Under the 2026 Subscription Agreement, the Company agreed to issue and SMB agreed to purchase, in a private placement, $ 200.0 million of its common stock. The Company also consummated the private placement of shares to SMB and issued 24,038,462 shares at a price per share of $ 8.32 , for aggregate net proceeds of $ 199.8 million after deducting issuance costs of $ 0.2 million in April 2026. The shares of common stock sold to SMB pursuant to the 2025 Subscription Agreement and the 2026 Subscription Agreement were sold based upon reliance on the exemption from registration provided in Section 4(a)(2) of the Securities Act. SMB may not transfer the shares of common stock acquired under the 2025 Subscription Agreement and the 2026 Subscription Agreement for a period of 18 months after the closing of the private placement. In April 2026, the Company entered into the 2026 Underwriting Agreement with the Underwriter, under which the Underwriter agreed to purchase 36,057,692 shares of the Company’s common stock. In April 2026, the Company issued the shares to the Underwriter pursuant to the 2026 Underwriting Agreement at a price per share of $ 8.11 , and received aggregate net proceeds of $ 291.5 million after deducting issuance costs of $ 1.0 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. Treasury Stock During the year ended December 31, 2021, the Company repurchased an aggregate of 85,782 shares of its common stock, including 71,274 shares from certain employees and 14,508 shares from board of directors of the Company’s predecessor, Atieva, Inc. at $ 241.50 per share. No common stock was repurchased during the three and six months ended June 30, 2026 and 2025. 34 Common Stock Reserved for Issuance The Company’s common stock reserved for future issuances as of June 30, 2026 was as follows: June 30, 2026 Private Placement Warrants to purchase common stock 4,435,000 Stock options outstanding 2,617,550 Restricted stock units outstanding 16,437,935 Shares available for future grants under equity plans 23,118,397 If-converted common shares from 2026 Notes 372,950 If-converted common shares from 2030 Notes 36,666,630 If-converted common shares from 2031 Notes 46,846,313 If-converted common shares from Series A redeemable convertible preferred stock 34,006,758 If-converted common shares from Series B redeemable convertible preferred stock 20,239,798 If-converted common shares from Series C redeemable convertible preferred stock 51,651,489 Total shares of common stock reserved 236,392,820 NOTE 9 – STOCK-BASED AWARDS Stock Options A summary of stock option activity, excluding performance-based stock options (“PSOs”), for the six months ended June 30, 2026 was as follows: Outstanding Options Number of Options Weighted Average Exercise Price Weighted-Average Remaining Contractual Term Intrinsic Value (in thousands) Balance as of December 31, 2025 2,030,874 $ 19.09 3.98 $ 2,918 Options exercised ( 311,391 ) 8.91 Options canceled/forfeited ( 101,933 ) 45.03 Balance as of June 30, 2026 1,617,550 $ 19.41 3.43 $ 11 Options vested and exercisable as of June 30, 2026 1,556,611 $ 17.71 3.39 $ 11 As of June 30, 2026, unrecognized stock-based compensation cost related to outstanding unvested stock options, excluding PSOs, that are expected to vest was $ 1.1 million, and is expected to be recognized over a weighted-average period of 1.0 year. In April 2026, the Company granted 1,000,000 shares of PSOs to its current CEO. These PSOs have a contractual term of 10 years from the date of grant. These awards are subject to both market capitalization targets and time-based vesting conditions during a 5-year performance period commencing on the date of grant, and are subject to the CEO’s continued employment with the Company. As of June 30, 2026, none of the market capitalization targets or time-based vesting conditions had been achieved. The related stock-based compensation expense for the three and six months ended June 30, 2026 was immaterial . As of June 30, 2026, unrecognized stock-based compensation cost related to these awards was $ 4.6 million, which is expected to be recognized over a weighted-average period of 2.9 years. RSUs A summary of RSUs activity for the six months ended June 30, 2026 was as follows: Restricted Stock Units Time-Based Shares Performance-Based Shares Total Shares Weighted-Average Grant-Date Fair Value Balance as of December 31, 2025 17,337,857 2,645,726 19,983,583 $ 27.86 Granted 5,114,901 43,504 5,158,405 $ 7.30 Vested ( 4,100,489 ) ( 569,025 ) ( 4,669,514 ) $ 30.17 Canceled/Forfeited ( 3,128,662 ) ( 905,877 ) ( 4,034,539 ) $ 24.87 Balance as of June 30, 2026 15,223,607 1,214,328 16,437,935 $ 21.49 35 As of June 30, 2026, unrecognized stock-based compensation cost related to outstanding unvested time-based RSUs that are expected to vest was $ 249.6 million, which is expected to be recognized over a weighted-average period of 1.8 years. The Company granted 1,383,475 shares of the time-based RSUs to the former CEO that were scheduled to vest in sixteen equal quarterly installments, beginning on December 5, 2021, and were subject to continuous employment. The Company recognized compensation expense for these time-based RSUs on a graded vesting schedule over the requisite vesting period. The Company withheld approximately 47,712 and 95,424 shares of common stock for the three and six months ended June 30, 2025, by net settlement to meet the related tax withholding requirements related to the former CEO’s time-based RSUs. In February 2025, the Company announced the former CEO’s resignation and transition. In connection with this transition, the Company recorded a reversal of $ 41.6 million related to previously recognized stock-based compensation expenses for his unvested time-based RSUs. As of December 31, 2025, there were no unrecognized stock-based compensation expenses related to the former CEO’s time-based RSUs. The Company granted performance-based RSUs to certain employees and they are subject to (i) corporate performance conditions and individual performance and (ii) a service condition that is generally satisfied 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 three and six months ended June 30, 2026, the Company recorded a net stock-based compensation expense reversal of $ 1.9 million and stock-based compensation expenses of $ 3.7 million, respectively, related to these performance-based RSUs. During the three and six months ended June 30, 2025, the Company recorded stock-based compensation expenses of $ 3.5 million and $ 12.4 million, respectively. As of June 30, 2026, the unamortized expense for the performance-based RSUs was $ 5.3 million, which will be recognized over a weighted-average period of 0.9 years primarily contingent upon realization of the corporate performance conditions. ESPP The ESPP authorizes the issuance of shares of common stock pursuant to purchase rights granted to employees. The plan provides for 24 -month offering periods beginning in December and June of each year, and each offering period will consist of four six-month purchase periods. The purchase price for each share purchased during an offering period will be the lesser of 85 % of the fair market value of the share on the purchase date or 85 % of the fair market value of the share on the offering date. As of June 30, 2026, unrecognized stock-based compensation cost related to the ESPP was $ 22.4 million, which is expected to be recognized over a weighted-average period of 1.9 years. Stock-based Compensation Expense Total employee and nonemployee stock-based compensation expense for the three and six months ended June 30, 2026 and 2025, was classified in the condensed consolidated statements of operations and comprehensive loss as follows (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 Cost of revenue $ 603 $ 582 $ 1,624 $ 1,704 Research and development 25,584 34,195 63,269 69,016 Selling, general and administrative 15,761 21,542 39,444 13,114 Workforce reduction charges 4,661 — 3,302 — Total $ 46,609 $ 56,319 $ 107,639 $ 83,834 The Company capitalized stock-based compensation expenses of $ 8.0 million and $ 19.1 million for the three and six months ended June 30, 2026, respectively, and $ 8.5 million and $ 18.3 million for the same periods in the prior year, respectively, primarily as part of the cost of inventory. NOTE 10 – LEASES 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. 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 contained a purchase option which the Company was reasonably certain to exercise. As of December 31, 2025, assets and liabilities associated with the finance lease were $ 79.3 million and $ 79.4 million, respectively. During the six months ended June 30, 2026, the Company elected not to exercise the purchase option. As a result, the Company remeasured the lease‑related assets and liabilities, and the remaining balances were immaterial as of June 30, 2026. 36 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. The sale of the land and subsequent lease did not result in change in the transfer of control of the land; therefore, the sale-leaseback transaction is accounted for as a failed sale and leaseback financing obligation. The Company recorded $ 31.7 million of sales proceeds received as a financial liability within other current liabilities in the condensed consolidated balance sheets as of June 30, 2026 and December 31, 2025. The balances for the operating and finance leases where the Company is the lessee are presented as follows within the Company’s condensed consolidated balance sheets (in thousands): June 30, 2026 December 31, 2025 Operating leases: Right-of-use assets $ 249,019 $ 241,974 Other current liabilities $ 67,198 $ 64,171 Other long-term liabilities 228,041 225,434 Total operating lease liabilities $ 295,239 $ 289,605 Finance leases: Property, plant and equipment, net (1) $ 102,161 $ 185,721 Total finance lease assets $ 102,161 $ 185,721 Finance lease liabilities, current portion $ 5,045 $ 84,222 Finance lease liabilities, net of current portion 102,685 104,559 Total finance lease liabilities (1) $ 107,730 $ 188,781 (1) As of June 30, 2026 and December 31, 2025, the Company recorded finance lease assets of $ 92.7 million and $ 95.3 million, respectively, and finance lease liabilities of $ 98.8 million and $ 98.9 million, respectively, related to certain facility leases assumed in connection with the asset acquisition from Nikola Corporation. The components of lease expense were as follows within the Company’s condensed consolidated statements of operations and comprehensive loss (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 Operating lease expense: Operating lease expense (1) $ 26,669 $ 19,217 $ 49,989 $ 35,698 Variable lease expense $ 588 $ 607 $ 1,181 $ 1,177 Finance lease expense: Amortization of leased assets $ 2,423 $ 1,745 $ 4,837 $ 2,294 Interest on lease liabilities 3,278 2,746 6,569 3,935 Total finance lease expense $ 5,701 $ 4,491 $ 11,406 $ 6,229 Total lease expense $ 32,958 $ 24,315 $ 62,576 $ 43,104 (1) Excluded short-term leases, which were not material. 37 Other information related to leases where the Company is the lessee was as follows: June 30, 2026 December 31, 2025 Weighted-average remaining lease term (in years): Operating leases 5.2 5.2 Finance leases 16.4 9.9 Weighted-average discount rate: Operating leases 11.77 % 11.50 % Finance leases 8.03 % 7.33 % As of June 30, 2026, the maturities of the Company’s operating and finance lease liabilities (excluding short-term leases) were as follows (in thousands): Operating Leases Finance Leases 2026 (remainder of the year) $ 48,733 $ 6,592 2027 86,930 12,855 2028 71,888 10,972 2029 60,086 8,621 2030 47,379 8,752 2031 25,437 8,915 Thereafter 62,071 170,750 Total minimum lease payments 402,524 227,457 Less: Interest ( 107,285 ) ( 119,727 ) Present value of lease obligations 295,239 107,730 Less: Current portion ( 67,198 ) ( 5,045 ) Long-term portion of lease obligations $ 228,041 $ 102,685 As of June 30, 2026, the Company entered into additional leases for facilities that have not yet commenced with undiscounted future lease payments of $ 25.4 million. The leases are expected to commence over the next twelve months. NOTE 11 - COMMITMENTS AND CONTINGENCIES Contractual Obligations As of June 30, 2026 and December 31, 2025, the Company had $ 0.7 billion and $ 0.9 billion in commitments related to AMP-1 and AMP-2 plant and equipment, respectively. These commitments represent future expected payments on open purchase orders entered into as of June 30, 2026 and December 31, 2025. 38 The Company’s non-cancellable long-term commitments primarily related to certain inventory component purchases. As of June 30, 2026, pursuant to the terms of agreements the Company entered into in connection with the supply of lithium-ion battery cells, the Company had remaining minimum purchase commitments of an aggregate of approximately $ 2.47 billion, calculated using the current base prices, which could vary period-to-period primarily as a result of changes in raw material indexes. The estimated future payments having a remaining term in excess of one year as of June 30, 2026 were as follows (in thousands): Years ended December 31, Minimum Purchase Commitment 2026 (remainder of the year) $ 154,621 2027 414,673 2028 494,859 2029 488,529 2030 494,959 Thereafter 498,089 Total $ 2,545,730 Legal Matters From time-to-time, the Company may become subject to legal proceedings, claims and litigation arising in the ordinary course of business. Some of these claims, lawsuits and other proceedings may involve highly complex issues that are subject to substantial uncertainties, and could result in damages, fines, penalties, non-monetary sanctions or relief. In re Lucid Group, Inc. Securities Litigation On April 1, 2022, and May 31, 2022, two alleged shareholders filed putative class actions under the federal securities laws in the United States District Court for the Northern District of California against the Company and certain officers of the Company relating to alleged statements, updated projections and guidance provided from late 2021 to early 2022. The two matters were consolidated as In re Lucid Group, Inc. Securities Litigation. The complaint alleges that the Company and its former CEO made false or misleading statements about the Company’s 2022 production targets in violation of Sections 10(b) and 20(a) of the Exchange Act. Defendants deny these allegations and are vigorously defending the case. At this point in the matter, we are unable to predict the outcome or potential exposure. Nine purported shareholders have filed derivative cases in various courts putatively on behalf of the Company against certain of the Company’s current and former directors based on allegations similar to those in the In re Lucid Group, Inc. Securities Litigation action. These cases raise claims such as a breach of fiduciary duty, unjust enrichment, waste of corporate assets, and aiding and abetting a breach of fiduciary duty. On July 11, 2022, a derivative case raising such claims was filed in the Superior Court of California, Alameda County, and is currently stayed. Between September 2024 and December 2024, three other derivative lawsuits were filed in the Delaware Court of Chancery raising similar claims. Two were consolidated into a single action. On January 29, 2025, February 7, 2025 and August 6, 2025, three other derivative lawsuits were filed in the Northern District of California also raising similar claims. The court has granted the parties stipulation to consolidate and stay the cases. Between February 28, 2025, and March 7, 2025, two other derivative lawsuits raising similar claims were also filed in the United States District Court for the District of Delaware. They were consolidated into a single action and are currently stayed. Eke v. Lucid Group, Inc., et al. On May 29, 2026, a shareholder filed a putative class action alleging claims under Sections 10(b) and 20(a) of the Exchange Act and Rule 10b-5 against the Company, the Company’s then Interim Chief Executive Officer Marc Winterhoff, and Chief Financial Officer Taoufiq Boussaid (Eke v. Lucid Group Inc. et al., U.S. District Court N.D. Cal., Case No. 3:26-cv-05128). The complaint alleges that Defendants made false or misleading statements about and/or failed to disclose, among other things, that a supplier quality issue had significantly disrupted deliveries of the Lucid Gravity. Defendants deny these allegations and plan to vigorously defend the case. At this point in the matter, we are unable to predict the outcome or potential exposure. On June 16, 2026, a shareholder filed a derivative action on behalf of the Company against certain current and former directors and officers alleging claims substantially similar to those in Eke v. Lucid Group, Inc. et al . The case alleges claims such as a breach of fiduciary duty, unjust enrichment, and waste of corporate assets. Defendants deny these allegations and plan to vigorously defend the case. At this point in the matter, we are unable to predict the outcome or potential exposure. 39 The Company is evaluating certain loss contingencies arising from supplier contract claims that could result in additional obligations of the Company. As of June 30, 2026, the Company had recorded an immaterial accrual for losses deemed probable and reasonably estimable. While the ultimate outcome of these matters remains uncertain, it is reasonably possible that the Company may incur losses in excess of the amounts accrued. The Company will continue to assess these contingencies as additional information becomes available and will update its estimates, as appropriate, in future reporting periods. While we have registered and applied for trademarks in an effort to protect our brand and goodwill with customers, competitors or other third parties have previously opposed, currently oppose, and may continue to 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 be unable to submit specimens of use by the applicable deadline to perfect such trademark rights. 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, 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. The maximum potential amount of future payments the Company could be required to make under these indemnification provisions is indeterminable. 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, utilities infrastructure and other agreements that require securitization. The indemnification obligations were $ 174.5 million and $ 130.9 million as of June 30, 2026 and December 31, 2025, respectively, for which no liabilities are recorded in the condensed consolidated balance sheets. NOTE 12 - INCOME TAXES The Compa ny’s provision for (benefit from) income taxes for interim periods is determined using its effective tax rate that arise during the period. The Company’s quarterly tax provision is subject to variation due to several factors, including variability in pre-tax income (or loss), the mix of jurisdictions to which such income relates, changes in how the Company does business, the valuation allowance against deferred tax assets, and tax law developments. The Company’s effective tax rate was ( 0.1 )% for the three and six months ended June 30, 2026, and 0.4 % for the same periods in the prior year, due to minimal profits in foreign jurisdictions and U.S. losses for which no benefit will be realized. On July 4, 2025, the OBBBA was signed into law, introducing significant changes to the U.S. federal income tax code. The OBBBA included provisions that allow for the immediate expensing of domestic research and development expenses and certain capital expenditures, as well as other changes related to the U.S. taxation of profits derived from foreign operations. The Company elected to fully amortize its previously capitalized domestic research and development expenses. Due to the Company’s full valuation allowance on its U.S. deferred tax assets, the net tax impact of the legislation is immaterial. 40 NOTE 13 - NET LOSS PER SHARE Basic and diluted net loss per share attributable to common stockholders are calculated as follows (in thousands, except share and per share amounts): Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 Net loss $ ( 1,034,851 ) $ ( 539,432 ) $ ( 2,063,195 ) $ ( 905,603 ) Accretion of redeemable convertible preferred stock (related party) ( 224,425 ) ( 199,823 ) ( 330,387 ) ( 564,748 ) Net loss attributable to common stockholders, basic $ ( 1,259,276 ) $ ( 739,255 ) $ ( 2,393,582 ) $ ( 1,470,351 ) Interest expense on 2026 Notes — 309 — 4,283 Gain on extinguishment of debt — ( 116,360 ) — ( 116,360 ) Net loss attributable to common stockholders, diluted $ ( 1,259,276 ) $ ( 855,306 ) $ ( 2,393,582 ) $ ( 1,582,428 ) Weighted-average shares outstanding, basic 382,098,609 305,640,483 355,340,787 304,641,184 Dilutive effect of 2026 Notes, using if-converted method — 147,789 — 1,029,624 Weighted-average shares outstanding, diluted 382,098,609 305,788,272 355,340,787 305,670,808 Net loss per share: Basic $ ( 3.30 ) $ ( 2.42 ) $ ( 6.74 ) $ ( 4.83 ) Diluted $ ( 3.30 ) $ ( 2.80 ) $ ( 6.74 ) $ ( 5.18 ) 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: June 30, Excluded Securities 2026 2025 Private Placement Warrants to purchase common stock 4,435,000 4,435,000 Options outstanding to purchase common stock 1,617,550 2,207,319 RSUs outstanding 15,486,506 8,640,651 Employee stock purchase plan 5,407,704 2,296,613 If-converted common shares from 2026 Notes 372,950 1,752,521 If-converted common shares from 2030 Notes 36,666,630 36,666,663 If-converted common shares from 2031 Notes 46,846,313 — If-converted common shares from Series A redeemable convertible preferred stock 34,006,758 31,110,856 If-converted common shares from Series B redeemable convertible preferred stock 20,239,798 18,516,244 If-converted common shares from Series C redeemable convertible preferred stock 51,651,489 — Total 216,730,698 105,625,867 The Capped Call Transactions were also excluded from the computation of diluted net loss per share as they would be anti-dilutive. As of June 30, 2026, 1,000,000 shares of common stock equivalents related to stock options were excluded from the anti-dilutive table above. In addition, 951,429 and 828,090 shares of common stock equivalents related to RSUs were excluded from the anti-dilutive table above as of June 30, 2026 and 2025, respectively. The underlying shares associated with these stock options and RSUs remain contingently issuable because the applicable market or corporate performance vesting conditions had not been satisfied as of June 30, 2026 and 2025. NOTE 14 - EMPLOYEE BENEFIT PLAN The Company has a 401(k) savings plan (the “401(k) Plan”) that qualifies as a deferred salary arrangement under Section 401(k) of the Internal Revenue Code. Under the 401(k) Plan, participating employees may elect to contribute up to 100 % of their eligible compensation, subject to certain limitations. The 401(k) Plan provides for a discretionary employer-matching contribution. The matching contribution expense under the Company’s 401(k) Plan was not material for the three and six months ended June 30, 2026 and 2025. 41 NOTE 15 - RELATED PARTY TRANSACTIONS Leases In February 2022, the Company entered into a lease agreement with KAEC, a related party of the 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 2047. The right-of-use asset related to this lease was $ 3.8 million and $ 4.0 million as of June 30, 2026 and December 31, 2025, respectively. The lease liability was $ 6.7 million and $ 6.5 million as of June 30, 2026 and December 31, 2025, respectively. The right-of-use asset and lease liability were recorded in right-of-use assets and other long-term liabilities in the condensed consolidated balance sheets, respectively. The lease expense recorded for the three and six months ended June 30, 2026 and 2025 was immaterial. In July 2023, the Company entered into a lease agreement with King Abdullah Financial District Development and Management Company, a subsidiary of the 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 2029. The right-of-use asset related to this lease was $ 1.5 million and $ 1.7 million as of June 30, 2026 and December 31, 2025, respectively. The lease liability was $ 2.5 million and $ 2.4 million as of June 30, 2026 and December 31, 2025, respectively. The right-of-use asset and lease liability were recorded in right-of-use assets and primarily in other long-term liabilities in the condensed consolidated balance sheets, respectively. The lease expense recorded for the three and six months ended June 30, 2026 and 2025 was immaterial. SIDF Loan Agreement In February 2022, Lucid LLC entered into the SIDF Loan Agreement with the SIDF, a related party of the PIF, which is an affiliate of Ayar. Under the SIDF Loan Agreement, SIDF has committed to provide the SIDF Loans to Lucid LLC in an aggregate principal amount of up to SAR 5.19 billion (approximately $ 1.4 billion); provided that SIDF may reduce the availability of SIDF Loans under the facility in certain circumstances. See Note 6 “Debt” for more information. MISA Agreements In February 2022, Lucid LLC entered into agreements with MISA, a related party of the PIF, which is an affiliate of Ayar, pursuant to which MISA has agreed to provide economic support for certain capital expenditures in connection with Lucid LLC’s ongoing design and construction of AMP-2. The support by MISA is subject to Lucid LLC’s completion of certain milestones related to the construction and operation of AMP-2. Following the commencement of construction, if operations at the plant do not commence within 30 months, or if the agreed scope of operations is not attained within 55 months, MISA may suspend availability of subsequent support. Pursuant to the agreements, MISA has the right to require Lucid LLC to transfer the ownership of AMP-2 to MISA, at the fair market value thereof, reduced by an amortized value of the support provided in the event of customary events of default including abandonment or material and chronically low utilization of AMP-2. 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 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. As of December 31, 2024, the Company recorded $ 97.5 million as a deduction in calculating the carrying amount of the related assets in the consolidated balance sheet. During the year ended December 31, 2025 and three and six months ended June 30, 2026, there were no further deductions to the carrying value of the related assets in the condensed consolidated balance sheets. There were no unfulfilled conditions and contingencies attached to the payments received. GIB Facility Agreement In April 2022, Lucid LLC entered into revolving credit facilities with GIB in an aggregate principal amount of SAR 1.0 billion (approximately $ 266.1 million). In February 2025, Lucid LLC entered into the 2025 GIB Credit Facility to increase the credit facility aggregate principal to SAR 1.9 billion (approximately $ 505.7 million). See Note 6 “Debt” for more information. Construction Service Contract Lucid LLC entered into agreements with Al Bawani Company Limited (“Al Bawani”), an affiliate of the 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 to date under these agreements were SAR 2,563.6 million (approximately $ 682.4 million) and SAR 2,147.8 million (approximately $ 572.7 million) as of June 30, 2026 and December 31, 2025, respectively. Amounts due to Al Bawani under these agreements was SAR 280.8 million (approximately $ 74.8 million) and SAR 306.0 million (approximately $ 81.6 million) as of June 30, 2026 and December 31, 2025, respectively, which was primarily recorded within other current liabilities in the condensed consolidated balance sheets. 42 Subscription Agreements In March 2024, the Company entered into the Series A Subscription Agreement with Ayar, pursuant to which Ayar agreed to purchase from the Company 100,000 shares of its Series A Redeemable Convertible Preferred Stock for an aggregate purchase price of $ 1.0 billion in a private placement. Subsequently, in March 2024, the Company issued the shares to Ayar pursuant to the Series A Subscription Agreement and received aggregate net proceeds of $ 997.6 million after deducting issuance cost of $ 2.4 million. In August 2024, the Company entered into the Series B Subscription Agreement with Ayar, pursuant to which Ayar agreed to purchase from the Company 75,000 shares of its Series B Redeemable Convertible Preferred Stock for an aggregate purchase price of $ 750.0 million in a private placement. Subsequently, in August 2024, the Company issued the shares to Ayar pursuant to the Series B Subscription Agreement and received aggregate net proceeds of $ 749.4 million after deducting issuance costs of $ 0.6 million. On April 14, 2026, the Company entered into the Series C Subscription Agreement with Ayar, pursuant to which Ayar agreed to purchase from the Company 55,000 shares of its Series C Redeemable Convertible Preferred Stock for an aggregate purchase price of $ 550.0 million in a private placement. Subsequently, on April 28, 2026, the Company issued the shares to Ayar pursuant to the Series C Subscription Agreement and received aggregate net proceeds of $ 548.9 million after deducting issuance costs of $ 1.1 million. See Note 7 “Redeemable Convertible Preferred Stock” for more information. In October 2024, the Company entered into the 2024 Subscription Agreement, pursuant to which Ayar agreed to purchase from the Company 37,471,793 shares of common stock in a private placement. In addition, Ayar agreed to purchase an additional 2,147,045 shares of common stock. As of October 31, 2024, the Company consummated the private placement of shares to Ayar pursuant to the 2024 Subscription Agreement, at a price per share of $ 25.91 , for aggregate net proceeds of $ 1,025.7 million after deducting issuance costs of $ 0.8 million. Common stock acquired by Ayar under the 2024 Subscription Agreement, the Redeemable Convertible Preferred Stock acquired by Ayar under the Series A Subscription Agreement, the Series B Subscription Agreement and the Series C Subscription Agreement, and the common stock issuable upon conversion thereof are subject to the Investor Rights Agreement, which governs the registration for resale of such common stock and the Redeemable Convertible Preferred Stock. Human Resources Development Fund (“HRDF”) Joint Cooperation Agreements In March 2023 and July 2025, Lucid LLC entered into joint cooperation agreements with HRDF, a related party of the PIF, which is an affiliate of Ayar. Pursuant to the agreements, Lucid LLC will train and develop local personnel in Saudi Arabia, and HRDF agreed to reimburse the Company training related costs in aggregate maximum amounts of SAR 29.3 million (approximately $ 7.8 million) and SAR 24.7 million (approximately $ 6.6 million), respectively. The Company received payments of SAR 10.9 million (approximately $ 2.9 million) in cash during the years ended December 31, 2025 and 2024. Payments received during the three and six months ended June 30, 2026 were immaterial . The deferred liability was nil as of June 30, 2026 and December 31, 2025, and the Company recorded the remaining deferred liability balance as a deduction to operating expenses in the condensed consolidated statement of operations and comprehensive loss. The deduction recorded to operating expenses in the condensed consolidated statement of operations and comprehensive loss was not material for the three and six months ended June 30, 2026 and 2025. EV Purchase Agreement In August 2023, Lucid LLC entered into the EV Purchase Agreement with the Government of Saudi Arabia, a related party of the 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 any vehicles that Lucid LLC fails to deliver within six months from the date of the applicable purchase order. The Purchaser also has sole and absolute discretion to decide whether to exercise the option to purchase the additional 50,000 vehicles. The Company recognized net vehicle sales amount of SAR 361.5 million (approximately $ 96.2 million) and SAR 505.5 million (approximately $ 134.6 million) during the three and six months ended June 30, 2026, respectively, and SAR 113.5 million (approximately $ 30.2 million) and SAR 132.6 million (approximately $ 35.3 million) during the same periods in the prior year, respectively. The deferred revenue from the vehicle sales was primarily related to OTA and was recorded within other current liabilities and other long-term liabilities in the condensed consolidated balance sheets. As of June 30, 2026 and December 31, 2025, the deferred revenue balance was not material. The Company recorded amounts due from the Purchaser of SAR 700.9 million (approximately $ 186.6 million) and SAR 452.1 million (approximately $ 120.5 million) in accounts receivable, net in the condensed consolidated balance sheets as of June 30, 2026 and December 31, 2025, respectively. See “Vehicle Sales” section under Note 2 “Summary of Significant Accounting Policies” for the revenue recognition policies. 43 Implementation Agreement with Aston Martin In June 2023, the Company entered into an agreement (the “Implementation Agreement”) with Aston Martin, a related party of the 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 EV 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 and the first cash installment of $ 33.0 million. These shares were initially measured at a fair value of $ 73.2 million. As of June 30, 2026 and December 31, 2025, the Company remeasured the shares and recorded fair values of $ 14.2 million and $ 24.3 million within long-term investments in the condensed consolidated balance sheets, respectively. The Company will receive the remaining cash payments of $ 99 million phased over a period of three years . Aston Martin has also committed to an effective minimum spend with the Company on powertrain components of $ 225 million. 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 $ 5.8 million from inception through June 30, 2026. As of June 30, 2026 and December 31, 2025, the Company recorded accounts receivable of $ 2.8 million. 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 June 30, 2026 and December 31, 2025, the Company recorded $ 114.8 million as deferred revenue within other long-term liabilities in the condensed consolidated balance sheets, respectively. DDTL Credit Facility In August 2024, the Company entered into a $ 750.0 million five year DDTL Credit Facility with Ayar, which may be used for working capital and general corporate purposes. In November 2025, the Company increased the aggregate principal amount of the DDTL Credit Facility from $ 750.0 million to $ 1.98 billion. In April 2026, the Company borrowed $ 500.0 million under the DDTL Credit Facility. In April 2026, the Company also entered into the DDTL Amendment, pursuant to which the aggregate undrawn delayed commitments under the DDTL Credit Facility were increased by $ 500.0 million, such that, after giving effect to such increase, the aggregate sum of outstanding delayed draw term loans and aggregate undrawn commitments was increased to approximately $ 2.48 billion. In July 2026, the Company borrowed another $ 800.0 million under the DDTL Credit Facility. See Note 6 “Debt” and Note 17 “Subsequent Events” for more information. Time Deposit The Company purchases time deposits with GIB from time-to-time. GIB is a related party of the PIF, which is an affiliate of Ayar. As of June 30, 2026 and December 31, 2025, the Company recorded time deposit balance of nil and $ 50.0 million within short-term investments in the condensed consolidated balance sheets, respectively. See Note 5 “Fair Value Measurements and Financial Instruments” for more information. Ayar Prepaid Forward Transactions In connection with the pricing of the 2030 Notes, Ayar entered into a privately negotiated prepaid forward transaction with the Forward Counterparty, pursuant to which Ayar will purchase approximately $ 430.0 million of the Company’s common stock with delivery expected to occur on or about the maturity date for the 2030 Notes, subject to the ability of the Forward Counterparty to elect to settle all or a portion of the prepaid forward transaction early. The periodic fee incurred associated with the prepaid forward transaction was not material for the three and six months ended June 30, 2026. See Note 6 “Debt” for more information. In connection with the pricing of the 2031 Notes, Ayar entered into a privately negotiated prepaid forward transaction with the Forward Counterparty, pursuant to which Ayar will purchase approximately $ 636.7 million of the Company’s common stock with delivery expected to occur on or about the maturity date for the 2031 Notes, subject to the ability of the Forward Counterparty to elect to settle all or a portion of the prepaid forward transaction early. The periodic fee incurred associated with the prepaid forward transaction was not material for the three and six months ended June 30, 2026. See Note 6 “Debt” for more information. 44 Uber Agreements Uber is a related party of the Company. Uber, through its subsidiary SMB, owned approximately 9.6 % of the Company’s outstanding common stock as of June 30, 2026. In addition, the Chairman of the Company’s Board of Directors serves on Uber’s Board of Directors, and the Company’s Board of Directors appointed Uber’s Chief Product Officer as a director in June 2026. In July 2025, the Company entered into the First VPA with Uber and the 2025 Subscription Agreement with SMB, a subsidiary of Uber. Under the First VPA, Uber and its designated fleet operators have agreed to purchase a minimum commitment of Lucid Gravity Plus vehicles. Under the 2025 Subscription Agreement, the Company agreed to issue and SMB agreed to purchase, in a private placement, the Company’s common stock equal to (i) $ 300.0 million in cash divided by (ii) an amount equal to the arithmetic average of the daily volume-weighted average price of the common stock over a period of 30 consecutive trading days ending on, and including, July 15, 2025. The Company consummated the private placement of shares to SMB and issued 13,715,121 shares at a price per share of $ 21.87 , for aggregate net proceeds of $ 299.7 million. In April 2026, the Company entered into the Second VPA with Uber and the 2026 Subscription Agreement with SMB. Under the Second VPA, Uber and its designated fleet operators have agreed to purchase a minimum commitment of Lucid Midsize Plus vehicles. Under the 2026 Subscription Agreement, the Company agreed to issue and SMB agreed to purchase, in a private placement, $ 200 million of its common stock. The Company also consummated the private placement of shares to SMB and issued 24,038,462 shares at a price per share of $ 8.32 , for aggregate net proceeds of $ 199.8 million. See Note 8 – Stockholders’ Equity for more information. As of June 30, 2026, the Company had no material amounts due from or due to Uber or SMB related to these arrangements. NOTE 16 – SEGMENT REPORTING The Company operates in 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’s CODM is its Chief Executive Officer. The Company derives segment revenue primarily from the sale of EVs to customers, and the Company’s reported measure of the segment’s profit or loss is the consolidated net loss reported in the condensed consolidated statements of operations and comprehensive loss. The CODM uses the consolidated net loss for monitoring actual results to assess the Company’s financial performance. The Company’s CODM does not evaluate its reportable segment using asset information. The disaggregation of the Company’s revenue by geographic area based on the sales location where the sales originated was as follows (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 North America (1) $ 293,218 $ 218,369 $ 526,013 $ 441,267 Middle East (2) 98,232 36,643 140,481 44,457 Other international 13,897 4,420 21,318 8,756 Total revenue $ 405,347 $ 259,432 $ 687,812 $ 494,480 (1) U.S. revenue was $ 284.4 million and $ 509.7 million for the three and six months ended June 30, 2026, respectively, and $ 212.7 million and $ 431.1 million for the same periods in the prior year, respectively. (2) Kingdom of Saudi Arabia revenue was $ 98.2 million and $ 140.2 million for the three and six months ended June 30, 2026, respectively, and $ 35.9 million and $ 43.4 million for the same periods in the prior year, respectively. 45 The following table included information about reported segment revenue, segment profit or loss, and significant segment expenses (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 Revenue $ 405,347 $ 259,432 $ 687,812 $ 494,480 Less: Cost of revenue - excluding LCNRV and provision for warranty ( 514,194 ) ( 332,144 ) ( 851,400 ) ( 631,756 ) Cost of revenue - LCNRV ( 299,706 ) ( 184,679 ) ( 537,559 ) ( 336,315 ) Cost of revenue - provision for warranty ( 18,172 ) ( 14,960 ) ( 37,283 ) ( 27,272 ) Research and development expenses ( 321,336 ) ( 273,839 ) ( 657,006 ) ( 525,085 ) Selling, general, and administrative expenses ( 300,432 ) ( 256,857 ) ( 604,608 ) ( 469,032 ) Workforce reduction charges ( 33,675 ) — ( 71,609 ) — Change in fair value of common stock warrant liability — 5,322 — 18,183 Change in fair value of equity securities 549 3,948 ( 9,672 ) ( 9,505 ) Change in fair value of derivative liabilities and subscription agreements associated with redeemable convertible preferred stock (related party) 102,790 111,475 110,165 393,175 Gain on extinguishment of debt — 116,360 — 116,360 Interest income 9,634 44,318 22,738 96,527 Interest expense ( 47,817 ) ( 23,749 ) ( 88,890 ) ( 35,632 ) Other income (expense), net ( 16,789 ) 3,572 ( 24,656 ) 6,537 Benefit from (provision for) income taxes ( 1,050 ) 2,369 ( 1,227 ) 3,732 Segment net loss ( 1,034,851 ) ( 539,432 ) ( 2,063,195 ) ( 905,603 ) Consolidated net loss $ ( 1,034,851 ) $ ( 539,432 ) $ ( 2,063,195 ) $ ( 905,603 ) Depreciation and amortization expenses were $ 122.2 million and $ 238.6 million for the three and six months ended June 30, 2026, respectively, and $ 111.1 million and $ 209.0 million for the same periods in the prior year, respectively. The long-lived assets by geographic area were as follows (in thousands): June 30, 2026 December 31, 2025 United States $ 3,510,683 $ 3,487,142 Foreign (1) 961,177 732,964 Total long-lived assets $ 4,471,860 $ 4,220,106 (1) Kingdom of Saudi Arabia long-lived assets balance was $ 899.1 million and $ 658.6 million as of June 30, 2026 and December 31, 2025. No other individual foreign country had more than 10% of the total long-lived assets balance as of June 30, 2026 and December 31, 2025. NOTE 17 – SUBSEQUENT EVENTS In connection with the preparation of the condensed consolidated financial statements for the three and six months ended June 30, 2026, the Company evaluated subsequent events and concluded there were no subsequent events that required recognition in the condensed consolidated financial statements. DDTL Credit Facility In July 2026, the Company borrowed an additional $ 800.0 million under the DDTL Credit Facility. After giving effect to this borrowing, approximately $ 1.18 billion remains undrawn under the DDTL Credit Facility. CFO Transition In July 2026, the Board appointed Alexander De Bock as the Company’s incoming Chief Financial Officer. Mr. De Bock will join the Company as its Chief Financial Officer, effective August 5, 2026. Taoufiq Boussaid, the Company’s current Chief Financial Officer, will take on an advisory role for a period of time to help ensure a smooth transition. 46 Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations. Management’s Discussion and Analysis of Financial Condition and Results of Operations The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our condensed consolidated financial statements and related notes included elsewhere in this Quarterly Report and our Annual Report on Form 10-K for the year ended December 31, 2025, filed with the SEC on February 24, 2026. This discussion may contain forward-looking statements based upon Lucid’s current expectations, estimates and projections that involve risks and uncertainties. Our actual results could differ materially from those anticipated in these forward-looking statements as a result of various factors, including those set forth under “Risk Factors”, in Part II, Item 1A of this Quarterly Report. Unless otherwise noted, the share, per share, and related information in this Quarterly Report has been retrospectively adjusted to reflect the Reverse Stock Split. Overview We are a technology company that is shaping the future of mobility through our innovations, advanced technology, and software-defined vehicle platforms. Our award-winning Lucid Air and Lucid Gravity set new standards with their unmatched combination of performance, range, space, and efficiency. Our focus on in-house hardware and software innovation, vertical integration, and a “clean sheet” approach to engineering and design led to the development of the award-winning Lucid Air and Lucid Gravity, and our upcoming Midsize platform. We sell vehicles directly to consumers through our retail sales network and online channels, including Lucid Financial Services, in North America and the Middle East. We believe that owning and operating our sales network provides the best opportunity to closely manage the customer experience, gather direct feedback, and ensure that every interaction is tailored to customer needs. We are also actively exploring, and have adopted in certain international markets, alternative importer and agency models to enhance flexibility, preserve capital, and optimize our distribution strategy in response to evolving market dynamics. We also own and operate a vehicle service network comprised of service centers in major metropolitan areas and a fleet of mobile service vehicles. In addition to our in-house capabilities, we continue to grow an approved list of specially trained collision repair shops, which in some cases serve as repair hubs for mobile service. Recent Developments Workforce Reduction In June 2026, we announced the June 2026 Plan that was designed to advance our path toward profitability and positive cash flow generation by streamlining our organizational structure, optimizing operating expenses, and aligning production plans with anticipated demand. We expect to substantially complete the June 2026 Plan by the end of the third quarter of 2026, subject to local law and consultation requirements. As a result of the June 2026 Plan, we expect to incur total workforce reduction charges of approximately $34 million, primarily related to severance payments, employee benefits, and employee transition. We expect the Plan to provide us with an annualized cost savings of approximately $158 million. Cash Flow Improvement We identified approximately $1.4 billion in cash flow improvements for 2026. These opportunities span inventory, capital expenditures, and operating expenses, and together are intended to improve liquidity, reduce cash burn, and increase capital efficiency while preserving key growth programs, including our Midsize platform and autonomous commercialization initiatives. As part of such efforts, we have reduced our production volume to better align production plans with anticipated demand to improve working capital. Furthermore, we have in the past reduced the size of our workforce, and recently implemented workforce reduction plans and other actions relating to contractors in the first half of 2026, including the elimination of the second shift of production at our AMP-1 factory. Midsize Platform During the quarter, we continued to make steady progress toward the start of production of our Midsize platform. The next major phases of the program include additional prototype and quality-launch builds, completion of regulatory and homologation activities, expanded manufacturing validation, and preparation for the start and ramp of production. We will provide additional updates as milestones are achieved and we continue to expect to ramp up Midsize production in the second half of 2027. 47 Executive Leadership Changes Effective as of June 1, 2026, Mr. Silvio Napoli has been appointed as our Chief Executive Officer and principal executive officer. Mr. Marc Winterhoff resumed his previous role of our Chief Operating Officer effective as of the same day, and subsequently departed our company following the elimination of the Chief Operating Officer position in June 2026. On July 2, 2026, the Board appointed Alexander De Bock as our incoming Chief Financial Officer. Mr. De Bock will join the Company as its Chief Financial Officer, effective August 5, 2026. Taoufiq Boussaid, the Company’s current Chief Financial Officer, will take on an advisory role for a period of time to help ensure a smooth transition. On July 2, 2026, we also announced several additional organizational and leadership changes. DDTL Credit Facility In July 2026, we borrowed an additional $800.0 million under the DDTL Credit Facility. After giving effect to this borrowing, approximately $1.18 billion remains undrawn under the DDTL Credit Facility. Potential Impact of Adverse Economic Conditions and Trade Policy Uncertainties on our Business A global economic recession, downturn or other adverse economic conditions, whether due to changes or uncertainties in trade policies, the imposition or proposed imposition of tariffs, export controls, threat of a trade war, persistent inflation, political instability, global or regional conflicts or other geopolitical events, public health crises, interest rate increases or other central bank policy actions, bank closures and liquidity concerns at financial institutions, or other factors, have in the past and may in the future have an adverse impact on our business, prospects, financial condition and results of operations. If any of our suppliers, sub-suppliers or partners experience financial distress, insolvency or disruptions in operations, they may be unable to fulfill their obligations or meet our production and quality requirements. Adverse economic conditions and uncertainty about the current and future domestic or global economic conditions may also cause our customers to defer purchases or cancel their orders in response to higher interest rates, limited consumer credit availability, lower cash reserves, fluctuations in foreign currency exchange rates, and weakened consumer confidence. A reduction in demand for our products may result in a decline in product sales, with a corresponding material adverse impact on our business, prospects, financial condition and results of operations. Given our premium brand positioning and pricing, an economic recession or downturn is likely to have a disproportionate adverse effect on us compared to our competitors in the EV and traditional automotive sectors, to the extent that consumer demand for luxury goods declines in favor of more cost-conscious alternatives. In addition, adverse economic conditions and uncertainties surrounding trade policies, tariffs and export controls could also cause supply chain and logistical challenges and operational risks. In particular, the U.S. federal government enacted the law commonly referred to as the OBBBA, which eliminates, limits or phases out certain tax credits that had previously provided significant benefits to lessees and purchasers of EVs and adds new eligibility requirements on manufacturers to continue claiming tax credits on EV components. It also eliminates certain penalties for noncompliance with certain fuel efficiency standards and introduces certain key tax law modifications. Taken together, adverse economic conditions and uncertainties surrounding trade policies, tariffs and export controls, coupled with supply chain challenges and the potential difficulty of passing costs to consumers or sharing the burden with suppliers, could reduce demand for our products and have a material adverse effect on our business, prospects, results of operations and financial condition. In addition, the deterioration of conditions in the financial markets may limit our ability to obtain external financing to fund our operations and capital expenditures for business growth on terms favorable to us, if at all. See “Risk Factors” in Part II, Item 1A of this Quarterly Report for more information regarding risks associated with a global economic downturn or recession, changes or uncertainties in trade policies, or the imposition or proposed imposition of tariffs, including under the captions “A global economic recession, downturn or other adverse economic conditions may have a material adverse impact on our business, prospects, results of operations and financial condition.” and “Changes in U.S. trade policy, including the imposition of or uncertainties surrounding tariffs or revocation of normal trade relations and the resulting consequences, could adversely affect our business, prospects, results of operations and financial condition.” Key Factors Affecting Our Performance We believe that our future success and financial performance depend on a number of factors that present significant opportunities for our business, but also pose risks and challenges, including those discussed below and in the section entitled “Risk Factors” in Part II, Item 1A of this Quarterly Report. 48 Design and Technology Leadership We believe that we are positioned to be a leader in the EV market by unlocking the potential for advanced, high-performance, and long-range EVs to co-exist. We designed the Lucid Air and the Lucid Gravity with race-proven battery and powertrain technologies, offering robust performance together with a sleek exterior design and expansive interior space due to our miniaturized key drivetrain components. The Lucid Gravity is a groundbreaking new class of SUV, conceived from the ground up. Enabled by our revolutionary technology, the Lucid Gravity provides the interior space and practicality of a full-size SUV within the exterior footprint of a mid-size SUV. As a result, it provides a sophisticated space for up to seven adults, game-changing versatility, and an unparalleled driving experience. The Lucid Air and the Lucid Gravity are software-defined vehicles, designed to improve over time, with OTA software updates and key hardware already in place in the vehicle. This holistic systems approach to the integration of hardware and software is what allows us to provide these continuous OTA updates. We designed the Lucid Gravity to share components with the Lucid Air where possible. These measures enable efficiency in design, engineering, and capital expenditure deployment for the Lucid Gravity. We anticipate continued consumer demand for our vehicles based on their luxurious design, high-performance technology, sustainability leadership, and the acceptance of EVs as substitutes for gasoline-fueled vehicles. We also anticipate that these attributes will drive customer demand for our future models, including our upcoming Midsize platform. Distribution Models We operate a direct-to-consumer sales and service model in North America, which we believe allows us to offer a personalized experience for our customers based on their purchase and ownership preferences. We expect to continue to incur significant expenses in our sales, service and marketing operations for sales of our current vehicles and any future vehicle programs, including the upcoming Midsize platform, that we may offer over the coming decade, including to open additional studios, expand our sales force, grow marketing and brand awareness, and establish a robust service center operation. As of June 30, 2026, we have opened 62 studios and service centers (excluding temporary and satellite service centers): 39 in the U.S. (14 in California, four in New York, three in Florida, two in each of Arizona, Illinois, Massachusetts, New Jersey, Texas, Virginia and Washington, and one in each of Colorado, Georgia, Michigan and Pennsylvania), seven in Germany, five in Canada, four in Saudi Arabia, three in Switzerland, two in Norway, one in the Netherlands, and one in the United Arab Emirates. We also plan to hire additional sales, customer service, and service center personnel. We believe that investing in our direct-to-consumer sales and service model will be critical to delivering and servicing the Lucid EVs we currently manufacture and sell. As we expand globally, our strategy includes establishing third-party distribution partnerships through proven business models such as importer, dealer, agent, and authorized repairer relationships. Introducing these channels is expected to enable growth in these markets while optimizing the capital required to build a comprehensive sales and service network. All third-party partnerships are expected to be governed by robust agreements, standards, and guidelines to ensure compliance and maintain the Lucid customer experience throughout the entire journey. Expanding and Improving Manufacturing Capacity and Processes Achieving commercialization and growth for each generation of our EVs requires us to make significant capital expenditures to scale our production capacity and improve our supply chain processes in the U.S. and internationally. We expect our capital expenditures to increase as we continue constructing and putting into operation the CBU portion of AMP-2 and expanding AMP-1. The amount and timing of our future manufacturing capacity requirements, and resulting capital expenditures, will depend on many factors, including the pace and results of our research and development efforts to meet technological development milestones, our ability to develop and launch new EVs, our ability to achieve sales and meet customer demand at anticipated levels, our ability to utilize planned capacity in our existing facilities and our ability to enter new markets. Technology Innovation We develop in-house battery, powertrain, and software technology, which requires significant capital investment in research and development. The EV market is highly competitive, including both established automotive manufacturers and new entrants. To establish market position and attract customers, we plan to continue making substantial investments in research and development for the commercialization and continued enhancements of our current vehicles where strategically warranted, the development of our Midsize platform, as well as future generations of our EVs and other products. 49 Results of Operations Revenue The following table presents our revenue for the periods presented (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2026 2025 $ Change % Change 2026 2025 $ Change % Change Revenue $ 405,347 $ 259,432 $ 145,915 56 % $ 687,812 $ 494,480 $ 193,332 39 % We recognize revenue from vehicle sales when the customer obtains control of the vehicle, which is upon delivery. We also generate revenue from non-warranty after-sale vehicle services and parts, sales of battery pack systems, powertrain kits, retail merchandise, regulatory credits, and sales of non-Lucid vehicles acquired as part of the trade-in program. We generate regulatory credits revenue from the sale of tradable credits we earn under various regulations. This includes credits related to ZEVs and GHG, and CAFE credits. Revenue increased by $145.9 million, or 56% and $193.3 million, or 39% for the three and six months ended June 30, 2026, respectively, as compared to the same periods in the prior year. The increases were primarily driven by higher Lucid vehicle deliveries for the three and six months ended June 30, 2026, as compared to the same periods in the prior year. In addition, our ramp-up of the Lucid Gravity, which has a higher average selling price, resulted in a favorable product mix that further contributed to the increases in revenue. The increase in revenue was partially offset by a decrease of $24.8 million in regulatory credit sales for the six months ended June 30, 2026 as compared to the same period in the prior year. We believe the recent proposal to lower the U.S. federal fuel economy standards and eliminate CAFE EV credit trading may create uncertainties regarding our ability to generate future regulatory credit sales. Please see “ Risk Factors — Risks Related to Our Business and Operations — The unavailability, reduction or elimination of certain government and economic programs could have a material adverse effect on our business, prospects, financial condition and results of operations ”. Cost of Revenue and Gross Profit (Loss) The following table presents our cost of revenue and gross profit (loss) for the periods presented (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2026 2025 $ Change % Change 2026 2025 $ Change % Change Cost of revenue $ 832,072 $ 531,783 $ 300,289 56 % $ 1,426,242 $ 995,343 $ 430,899 43 % Gross profit (loss) $ (426,725) $ (272,351) $ (154,374) 57 % $ (738,430) $ (500,863) $ (237,567) (47) % Gross margin (105.3) % (105.0) % (107.4) % (101.3) % 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 vehicle sales also includes depreciation of operating lease vehicles. Manufacturing credits earned are recorded as a reduction to cost of vehicle sales. Cost of other revenue includes direct parts, material and labor costs, 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. Cost of revenue increased by $300.3 million, or 56% and $430.9 million, or 43% for the three and six months ended June 30, 2026, as compared to the same periods in the prior year. The increases were primarily due to higher deliveries of Lucid vehicles and higher inventory write-downs associated with inventory optimization actions, partially offset by reduction in losses on firm commitment as a result of lower volume for the three and six months ended June 30, 2026, as compared to the same periods in the prior year. The increases were also partially offset by the IEEPA tariff refund of approximately $9.5 million and $62.5 million recorded during the three and six months ended June 30, 2026, following the U.S. Supreme Court’s February 2026 ruling that certain tariffs imposed under the IEEPA were unlawful. In the near term, we expect our production volume of vehicles to continue to be less than our manufacturing capacity. 50 We recorded write-downs of $299.7 million and $537.6 million for the three and six months ended June 30, 2026, respectively, and $184.7 million and $336.3 million for the same periods in the prior year, respectively, to reduce our inventories to their net realizable values, for any excess or obsolete inventories, and losses from firm purchase commitments. The increases in the write-downs were primarily due to higher inventory balances driven by higher Lucid Gravity mix for the three and six months ended June 30, 2026, as compared to the same periods in the prior year. On August 16, 2022, the Inflation Reduction Act of 2022 (the “IRA”) was enacted with clean energy incentives. The impact of the IRA on our results of operations was not material for the three and six months ended June 30, 2026 and 2025. We will continue to evaluate the expected future impact of the IRA on our business and financial statements upon issuance of additional regulatory guidance. Gross margin for the three months ended June 30, 2026 remained flat as compared to the same period in the prior year, as higher Lucid vehicle deliveries and a favorable product mix were substantially offset by higher inventory write-down. Gross margin worsened slightly for the six months ended June 30, 2026, as compared to the same period in the prior year. The decrease in gross margin was primarily driven by higher inventory write-downs, partially offset by the IEEPA tariff refund of approximately $62.5 million and a favorable product mix, during the six months ended June 30, 2026, as compared to the same period in the prior year. Operating Expenses The following table presents our operating expenses for the periods presented (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2026 2025 $ Change % Change 2026 2025 $ Change % Change Research and development $ 321,336 $ 273,839 $ 47,497 17 % $ 657,006 $ 525,085 $ 131,921 25 % Selling, general and administrative 300,432 256,857 43,575 17 % 604,608 469,032 135,576 29 % Workforce reduction charges 33,675 — 33,675 *nm 71,609 — 71,609 *nm Total operating expenses $ 655,443 $ 530,696 $ 124,747 24 % $ 1,333,223 $ 994,117 $ 339,106 34 % *nm - not meaningful Research and Development Our research and development efforts have primarily focused on the development of our battery and powertrain technology, the Lucid Air, the Lucid Gravity, future generations of our EVs, including our Midsize platform, and our robotaxi program. Research and development expenses primarily consist of materials, supplies, personnel-related expenses for employees involved in the engineering, designing, and testing of EVs, and contractor fees. Personnel-related expenses primarily include salaries, benefits and stock-based compensation. In addition, research and development expenses include prototype material, engineering, design and testing services, and allocated facilities costs, such as office and rent expense and depreciation expense. Research and development expense increased by $47.5 million, or 17% for the three months ended June 30, 2026, as compared to the same period in the prior year. The increase was primarily attributable to increases of $41.1 million in engineering, design and testing services, and prototype materials related mostly to the Midsize platform, $8.4 million in payroll related expenses and $3.9 million in facilities and rental related costs, partially offset with $8.6 million in lower stock-based compensation expenses. Research and development expense increased by $131.9 million, or 25% for the six months ended June 30, 2026, as compared to the same period in the prior year. The increase was primarily attributable to increases of $84.0 million in engineering, design and testing services, and prototype materials related mostly to the Midsize platform, $36.0 million in payroll related expenses, and $11.1 million in utilization of contractors and professional fees primarily related to an increase in headcount to support our Midsize platform, partially offset by $5.7 million in lower stock-based compensation expenses. 51 Selling, General, and Administrative Selling, general, and administrative expenses primarily 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. Personnel-related expenses primarily include salaries, benefits and stock-based compensation. Selling, general, and administrative expenses also include allocated facilities costs, such as office, rent and depreciation expenses, professional services fees, sales and marketing expenses and other general corporate expenses. As we continue to grow as a company, build out our sales force, and commercialize the Lucid Air and Lucid Gravity, and future generations of our EVs, including our Midsize platform, we expect an increase to our selling, general and administrative costs. Selling, general, and administrative expense increased by $43.6 million, or 17% for the three months ended June 30, 2026, as compared to the same period in the prior year. The increase was primarily attributable to increases of $15.5 million in sales and marketing expenses, $14.7 million in utilization of contractors and professional fees, and $8.5 million in other general corporate expense. Selling, general, and administrative expense increased by $135.6 million, or 29% for the six months ended June 30, 2026, as compared to the same period in the prior year. The increase was primarily attributable to increases of $31.3 million in sales and marketing expenses, $26.3 million in stock-based compensation expenses, primarily driven by a reversal of previously recognized expenses for the former CEO’s unvested time-based RSUs during the six months ended June 30, 2025, $24.3 million in payroll related expenses due to our continued commercialization and growth strategy, $19.4 million in facilities and rental related costs and $17.2 million in utilization of contractors and professional fees. Workforce Reduction Charges On June 22, 2026, we announced the June 2026 Plan that was designed to advance our path toward profitability and positive cash flow generation by streamlining our organizational structure, optimizing operating expenses, and aligning production plans with anticipated demand. We expect to substantially complete the June 2026 Plan by the end of the third quarter of 2026, subject to local law and consultation requirements. As a result of the June 2026 Plan, we expect to incur total workforce reduction charges of approximately $34 million. On February 20, 2026, we announced the February 2026 Plan that intended to align with our long-term operating goals as we focus on the start of production of our Midsize platform, expansion into the robotaxi market and development of ADAS technologies, as well as the sale and distribution of our current models in existing and new geographies. We substantially completed the February 2026 Plan in the second quarter of 2026. During the three and six months ended June 30, 2026, we recorded workforce reduction charges of $33.7 million and $71.6 million, respectively, in the condensed consolidated statements of operations and comprehensive loss. The workforce reduction charges are comprised of $33.3 million related to the June 2026 Plan for the three and six months ended June 30, 2026, and $0.4 million and $38.3 million related to the February 2026 Plan for the three and six months ended June 30, 2026, respectively. The workforce reduction charges were primarily related to severance payments, employee benefits, employee transition, and acceleration of stock-based compensation expense. See Note 3 “Workforce Reduction” to our condensed consolidated financial statements included elsewhere in this Quarterly Report for more information. Other Income, net The following table presents our other income, net for the periods presented (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2026 2025 $ Change % Change 2026 2025 $ Change % Change Other income (expense), net: Change in fair value of common stock warrant liability $ — $ 5,322 $ (5,322) (100) % $ — $ 18,183 $ (18,183) (100) % Change in fair value of equity securities of a related party 549 3,948 (3,399) (86) % (9,672) (9,505) (167) 2 % Change in fair value of derivative liabilities and subscription agreements associated with redeemable convertible preferred stock (related party) 102,790 111,475 (8,685) (8) % 110,165 393,175 (283,010) (72) % Gain on extinguishment of debt — 116,360 (116,360) (100) % — 116,360 (116,360) (100) % Interest income 9,634 44,318 (34,684) (78) % 22,738 96,527 (73,789) (76) % Interest expense (47,817) (23,749) (24,068) 101 % (88,890) (35,632) (53,258) 149 % Other income (expense), net (16,789) 3,572 (20,361) *nm (24,656) 6,537 (31,193) *nm Total other income, net $ 48,367 $ 261,246 $ (212,879) (81) % $ 9,685 $ 585,645 $ (575,960) (98) % *nm - not meaningful 52 Change in Fair Value of Common Stock Warrant Liability Our common stock warrant liability relates to the Private Placement Warrants to purchase shares of our common stock that were effectively issued upon the closing in connection with the Merger. Our common stock warrant liability is subject to remeasurement to fair value at each reporting period. The Private Placement Warrants remained unexercised as of June 30, 2026, and the liability was remeasured to a fair value of nil as of June 30, 2026 and December 31, 2025. The changes in fair value were nil during the three and six months ended June 30, 2026, and resulted in unrealized gains of $5.3 million and $18.2 million for the same periods in the prior year, respectively. The change in fair value was classified within change in fair value of common stock warrant liability in the condensed consolidated statements of operations and comprehensive loss. Change in Fair Value of Equity Securities of a Related Party On November 6, 2023, in connection with the commencement of the Strategic Technology Arrangement with Aston Martin, we received 28,352,273 ordinary shares of Aston Martin. The ordinary shares of Aston Martin are subject to remeasurement to fair value at each reporting period. Such shares were remeasured to fair values of $14.2 million and $24.3 million as of June 30, 2026 and December 31, 2025, respectively. The changes in fair value resulted in an unrealized gain of $0.5 million and an unrealized loss of $9.7 million for the three and six months ended June 30, 2026, respectively, and an unrealized gain of $3.9 million and an unrealized loss of $9.5 million for the same periods in the prior year, respectively, and were classified within change in fair value of equity securities of a related party in the condensed consolidated statements of operations and comprehensive loss. See Note 5 “Fair Value Measurements and Financial Instruments” and Note 15 “Related Party Transactions” to our condensed consolidated financial statements included elsewhere in this Quarterly Report for more information. Change in Fair Value of Derivative Liabilities and Subscription Agreements Associated with Redeemable Convertible Preferred Stock (Related Party) In March 2024, we sold 100,000 shares of our Series A Redeemable Convertible Preferred Stock to Ayar for an aggregate purchase price of $1.0 billion in a private placement. In August 2024, we sold 75,000 shares of our Series B Redeemable Convertible Preferred Stock to Ayar for an aggregate purchase price of $750.0 million in a private placement. On April 14, 2026, we entered into the Series C Subscription Agreement with Ayar. Pursuant to the Series C Subscription Agreement, Ayar agreed to purchase from us 55,000 shares of our Series C Redeemable Convertible Preferred Stock, for an aggregate purchase price of $550.0 million in a private placement. Subsequently, on April 28, 2026, we issued the shares to Ayar pursuant to the Series C Subscription Agreement and received aggregate net proceeds of $548.9 million after deducting issuance costs of $1.1 million. We determined that the Subscription Agreement was required to be accounted for at fair value between the execution date and the settlement date as it represented a contract to sell redeemable stock. As a result, we recognized a gain of $142.2 million reflecting the change in fair value of the contract as measured upon settlement based on the difference between the fair value of the Series C Redeemable Convertible Preferred Stock at issuance versus the cash purchase price negotiated at fair value at contract inception, such that the Series C Redeemable Convertible Preferred Stock is initially recognized at fair value of $292.4 million on the issuance date. We concluded that the conversion features, inclusive of all settlement outcomes where the pay-off is indexed to the if-converted value, meets all the requirements to be separately accounted for as a bifurcated derivative. As a result, we bifurcated the Redeemable Convertible Preferred Stock between (i) the host contracts which are accounted for within mezzanine equity, and (ii) the bifurcated derivative liabilities related to the conversion features. The bifurcated derivatives are remeasured to fair value at each reporting period with changes in fair value recorded in the condensed consolidated statement of operations and comprehensive loss. The derivative liabilities of the Redeemable Convertible Preferred Stock were remeasured to a fair value of $163.7 million and $16.2 million as of June 30, 2026 and December 31, 2025, respectively. We recognized gains of $102.8 million and $110.2 million for the three and six months ended June 30, 2026, respectively, and gains of $111.5 million and $393.2 million for the same periods in the prior year, respectively, primarily driven by changes in our stock price. The gains for the three and six months ended June 30, 2026 includes $142.2 million of gain from Series C Subscription Agreement. The change in fair value are recorded within change in fair value of derivative liabilities and subscription agreements associated with redeemable convertible preferred stock (related party) in the condensed consolidated statements of operations and comprehensive loss. See Note 7 “Redeemable Convertible Preferred Stock” to our condensed consolidated financial statements included elsewhere in this Quarterly Report for more information. Gain on Extinguishment of Debt In April 2025, we repurchased $1,052.5 million aggregate principal amount of the 2026 Notes, using $931.4 million of the net proceeds of the 2030 Notes. The repurchases of the 2026 Notes were accounted for as a debt extinguishment. The difference between the consideration paid to repurchase a portion of the 2026 Notes and the then carrying value of the 2026 Notes resulted in a gain of $116.4 million, and was recorded within gain on extinguishment of debt in the condensed consolidated statement of operations and comprehensive loss during the three and six months ended June 30, 2025. 53 Interest Income Interest income decreased by $34.7 million, or 78% for the three months ended June 30, 2026, as compared to the same period in the prior year, primarily due to lower average cash and investment balances and lower interest rates on investments. Interest income decreased by $73.8 million, or 76% for the six months ended June 30, 2026, as compared to the same period in the prior year, primarily due to lower average cash and investment balances. Interest Expense Interest expense primarily consists of contractual interest and amortization of debt discounts and debt issuance costs incurred related to the 2026 Notes, the 2030 Notes, and the 2031 Notes, commitment fees and amortization of deferred issuance costs from the ABL Credit Facility and the DDTL Credit Facility, interest on borrowings from the DDTL Credit Facility, GIB credit facility and on our finance leases, and capitalized interest on construction in progress related to significant capital asset construction. Interest expense increased by $24.1 million, or 101% and $53.3 million, or 149% for the three and six months ended June 30, 2026, respectively, as compared to the same periods in the prior year. The increases were primarily due to higher interest expense of $18.1 million and $48.9 million from the issuances of the 2030 Notes and the 2031 Notes in April 2025 and November 2025, respectively, and higher interest expense of $16.1 million and $21.6 million from the GIB credit facility and DDTL Credit Facility resulting from higher average borrowings, partially offset by increases of $7.8 million and $15.9 million in interest capitalized on construction in progress related to significant capital asset construction during the three and six months ended June 30, 2026, respectively, as compared to the same periods in the prior year. Other Income (Expense), net Other income (expense), net primarily consists of foreign currency gains and losses, changes in residual value guarantee reserve, and realized gains or losses on the sale of available-for-sale securities. Our foreign currency exchange gains and losses relate to transactions and monetary asset and liability balances denominated in currencies other than the U.S. dollar. We expect our foreign currency gains and losses to continue to fluctuate in the future due to changes in foreign currency exchange rates. Other income (expense), net changed by $20.4 million and $31.2 million for the three and six months ended June 30, 2026, as compared to the same periods in the prior year, primarily due to changes in foreign exchange rates and residual value guarantee reserve. The change for the six months ended June 30, 2026 is also due to realized gains on the sale of available-for-sale securities. Provision for (Benefit from) Income Taxes The following table presents our provision for (benefit from) income taxes for the periods presented (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2026 2025 $ Change % Change 2026 2025 $ Change % Change Provision for (benefit from) income taxes $ 1,050 $ (2,369) $ 3,419 *nm $ 1,227 $ (3,732) $ 4,959 *nm *nm - not meaningful Our provision for (benefit from) income taxes consists primarily of U.S., state and foreign income taxes in jurisdictions in which we operate. We maintain a valuation allowance against the full value of our U.S. and state net deferred tax assets because we believe it is more likely than not that the recoverability of these deferred tax assets will not be realized. On July 4, 2025, the OBBBA was signed into law. We elected to fully amortize our previously capitalized domestic research and development expenses. Due to the full valuation allowance on our U.S. deferred tax assets, the net tax impact of the legislation is immaterial. 54 Liquidity and Capital Resources Sources of Liquidity As of June 30, 2026, we had $775.5 million of cash, cash equivalents, and investments. We also had $1.98 billion, $270.4 million, and $2.3 million of unused available credit amounts from the DDTL Credit Facility, the ABL Credit Facility, and the 2025 GIB Credit Facility, respectively, as of June 30, 2026. Our existing sources of liquidity include cash, cash equivalents, investments, and unused available credit amounts from credit facilities. We funded operations primarily with issuances of common stock, convertible preferred stock, convertible notes, and loans. We expect that our current sources of liquidity together with our projection of cash flows from operating activities will provide us with adequate liquidity for at least the next 12 months, including investment in funding (i) ongoing operations, (ii) research and development projects for new products/ technologies, (iii) further expansion of AMP-1 in Casa Grande, Arizona, (iv) construction of the CBU portion of AMP-2 in Saudi Arabia, (v) vendor tooling, (vi) expansion of retail studios and service centers, and (vii) other initiatives related to the sale of vehicles or technology. We anticipate our cumulative spending on capital expenditures to be approximately $1.0 billion for the fiscal year 2026 to support our continued commercialization and growth objectives as we strategically invest in manufacturing capacity and capabilities, our retail studios and service center capabilities throughout North America and across the globe, development of different products and technologies, and other areas supporting the growth of Lucid’s business. We expect to continue to receive financing and support for certain capital expenditures in connection with AMP-2 construction and purchases of machinery, tooling, and equipment. Refer to Note 6 “Debt”, Note 15 “Related Party Transactions” and Note 17 “Subsequent Events” to the condensed consolidated financial statements included elsewhere in this Quarterly Report for more information. Our future capital expenditures may vary and will depend on many factors including the timing and extent of spending and other growth initiatives. In addition, we expect our operating expenses to increase in order to grow and support the operations of a global technology automotive company targeting volumes in line with Lucid’s aspirations. As of June 30, 2026, our total minimum lease payments are $630.0 million, of which $55.3 million is due in fiscal year 2026. We also have non-cancellable long-term commitments of approximately $2.55 billion, primarily relating to certain inventory component purchases. For details regarding these obligations, refer to Note 10 “Leases” and Note 11 “Commitments and Contingencies” to the condensed consolidated financial statements included elsewhere in this Quarterly Report for more information. 2026 Notes In December 2021, we issued $2,012.5 million of the 2026 Notes. The 2026 Notes accrue interest at a rate of 1.25% per annum, payable semi-annually in arrears on June 15 and December 15 of each year, beginning on June 15, 2022. The 2026 Notes will mature on December 15, 2026, unless earlier repurchased, redeemed or converted. Before the close of business on the business day immediately before September 15, 2026, noteholders will have the right to convert their 2026 Notes only upon the occurrence of certain events. From and after September 15, 2026, noteholders may elect at any time to convert their 2026 Notes until the close of business on the second scheduled trading day immediately before the maturity date. We will settle conversions by paying or delivering, as applicable, cash, shares of our common stock or a combination of cash and shares of our common stock, at our election. The initial conversion rate is 1.8255 shares of common stock per $1,000 principal amount of the 2026 Notes, which represents an initial conversion price of approximately $547.80 per share of common stock. The conversion rate and conversion price will be subject to customary adjustments upon the occurrence of certain events, including a reverse stock split. In addition, if certain corporate events that constitute a make-whole fundamental change (as defined in the indenture) occur, then the conversion rate will, in certain circumstances, be increased for a specified period of time. As of June 30, 2026 and December 31, 2025, we were in compliance with applicable covenants under the indenture governing the 2026 Notes. In April 2025, contemporaneously with the 2030 Notes offering, we repurchased $1,052.5 million aggregate principal amount of the 2026 Notes, using $931.4 million of the net proceeds of the 2030 Notes. In November 2025, we repurchased $755.7 million aggregate principal amount of the 2026 Notes, using $748.2 million of the net proceeds of the 2031 Notes. Following the redemption, our outstanding principal balance of the 2026 Notes was $204.3 million. 55 2030 Notes and Capped Call Transactions 2030 Notes In April 2025, we issued $1,100.0 million of the 2030 Notes. Contemporaneously with the 2030 Notes offering, we entered into privately negotiated transactions with certain holders of the 2026 Notes to repurchase $1,052.5 million aggregate principal amount of the 2026 Notes, using $931.4 million of the net proceeds of the 2030 Notes. The 2030 Notes accrue interest at a rate of 5.00% per annum, payable semi-annually in arrears on April 1 and October 1 of each year, beginning on October 1, 2025. The 2030 Notes will mature on April 1, 2030, unless earlier repurchased, redeemed or converted. Before the close of business on the business day immediately before January 1, 2030, noteholders will have the right to convert their 2030 Notes only upon the occurrence of certain events. From and after January 1, 2030, noteholders may elect at any time to convert their 2030 Notes until the close of business on the second scheduled trading day immediately before the maturity date. We will settle conversions by paying or delivering, as applicable, cash, shares of our common stock or a combination of cash and shares of our common stock, at our election. The initial conversion rate is 33.3333 shares of common stock per $1,000 principal amount of the 2030 Notes, which represents an initial conversion price of approximately $30.00 per share of common stock. The conversion rate and conversion price will be subject to customary adjustments upon the occurrence of certain events, including a reverse stock split. In addition, if certain corporate events that constitute a make-whole fundamental change (as defined in the indenture) occur, then the conversion rate will, in certain circumstances, be increased for a specified period of time. As of June 30, 2026 and December 31, 2025, we were in compliance with applicable covenants under the indenture governing the 2030 Notes. Capped Call Transactions In connection with the 2030 Notes offering, we paid $118.3 million to enter into the Capped Call Transactions with certain financial institutions. The Capped Call Transactions cover, subject to anti-dilution adjustments, the number of shares of our common stock initially underlying the 2030 Notes. The Capped Call Transactions have an expiration date of April 1, 2030. We expect the Capped Call Transactions generally would reduce the potential dilution to our common stock upon conversion of the notes and/or offset any cash payments that we could be required to make in excess of the principal amount of any converted notes, as the case may be, in the event that the market price per share of our common stock, as measured under the terms of the Capped Call Transactions, is greater than the strike price of the Capped Call Transactions. The initial strike price of the Capped Call Transactions corresponds to the initial conversion price of the 2030 Notes, or approximately $30.00 per share of our common stock. The initial cap price of the Capped Call Transactions was $48.00 per share of our common stock and is subject to customary anti-dilution adjustments. 2031 Notes In November 2025, we issued $975.0 million of the 2031 Notes. Contemporaneously with the 2031 Notes offering, we entered into privately negotiated transactions with certain holders of the 2026 Notes to repurchase $755.7 million aggregate principal amount of the 2026 Notes, using $748.2 million of the net proceeds of the 2031 Notes. The 2031 Notes accrue interest at a rate of 7.00% per annum, payable semi-annually in arrears on May 1 and November 1 of each year, beginning on May 1, 2026. The 2031 Notes will mature on November 1, 2031, unless earlier repurchased, redeemed or converted. The holders may require us to repurchase the 2031 Notes on November 1, 2029. Before the close of business on the business day immediately before August 1, 2031, noteholders will have the right to convert their 2031 Notes only upon the occurrence of certain events. From and after August 1, 2031, noteholders may elect at any time to convert their 2031 Notes until the close of business on the second scheduled trading day immediately before the maturity date. We will settle conversions by paying or delivering, as applicable, cash, shares of our common stock or a combination of cash and shares of our common stock, at our election. The initial conversion rate is 48.0475 shares of common stock per $1,000 principal amount of the 2031 Notes, which represents an initial conversion price of approximately $20.81 per share of common stock. The conversion rate and conversion price will be subject to customary adjustments upon the occurrence of certain events, including a reverse stock split. In addition, if certain corporate events that constitute a make-whole fundamental change (as defined in the indenture) occur, then the conversion rate will, in certain circumstances, be increased for a specified period of time. As of June 30, 2026 and December 31, 2025, we were in compliance with applicable covenants under the indenture governing the 2031 Notes. International Manufacturing Expansion On February 27, 2022, we announced the selection of KAEC in Saudi Arabia as the location of our first international manufacturing plant and signed related agreements with the MISA, the SIDF, and the Economic City at KAEC. We started the AMP-2 operations with re-assembly of the Lucid Air vehicle “kits” pre-manufactured in the U.S. and we expect to commence production of complete vehicles in 2027. 56 SIDF Loan Agreement On February 27, 2022, Lucid LLC entered into the SIDF Loan Agreement with SIDF, a related party of the PIF, which is an affiliate of Ayar. Under the SIDF Loan Agreement, SIDF has committed to provide SIDF Loans to Lucid LLC in an aggregate principal amount of up to SAR 5.19 billion (approximately $1.4 billion); provided that SIDF may reduce the availability of SIDF Loans under the facility in certain circumstances. SIDF Loans will be subject to repayment in semi-annual installments in amounts ranging from SAR 25 million (approximately $6.7 million) to SAR 350 million (approximately $93.2 million). SIDF Loans are financing and will be used to finance certain costs in connection with the development and construction of AMP-2. Lucid LLC may repay SIDF Loans earlier than the maturity date without penalty. Obligations under the SIDF Loan Agreement do not extend to us or any of our other subsidiaries. SIDF Loans will not bear interest. Instead, Lucid LLC will be required to pay SIDF service fees, consisting of follow-up and technical evaluation fees, ranging, in aggregate, from SAR 415 million (approximately $110.5 million) to SAR 1.77 billion (approximately $471.1 million), over the term of the SIDF Loans. SIDF Loans will be secured by security interests in the equipment, machines and assets funded thereby. The SIDF Loan Agreement contains certain restrictive financial covenants and imposes annual caps on Lucid LLC’s payment of dividends, distributions of paid-in capital, or certain capital expenditures. The SIDF Loan Agreement also defines customary events of default, including abandonment of or failure to commence operations at the plant in KAEC, and drawdowns under the SIDF Loan Agreement are subject to certain conditions precedent. As of June 30, 2026 and December 31, 2025, no amount was outstanding under the SIDF Loan Agreement. MISA Agreements In February 2022, Lucid LLC entered into agreements with MISA, a related party of the PIF, which is an affiliate of Ayar, pursuant to which MISA has agreed to provide economic support for certain capital expenditures in connection with Lucid LLC’s ongoing design and construction of AMP-2. The support by MISA is subject to Lucid LLC’s completion of certain milestones related to the construction and operation of AMP-2. Following the commencement of construction, if operations at the plant do not commence within 30 months, or if the agreed scope of operations is not attained within 55 months, MISA may suspend availability of subsequent support. Pursuant to the agreements, MISA has the right to require Lucid LLC to transfer the ownership of AMP-2 to MISA, at the fair market value thereof, reduced by an amortized value of the support provided in the event of customary events of default including abandonment or material and chronically low utilization of AMP-2. 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 CBU operations at AMP-2 at the latest. During the year ended December 31, 2023, we received support of SAR 366 million (approximately $97.5 million) in cash. As of December 31, 2024, we recorded $97.5 million as a deduction in calculating the carrying amount of the related assets in the consolidated balance sheet. During the year ended December 31, 2025 and three and six months ended June 30, 2026, there were no further deductions to the carrying value of the related assets in the condensed consolidated balance sheets. There were no unfulfilled conditions and contingencies attached to the payments received. GIB Facility Agreement 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 the PIF, which is an affiliate of Ayar. The GIB Facility Agreement provided for two committed revolving credit facilities in an aggregate principal amount of SAR 1.0 billion (approximately $266.1 million). On March 12, 2023, Lucid LLC entered into the 2023 Amended GIB Facility Agreement to combine the two committed revolving credit facilities into a committed SAR 1.0 billion (approximately $266.1 million) 2023 GIB Credit Facility which may be used for general corporate purposes. Loans under the 2023 Amended GIB Facility Agreement had a maturity of no more than 12 months and bore interest at a rate of 1.40% per annum over SAIBOR (based on the term of borrowing) and associated fees. Under the 2023 Amended GIB Facility Agreement, we were required to pay a quarterly commitment fee of 0.15% per annum based on the unutilized portion of the 2023 GIB Credit Facility. On February 24, 2025, Lucid LLC entered into the 2025 GIB Credit Facility maturing on February 24, 2028 to increase the credit facility committed amount from SAR 1.0 billion (approximately $266.1 million) to SAR 1.9 billion (approximately $505.7 million). Loans under the 2025 GIB Credit Facility may be used for general corporate purposes, have a maturity of no more than 12 months, and bear interest at a rate of 1.40% per annum over SAIBOR (based on the term of borrowing) and associated fees. We are required to pay a quarterly commitment fee of 0.25% per annum based on the unutilized portion of the 2025 GIB Credit Facility. Commitments under the 2025 GIB Credit Facility will terminate, and all amounts then outstanding thereunder would become payable, on the maturity date of the 2025 GIB Credit Facility. The 2025 GIB Credit Facility contains certain conditions precedent to drawdowns, representations and warranties and covenants of Lucid LLC and events of default. 57 As of June 30, 2026 and December 31, 2025, we had outstanding borrowings of SAR 1,890.0 million (approximately $503.1 million) and SAR 1,755.0 million (approximately $468.0 million), respectively. The outstanding borrowings were recorded within current portion of debt in the condensed consolidated balance sheets. The weighted average interest rate on the outstanding borrowings was 6.18% and 6.44% as of June 30, 2026 and December 31, 2025, respectively. As of June 30, 2026 and December 31, 2025, availability under the GIB credit facility was SAR 8.7 million (approximately $2.3 million) and SAR 143.5 million (approximately $38.3 million), respectively, after giving effect to the outstanding letters of credit. As of June 30, 2026 and December 31, 2025, we were in compliance with applicable covenants under the GIB credit facility. ABL Credit Facility In June 2022, we 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. Borrowings under the ABL Credit Facility bear interest at the applicable interest rates specified in the credit agreement governing the ABL Credit Facility. In June 2024, we amended the ABL Credit Facility to update the Canadian reference rate. Availability under the ABL Credit Facility is subject to the value of eligible assets in the borrowing base and is reduced by outstanding loan borrowings and issuances of letters of credit which bear customary letter of credit fees. Subject to certain terms and conditions, we may request one or more increases in the amount of credit commitments under the ABL Credit Facility in an aggregate amount up to the sum of $500.0 million plus certain other amounts. We are required to pay a quarterly commitment fee of 0.25% per annum based on the unutilized portion of the ABL Credit Facility. The ABL Credit Facility contains customary covenants that limit our ability and the ability of our restricted subsidiaries to, among other activities, pay dividends, incur debt, create liens and encumbrances, redeem or repurchase stock, dispose of certain assets, consummate acquisitions or other investments, prepay certain debt, engage in transactions with affiliates, engage in sale and leaseback transactions or consummate mergers and other fundamental changes. The ABL Credit Facility also includes a minimum liquidity covenant which, at our option following satisfaction of certain pre-conditions, may be replaced with a springing, minimum fixed charge coverage ratio financial covenant, in each case on terms set forth in the credit agreement governing the ABL Credit Facility. As of June 30, 2026 and December 31, 2025, we were in compliance with applicable covenants under the ABL Credit Facility. As of June 30, 2026 and December 31, 2025, we had no outstanding borrowings under the ABL Credit Facility. Outstanding letters of credit under the ABL Credit Facility were $136.2 million and $104.1 million as of June 30, 2026 and December 31, 2025, respectively. Availability under the ABL Credit Facility was $413.3 million (including $142.9 million cash and cash equivalents) and $596.0 million (including $199.2 million cash and cash equivalents) as of June 30, 2026 and December 31, 2025, respectively, after giving effect to the borrowing base and the outstanding letters of credit. DDTL Credit Facility In August 2024, we entered into the DDTL Credit Facility with Ayar that may be used for working capital and general corporate purposes. The DDTL Credit Facility provides for a delayed draw term loan credit facility in an aggregate principal amount of $750.0 million and has a stated maturity date of August 4, 2029. Borrowings under the DDTL Credit Facility bear interest at the applicable interest rates specified in the credit agreement governing the DDTL Credit Facility. In November 2025, we increased the aggregate principal amount of the DDTL Credit Facility from $750.0 million to $1.98 billion. In April 2026, we borrowed $500.0 million under the DDTL Credit Facility. In April 2026, we also entered into the DDTL Amendment, pursuant to which the aggregate undrawn delayed commitments under the DDTL Credit Facility were increased by $500.0 million, such that, after giving effect to such increase, the aggregate sum of outstanding delayed draw term loans and aggregate undrawn commitments was increased to approximately $2.48 billion. In July 2026, we borrowed an additional $800.0 million under the DDTL Credit Facility. We are required to pay a quarterly undrawn fee of 0.50% per annum based on the unutilized portion of the DDTL Credit Facility. The DDTL Credit Facility contains customary covenants that limit our ability and the ability of our restricted subsidiaries to, among other activities, pay dividends, incur debt, create liens and encumbrances, redeem or repurchase stock, dispose of certain assets, consummate acquisitions or other investments, prepay certain debt, engage in sale and leaseback transactions or consummate mergers and other fundamental changes. The DDTL Credit Facility also included a minimum liquidity covenant, which was eliminated under the DDTL Amendment. The DDTL Amendment also removed the requirement that we fully utilize the borrowing availability under the ABL Credit Facility prior to making borrowings under the DDTL Credit Facility. As of June 30, 2026 and December 31, 2025, we were in compliance with applicable covenants under the DDTL Credit Facility. As of June 30, 2026 and December 31, 2025, we had outstanding borrowings of $500.0 million and nil, respectively, under the DDTL Credit Facility. The outstanding borrowings were recorded within debt, net of current portion in the condensed consolidated balance sheet. The interest rate on the outstanding borrowings was 9.54% as of June 30, 2026. As of June 30, 2026 and December 31, 2025, availability under the DDTL Credit Facility was $1.98 billion. 58 Subscription Agreements and Underwriting Agreements In March 2024, we issued 100,000 shares of our Series A Redeemable Convertible Preferred Stock to Ayar pursuant to the Series A Subscription Agreement and received aggregate net proceeds of $997.6 million after deducting issuance costs. In August 2024, we issued 75,000 shares of our Series B Redeemable Convertible Preferred Stock to Ayar pursuant to the Series B Subscription Agreement and received aggregate net proceeds of $749.4 million after deducting issuance costs. In April 2026, we also issued 55,000 shares of our Series C Redeemable Convertible Preferred Stock to Ayar pursuant to the Series C Subscription Agreement and received aggregate net proceeds of $548.9 million after deducting issuance costs. See Note 7 “Redeemable Convertible Preferred Stock” to the condensed consolidated financial statements included elsewhere in this Quarterly Report, for more information. In October 2024, we completed the public offering pursuant to the 2024 Underwriting Agreement and received net proceeds of $718.4 million and also consummated the private placement of shares to Ayar pursuant to the 2024 Subscription Agreement for net proceeds of $1,025.7 million after deducting issuance costs. See Note 15 “Related Party Transactions” to the condensed consolidated financial statements included elsewhere in this Quarterly Report, for more information. In April 2026, we also completed the public offering pursuant to the 2026 Underwriting Agreement for aggregate net proceeds of $291.5 million. See Note 8 “Stockholder’s Equity” to the condensed consolidated financial statements included elsewhere in this Quarterly Report, for more information. In September 2025, we consummated the private placement of shares to SMB pursuant to the 2025 Subscription Agreement for aggregate net proceeds of $299.7 million after deducting issuance costs. In April 2026, we also consummated the private placement of shares to SMB pursuant to the 2026 Subscription Agreement for aggregate net proceeds of $199.8 million after deducting issuance costs. See Note 8 “Stockholders’ Equity” to the condensed consolidated financial statements included elsewhere in this Quarterly Report, for more information. We have generated significant losses from our operations as reflected in our accumulated deficit of $17.7 billion and $15.6 billion as of June 30, 2026 and December 31, 2025, respectively. Additionally, we have generated significant negative cash flows from operations and investing activities as we continue to support the growth of our business. The expenditures associated with the development and commercial launch of our vehicles, the anticipated increase in manufacturing capacity, and the international expansion of our business operations are subject to significant risks and uncertainties, many of which are beyond our control, and therefore, may affect the timing and magnitude of these anticipated expenditures. These risk and uncertainties are described in more detail in the section entitled “Risk Factors” in Part II, Item 1A of this Quarterly Report. Cash Flows The following table summarizes our cash flows for the periods presented (in thousands): Six Months Ended June 30, 2026 2025 Cash used in operating activities $ (2,407,890) $ (1,258,854) Cash provided by investing activities 592,847 1,308,024 Cash provided by financing activities 1,581,096 141,676 Net increase (decrease) in cash, cash equivalents, and restricted cash $ (233,947) $ 190,846 Cash Used in Operating Activities Our cash flows used in operating activities to date have been primarily comprised of cash outlays to support overall growth of the business, especially the costs related to inventory and sale of our vehicles, costs related to research and development, payroll and other general and administrative activities. As we continue to ramp up after starting commercial operations, we expect our cash used in operating activities to increase before it starts to generate any material cash flows from our business. Net cash used in operating activities increased by $1,149.0 million to $2,407.9 million during the six months ended June 30, 2026, as compared to the same period in the prior year. The increase was primarily due to increases in net operating assets and liabilities of $688.4 million and net loss excluding non-cash expenses and gains of $460.6 million during the six months ended June 30, 2026, as compared to the same period in the prior year. The increase in net operating assets and liabilities was primarily attributable to higher inventory purchases driven by the Lucid Gravity production ramp-up. 59 Cash Provided by Investing Activities Our cash flows provided by investing activities primarily relate to proceeds from sales and maturities of investments, net of purchases of investments and capital expenditures to support our growth. Net cash provided by investing activities decreased by $715.2 million to $592.8 million during the six months ended June 30, 2026, as compared to the same period in the prior year. The decrease was primarily attributable to lower volume of investment sales and maturities compared to investment purchases during the six months ended June 30, 2026, as compared to the same period in the prior year. Cash Provided by Financing Activities We have financed our operations primarily from the issuances of equity and equity-linked securities and debt financings, the private placements to Ayar and SMB, convertible preferred stock, the proceeds of the Merger, the 2026 Notes, the 2030 Notes, and the 2031 Notes. Net cash provided by financing activities increased by $1,439.4 million to $1,581.1 million during the six months ended June 30, 2026, as compared to the same period in the prior year. We received net proceeds of $549.3 million from the issuance of Series C Redeemable Convertible Preferred Stock, $500.0 million from borrowings from the DDTL Credit Facility, $291.9 million from issuance of common stock under 2026 Underwriting Agreement and $200.0 million from issuance of common stock under 2026 Subscription Agreement during the six months ended June 30, 2026. We received net proceeds of $1.1 billion from the issuance of the 2030 Notes and repurchased a portion of the 2026 Notes using $931.4 million during the six months ended June 30, 2025. Recently Issued Accounting Pronouncements Not Yet Adopted In November 2024, the FASB issued ASU 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses, which requires disclosure of specified information about certain costs and expenses (such as purchases of inventory, employee compensation, depreciation, and amortization) within the relevant expense captions presented on the face of the statements of operations and comprehensive loss. The guidance is effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods within annual reporting periods beginning after December 15, 2027. Early adoption is permitted, and should be applied either prospectively or retrospectively. We are evaluating the impact of this amendment to the related financial statement disclosures. In September 2025, the FASB issued ASU 2025-06, Intangibles – Goodwill and Other – Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software. The ASU removed references to prescriptive and sequential software development stages. The ASU requires us to start capitalizing eligible software costs when management has authorized and committed to funding the software project, and it is probable that the project will be completed and the software will be used to perform the function intended. The ASU does not change the types of costs eligible for capitalization. The guidance is effective for annual reporting periods beginning after December 15, 2027, and interim reporting periods within those annual reporting periods. Early adoption is permitted and may be applied using a prospective, retrospective or modified transition approach. We are evaluating the impact of this amendment to the financial statements. In December 2025, the FASB issued ASU 2025-10, Government Grants (Topic 832): Accounting for Government Grants Received by Business Entities. The ASU requires us to recognize a government grant when it is probable that we will comply with the conditions attached to the grant and the grant will be received, and we meet the recognition guidance for a grant related to an asset or a grant related to income. The ASU requires a grant related to an asset to be recognized as we incur the related costs for which the grant is intended to compensate, either as deferred income or as an adjustment to the cost basis in determining the carrying amount of the asset. The ASU also requires a grant related to income and a grant related to an asset for which the deferred income approach is elected to be recognized in earnings on a systematic and rational basis. When we elect the cost accumulation approach for a grant related to an asset, there is no separate subsequent recognition of the government grant proceeds in earnings. We are required to continue providing disclosures on the nature of the government grant received, the accounting policies used to account for the grant, and significant terms and conditions of the grant. The guidance is effective for annual reporting periods beginning after December 15, 2028, and interim reporting periods within those annual reporting periods. Early adoption is permitted, and may be applied using a modified prospective, modified retrospective or retrospective approach. We are evaluating the impact of this amendment to the financial statements. In December 2025, the FASB issued ASU 2025-11, Interim Reporting (Topic 270): Narrow-Scope Improvements. The ASU provides clarity on the current interim reporting disclosures and introduces a disclosure principle which requires us to disclose events since the end of the last annual reporting period that have a material impact on us. The guidance is effective for interim reporting periods within annual reporting periods beginning after December 15, 2027. Early adoption is permitted and may be applied using a prospective or retrospective approach. We are evaluating the impact of this amendment to the financial statements. 60 In December 2025, the FASB issued ASU 2025-12, Codification Improvements. The ASU represents changes to the Codification that clarify, correct errors, or make minor improvements. The guidance is effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods within those annual reporting periods. Early adoption is permitted and we may elect the transition method on an issue-by-issue basis. We are evaluating the impact of this amendment to the financial statements. In April 2026, the FASB issued ASU 2026-01, Equity (Topic 505): Initial Measurement of Paid-in-Kind Dividends on Equity-Classified Preferred Stock, which requires that paid-in-kind (“PIK”) dividends on equity-classified preferred stock, including preferred stock that is classified as temporary equity, be initially measured on the basis of the PIK dividend rate stated in the preferred stock agreement. The guidance is effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods within those annual reporting periods. Early adoption is permitted and may be applied using a prospective or modified retrospective approach. We are evaluating the impact of this amendment to the financial statements. In May 2026, the FASB issued ASU 2026-02, Environmental Credits and Environmental Credit Obligations (Topic 818), which establishes recognition, measurement, presentation and disclosure requirements for environmental credits and environmental credit obligations. The guidance is effective for annual reporting periods beginning after December 15, 2027, and interim reporting periods within those annual reporting periods. Early adoption is permitted, and should be applied retrospectively. We are evaluating the impact of this amendment to the related financial statement disclosures. We have considered all other recently issued accounting pronouncements and do not believe the adoption of such pronouncements will have a material impact on our financial statements or notes thereto. Critical Accounting Estimates The condensed consolidated financial statements and the related notes thereto included elsewhere in this Quarterly Report are prepared in accordance with U.S. GAAP. The preparation of our condensed consolidated financial statements requires us to make estimates and assumptions that affect the reported amounts and related disclosures in our financial statements and accompanying notes. We base our estimates on historical experience and on various other factors that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions due to the inherent uncertainty involved in making those estimates and any such differences may be material. We believe that the following accounting policies involve a high degree of judgment and complexity. Accordingly, these are the policies we believe are the most critical to aid in fully understanding and evaluating our condensed consolidated financial condition and results of our operations. Revenue Recognition We follow a five-step process in which we identify the contract, identify the related performance obligations, determine the transaction price, allocate the transaction price to the identified performance obligations, and recognize revenue when (or as) the performance obligations are satisfied. Vehicle Sales Vehicle sales revenue is generated from the sale of EVs to customers. The performance obligations identified in vehicle sale arrangements include delivery of the vehicle equipped with an onboard ADAS, the provision of maintenance services, the remarketing activities, and the right to unspecified OTA software updates as they become available over the term of the basic vehicle warranty, which is generally four years. Shipping and handling provided by us is considered a fulfillment activity. Payment is typically received at the time of delivery or shortly after delivery 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. Our vehicle contracts do not contain a significant financing component. We have elected to exclude sales taxes from the measurement of the transaction price. We estimate the standalone selling price of all performance obligations by considering costs used to develop and deliver the good or service, third-party pricing of similar goods or services and other information that may be available. The transaction price is allocated among the performance obligations in proportion to the standalone selling price of our performance obligations. 61 We recognize revenue related to the vehicle when the customer obtains control of the vehicle which occurs at a point in time either upon completion of delivery to the agreed-upon delivery location or upon pick up of the vehicle by the customer. 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. Payments received before the customer obtains control of the vehicle are recorded within other current liabilities in the condensed consolidated balance sheets. 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 returns. Such return rate estimates are based on historical experience. We provide a manufacturer’s warranty on all vehicles sold. The warranty covers the rectification of reported defects via repair, replacement, or adjustment of faulty parts or components. The warranty does not cover any item where failure is due to normal wear and tear. This assurance-type warranty does not create a performance obligation separate from the vehicle. The estimated cost of the assurance-type warranty is accrued at the time of vehicle sale. We provide a residual value guarantee to our commercial banking partners in connection with their vehicle leasing programs. Under the vehicle leasing program, we do not bear casualty and credit risks during the lease term, and are contractually obligated (or entitled) to share a portion of the shortfall (or excess) between the resale value realized by the commercial banking partners and a predetermined resale value. At the lease inception, we are required to deposit cash collateral equal to a contractual percentage of the residual value of the leased vehicles with the commercial banking partners. The cash collateral is held in a restricted bank account owned by the commercial banking partner until it is used, as applicable, in settlement of the RVG at the end of the lease term. Cash collateral is recorded in other noncurrent assets, subject to an asset impairment review at each reporting period. We account for the vehicle leasing program in accordance with ASC 842, Leases, ASC 460, Guarantees and ASC 606, Revenue from Contracts with Customers . We are the lessor at inception of a lease and immediately transfer the lease as well as the underlying vehicle to our commercial banking partners, with the transaction being accounted for as a sale under ASC 606. We recognize revenue when control transfers upon delivery when the consumer-lessee takes physical possession of the vehicle, and bifurcate the RVG at fair value and account for it as a reduction to revenue and a guarantee liability. The remaining amount of the transaction price is allocated among the performance obligations. Any fees or incentives that are paid or payable by us to commercial banking partners are recognized as a reduction to vehicle sales revenue. The guarantee liability represents the estimated amount we expect to pay at the end of the lease term. We are released from residual risk upon either expiration or settlement of the RVG. We evaluate 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. RVG liability is assessed subsequently for any changes on a quarterly basis. 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. The maximum potential amount of future payments (in excess of RVG liabilities recorded) that we could be required to make was $724.5 million and $705.9 million as of June 30, 2026 and December 31, 2025, respectively. Vehicle Operating Lease Revenue We account for sales of vehicles with repurchase obligations as operating leases. We sell vehicles primarily to rental companies with an obligation to repurchase the vehicles at an agreed-upon repurchase price. We record the difference between the proceeds received and the agreed-upon repurchase price as vehicle leasing revenue on a straight-line basis over the term of the lease. Deferred leasing revenue and repurchase obligation were recorded in other current liabilities and other long-term liabilities in the condensed consolidated balance sheets. Sale and Leaseback Transactions We enter into sale and leaseback transactions in which we transfer control of vehicles to rental companies and simultaneously lease them back as operating leases. We recognize revenue related to the vehicles under the arrangement when the rental companies obtain control of the vehicles and separately recognize the leaseback obligations based on the present value of the future payments to the rental companies within other current liabilities and other long-term liabilities. We also record right-of-use assets which are amortized over the term of the leaseback. Operating lease expense is recognized on a straight-line basis over the term of the leaseback. Inventory Valuation Inventories are stated at the lower of cost or net realizable value. Cost is computed using standard cost for vehicles, which approximates actual cost on a first-in, first-out basis. We record 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 and market conditions, the excess amounts are written-off. 62 Inventory is also 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. Once inventory is written down, a new lower cost basis for that inventory is established and subsequent changes in facts and circumstances do not result in the restoration or increase in that newly established cost basis. In the event there are changes in our estimates of future selling prices or production costs, we might be required to record additional and potentially material write-downs. A small change in our estimates may result in a material change in our reported financial results. We periodically review and record write-downs for excess or obsolete inventories based upon assumptions about current and future demand forecasts, considering shelf-life and technological obsolescence of certain inventories. Our current and future demand forecasts are based on our historical sales, market share performance, macroeconomic factors and trends in quantities or prices of orders for our products. We evaluate whether raw materials are approaching the end of their shelf-lives or becoming technologically obsolete, and the likelihood that we will be able to use the raw materials in production. If our inventory on-hand is in excess of future demand forecast and market conditions, the excess amounts are provisioned or written-down. Redeemable Convertible Preferred Stock Accounting for the redeemable convertible preferred stock requires an evaluation to determine if liability classification is required under ASC 480-10. Liability classification is required for freestanding financial instruments that are (1) subject to an unconditional obligation requiring the issuer to redeem the instrument by transferring assets, such as those that are mandatorily redeemable, (2) instruments other than equity shares that embody an obligation of the issuer to repurchase its equity shares, or (3) certain types of instruments that obligate the issuer to issue a variable number of equity shares. Securities that do not meet the scoping criteria to be classified as a liability under ASC 480 are subject to redeemable equity guidance, which prescribes securities that may be subject to redemption upon an event not solely within the control of the issuer to be classified as temporary equity. Securities classified in temporary equity are initially measured at the proceeds received, net of issuance costs and excluding the fair value of bifurcated embedded derivatives, and change in fair value of the redeemable convertible preferred stock contract as measured upon settlement based on the difference between the fair value of the redeemable convertible preferred stock at issuance versus the cash purchase price negotiated at fair value at contract inception, if any. Subsequent measurement of the carrying value of the redeemable convertible preferred stock is required as the instrument is probable of becoming redeemable. We accrete the redeemable convertible preferred stock to its redemption value. In certain circumstances, the redemption price may vary based on changes in stock price, in which case we will recognize changes in the redemption value immediately as they occur and adjust the carrying value of the security to equal the then current maximum redemption value at the end of each reporting period. Derivative Liabilities In connection with the issuance of the redeemable convertible preferred stock, we evaluated the instruments for any features that must be bifurcated and separately accounted for as embedded derivatives. We concluded that the conversion features, inclusive of all settlement outcomes where the pay-off is indexed to the if-converted value, meets all the requirements to be separately accounted for as a bifurcated derivative. As a result, we bifurcated the redeemable convertible preferred stock between (i) the host contracts which are accounted for within mezzanine equity, and (ii) the bifurcated derivative liabilities. The proceeds from issuance are first allocated to the fair value of the bifurcated derivatives with the residual being allocated to the host contracts. The bifurcated derivatives are remeasured to fair value each reporting period with changes in fair value recorded in earnings. We estimated the fair value of the derivative liabilities using a binomial lattice model. Inherent in a binomial lattice model are unobservable inputs and assumptions. The inputs for the valuation of the derivative liabilities included the volatility, credit spread, and term. Assumptions used in the valuation also consider the contractual terms as well as the quoted price of our common stock in an active market. Significant changes in any of those inputs in isolation would result in significant changes to the fair value measurement. We remeasure the derivative liabilities at each reporting period and recognize the changes in fair value in the condensed consolidated statement of operations and comprehensive loss. 63 Item 3. Quantitative and Qualitative Disclosures about Market Risk. We are exposed to market risks in the ordinary course of our business. Market risk represents the risk of loss that may impact our financial position due to adverse changes in financial market prices and rates. Our market risk exposure is primarily the result of fluctuations in interest rates, equity price and inflationary pressure. Interest Rate Risk We are exposed to market risk for changes in interest rates applicable to our cash and cash equivalents, and investments. We had cash, cash equivalents, and investments totaling approximately $775.5 million as of June 30, 2026. Our investment policy is focused on the preservation of capital and supporting our liquidity needs. Under the policy, we invest in highly rated securities, primarily issued by the U.S. government or liquid money market funds. We do not invest in financial instruments for trading or speculative purposes. We utilize external investment managers who adhere to the guidelines of our investment policy. A hypothetical 100 basis point increase in interest rates would not be material to the fair market value of our portfolio as of June 30, 2026. Equity Price Risk We hold equity securities of Aston Martin. The fair value of these equity securities was $14.2 million as of June 30, 2026. Changes in fair value of these equity securities are impacted by the volatility of the stock market and changes in general economic conditions, among other factors. A hypothetical 10% decrease in the stock price of these equity securities would not be material as of June 30, 2026. Supply Risk We are dependent on our suppliers, the majority of which are single-source suppliers. The inability or unwillingness of these suppliers to deliver necessary components of our products according to the schedule and at prices, quality levels and volumes acceptable to us, whether due to changes or uncertainties in trade policies, the imposition or proposed imposition of tariffs, threat of a trade war or otherwise, or its inability to efficiently manage these components, or the unavailability of stable domestic suppliers, could have a material adverse effect on our results of operations and financial condition. 64 Item 4. Controls and Procedures. Evaluation of Disclosure Controls and Procedures Our management, with the participation of our principal executive officer and principal financial officer, evaluated the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of the end of the period covered by this Quarterly Report on Form 10-Q. Based on their evaluation, our principal executive officer and principal financial officer concluded that as of June 30, 2026, our disclosure controls and procedures are designed to, and are effective to, provide reasonable assurance that the information we are required to disclose in reports we file or submit under the Exchange Act is (i) recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms, and (ii) accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosure. Changes in Internal Control Over Financial Reporting There were no changes in our internal control over financial reporting (as defined in Rule 13a-15(f) and 15d-15(f) under the Exchange Act) that occurred during the fiscal quarter ended June 30, 2026, that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting. Limitations on Effectiveness of Controls and Procedures In designing and evaluating the disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives. In addition, the design of disclosure controls and procedures must reflect the fact that there are resource constraints and that management is required to apply its judgment in evaluating the benefits of possible controls and procedures relative to their costs. 65 PART II - OTHER INFORMATION Item 1. Legal Proceedings. For a description of our legal proceedings, please see the description set forth in the “Legal Matters” section in Note 11 “Commitments and Contingencies” in the notes to the condensed consolidated financial statements in Item 1 of Part I of this Quarterly Report, which is incorporated herein by reference. Item 1A. Risk Factors. A description of the risks and uncertainties associated with our business is set forth below. Investors should carefully consider the risks and uncertainties described below, as well as the other information in this Quarterly Report, including our condensed consolidated financial statements and the related notes and “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” The occurrence of any of the events or developments described below, or of additional risks and uncertainties not presently known to us or that we currently deem immaterial, could materially and adversely affect our business, results of operations, financial condition and growth prospects. In such an event, the market price of our common stock could decline, and our stockholders could lose all or part of their investment. Risk Factor Summary Our business is subject to numerous risks and uncertainties, including those highlighted in this section titled Item 1A. “Risk Factors,” that represent challenges that we face in connection with the successful implementation of our strategy and growth of our business. The occurrence of one or more of the events or circumstances described in this section titled Item 1A. “Risk Factors,” alone or in combination with other events or circumstances, may have an adverse effect on our business, cash flows, financial condition and results of operations. Such risks include, but are not limited to: • Our limited operating history makes evaluating our business and future prospects difficult and may increase the risk of stockholders’ investment. • We have incurred net losses each year since our inception and expect to incur increasing expenses and substantial losses for the foreseeable future. • We may be unable to adequately control the substantial costs associated with our operations. • Failure to attract or retain customers through the purchase process may have a material adverse impact on our business, prospects, results of operations and financial condition. • A global economic recession, downturn or other adverse economic conditions may have a material adverse impact on our business, prospects, results of operations and financial condition. • We currently depend primarily on revenue generated from a limited number of models and anticipate continuing to be significantly dependent on a limited number of models in the foreseeable future. • Our business and prospects depend significantly on our brand. • Our distribution model primarily relies on a direct-to-consumer strategy domestically, and we are pursuing alternative distribution models internationally where we have less experience. • We face challenges providing charging solutions for our vehicles, both domestically and internationally. • If we fail to manage our growth effectively, we may not be able to develop, manufacture, distribute, market and sell our vehicles successfully. • We face risks associated with international operations, including possible unfavorable regulatory, geopolitical, tax and labor conditions, which could adversely affect our business. • The automotive industry has significant barriers to entry that we must overcome in order to manufacture and sell EVs at scale. • The automotive market is highly competitive, and we may not be successful in competing in this industry. • We have experienced and may in the future experience significant delays in the design, launch and manufacture of our vehicles, including the Lucid Air, the Lucid Gravity and our upcoming Midsize platform, which could harm our business and prospects. • Our ability to continue production and grow depends upon our ability to maintain relationships with our existing suppliers and source suppliers for our critical components, and to complete building out our supply chain, while effectively managing the risks due to such relationships. • We are dependent on our suppliers, the majority of which are single-source suppliers, and the inability or unwillingness of these suppliers to deliver necessary components of our products, or our inability to efficiently manage these components, could have a material adverse effect on our results of operations and financial condition. 66 • Changes in costs, changes of supply or shortage of materials, in particular for lithium-ion battery cells, could harm our business. • If we fail to successfully construct or tool our manufacturing facilities or if our manufacturing facilities become inoperable, we will be unable to produce our vehicles and our business will be harmed. • We have limited experience in high volume manufacture of our vehicles. • If our vehicles fail to perform as expected, our ability to develop, market and sell or lease our products could be harmed. • We have limited experience servicing our vehicles and their integrated software. If we or our partners are unable to adequately service our vehicles, our business, prospects, financial condition and results of operations may be materially and adversely affected. • Insufficient reserves to cover future warranty or part replacement needs or other vehicle repair requirements, including any potential software upgrades, could materially adversely affect our business, prospects, financial condition and results of operations. • We may not be able to accurately estimate the supply and demand for our vehicles, which could prevent us from maximizing our revenue. If we fail to accurately predict our manufacturing requirements, we could incur additional costs or experience delays. • Any unauthorized compromise of or access to our products or information technology systems or networks could result in loss of confidence in us and our products, harm our business and materially adversely affect our financial performance, results of operations or prospects. • We are subject to evolving laws, regulations, standards, policies, and contractual obligations related to data privacy, cybersecurity, and artificial intelligence, and failure to comply with such obligations could harm our reputation, subject us to significant fines and liability, or otherwise adversely affect our business. • The loss of key employees or an inability to attract, retain and motivate qualified personnel, including executive leadership, may impair our ability to expand our business. • Changes in U.S. trade policy, including the imposition of, or uncertainties surrounding, tariffs or revocation of normal trade relations and the resulting consequences, could adversely affect our business, prospects, results of operations and financial condition. • We are subject to laws and regulations that could impose substantial costs, legal prohibitions or unfavorable changes upon our operations or products, and any failure to comply with these laws and regulations, including as they evolve, could substantially harm our business and results of operations. • We may face regulatory limitations on our ability to sell vehicles directly, which could materially and adversely affect our ability to sell our vehicles. • We may fail to adequately obtain, maintain, enforce, defend and protect our intellectual property and may not be able to prevent third parties from unauthorized use of our intellectual property and proprietary technology, which could harm our competitive position and cause us to incur significant expenses to enforce our rights. • We will require additional capital to support business growth, and this capital might not be available on commercially reasonable terms, or at all. • We may not be able to realize the anticipated benefits of our agreements with Aston Martin, Uber, and Nuro. • If we identify material weaknesses or otherwise fail to maintain an effective system of internal control over financial reporting, we may not be able to accurately or timely report our financial condition or results of operations, which may adversely affect investor confidence in us and the value of our common stock. • The issuance of additional shares of our common stock or other equity or equity-linked securities, including upon conversion, optional redemption or repurchase of convertible securities, or sales of a significant portion of our common stock, could depress the market price of our common stock. • We are a “controlled company” within the meaning of the applicable Nasdaq rules and, as a result, qualify for exemptions from certain corporate governance requirements. Our stockholders do not have the same protections afforded to stockholders of companies that are not controlled companies. • The PIF and Ayar beneficially own a significant equity interest in us and have significant influence over us. • Our Redeemable Convertible Preferred Stock has rights, preferences and privileges that are not held by, and are senior to the rights of, our common stockholders. 67 Risks Related to Our Business and Operations Our limited operating history makes evaluating our business and future prospects difficult and may increase the risk of stockholders’ investment. We have a limited operating history and operate in a rapidly evolving and highly regulated market. Furthermore, we have only released two commercially available vehicles, and we have limited experience manufacturing or selling a commercial product at scale. We have encountered and expect to continue to encounter risks and uncertainties frequently experienced by companies in rapidly changing markets, including risks relating to our ability to, among other things: • hire, integrate and retain professional and technical talent, including key members of management; • continue to make significant investments in research, development, manufacturing, marketing and sales; • successfully design, build, manufacture and market new variants and models of EVs, such as our upcoming Midsize platform; • build a well-recognized and respected brand; • establish, implement, refine and scale our commercial manufacturing capabilities and distribution infrastructure; • establish and maintain satisfactory arrangements with third-party suppliers; • establish and expand our customer base; • anticipate and adapt to changing market conditions, including consumer demand for certain vehicle types, models or trim levels, technological developments and changes in competitive landscape; • navigate an evolving and complex landscape of regulations, policies, and government incentives; and • successfully obtain, maintain, protect, defend and enforce our intellectual property and defend against claims of intellectual property infringement, misappropriation or other violation. We have incurred net losses each year since our inception and expect to incur increasing expenses and substantial losses for the foreseeable future. We have incurred net losses each year since our inception, including net loss of $1,034.9 million and $2,063.2 million for the three and six months ended June 30, 2026, respectively. As of June 30, 2026, our accumulated deficit was $17.7 billion. As a result of the capital-intensive nature of our business, we expect to continue to incur substantial operating losses in the foreseeable future as we: • continue to design, develop and manufacture our vehicles; • equip and expand our research, service, battery, powertrain, and manufacturing facilities to produce our vehicles in Arizona and in international locations such as Saudi Arabia; • build up inventories of parts and components for our vehicles; • manufacture and store an available inventory of our vehicles; • develop and market EV-related products and technologies, including robotaxis; • develop and deploy geographically dispersed vehicle charging partnerships; • expand our design, research, development, maintenance and repair capabilities and facilities; • increase our sales, service and marketing activities and develop our distribution infrastructure; and • expand into new markets If our product development or commercialization of future vehicles or models is delayed, our costs and expenses may be significantly higher than we currently expect. We will incur the costs and expenses from these efforts before we receive any incremental revenues with respect thereto; therefore, we anticipate our losses in future periods will be significant. 68 We may be unable to adequately control the substantial costs associated with our operations. We require significant capital to develop and grow our business. We have incurred and expect to continue to incur significant expenses, including leases, sales and distribution expenses as we build our brand and market our vehicles; expenses relating to developing and manufacturing our vehicles, constructing, tooling and expanding our manufacturing facilities; research and development expenses (including expenses related to the development of our current and future products, including the upcoming Midsize platform); raw material procurement costs; and general and administrative expenses as we scale our operations and incur the costs of being a public company. Increased competition and adverse economic conditions have in the past and may continue in the future to require us to spend additional resources to attract customers, which in turn may result in higher marketing and incentive expenses. Furthermore, lower production and sales volumes have in the past and may in the future result in an inability to fully utilize our purchase commitments with suppliers which could result in increased costs and excess inventory as well as potential inventory write-offs. We periodically review and record write-downs for excess or obsolete inventories based upon assumptions about current and future demand forecasts, considering shelf-life and technological obsolescence of certain inventories. Our current and future demand forecasts are based on our historical sales, market share performance, macroeconomic factors and trends in quantities or prices of orders for our products. We evaluate whether raw materials are approaching the end of their shelf-lives or becoming technologically obsolete, and the likelihood that we will be able to use the raw materials in production. If our inventory on-hand is in excess of future demand forecast and market conditions, the excess amounts are provisioned or written-down. In addition, we have incurred and expect to continue to incur significant costs servicing and maintaining customers’ vehicles, including establishing our service operations and facilities and undertaking product recalls. We have limited historical experience forecasting and budgeting for any of these expenses, and these expenses could be significantly higher than we currently anticipate. In addition, any disruption to our manufacturing operations, obtaining necessary equipment or supplies, expansion of our manufacturing facilities, or the procurement of permits and licenses relating to our expected manufacturing, sales and distribution model could significantly increase our expenses. In such event, we could be required to seek additional financing earlier than we expect, and such financing may not be available on commercially reasonable terms, or at all. In the longer term, our ability to become profitable will depend on our ability to effectively manage our capital expenditures, control costs on a timely basis, and sell in quantities and at prices sufficient to achieve our expected margins. If we are unable to appropriately price and cost-efficiently design, manufacture, market, sell, distribute and service our vehicles, our margins, profitability and prospects will be materially and adversely affected. Failure to attract customers, failure to complete the purchase process with customers, and customer cancellation of orders may have a material adverse impact on our business, prospects, results of operations and financial condition. Demand and supply in the automobile industry is volatile. A number of factors may impact our ability to attract customers and complete the purchase process, including delays in customer deliveries, delays in the availability of options, potential changes in customer preferences, competitive developments, increased interest rates, negative publicity, loss of government incentives, decreased demand for EVs, and insufficient charging infrastructure. For example, during the first quarter of 2026, deliveries of the Lucid Gravity were disrupted for 29 days due to a supplier quality issue with the second-row seats. As a result of this, our ability to meet customer demand was impacted. Increases in interest rates could make financing unaffordable for segments of our customer base. Any event or incident which generates negative media coverage about us, or the safety or quality of our vehicles, have in the past, and may continue to result in failure to attract customers, failure to complete the purchase process, and customer cancellations. In addition, if we encounter delays in customer deliveries of our vehicles that further lengthen wait times or in the event of negative media coverage, a significant number of orders may be cancelled. As such, no assurance can be given that the purchase process will be completed, orders will not be cancelled, and orders will ultimately result in the final purchase, delivery and sale or lease of vehicles. 69 A global economic recession, downturn or other adverse economic conditions may have a material adverse impact on our business, prospects, results of operations and financial condition. A global economic recession, downturn or other adverse economic conditions, whether due to changes or uncertainties in trade policies, the imposition or proposed imposition of tariffs, export controls, threat of a trade war, persistent inflation, political instability, global or regional conflicts or other geopolitical events, public health crises, interest rate increases or other central bank policy actions, bank closures and liquidity concerns at other financial institutions, or other factors, have in the past and may in the future have an adverse impact on our business, prospects, financial condition and results of operations. If any of our suppliers, sub-suppliers or partners experience financial distress, insolvency or disruptions in operations, they may be unable to fulfill their obligations or meet our production and quality requirements. Adverse economic conditions and uncertainty about the current and future domestic or global economic conditions may also cause our customers to defer purchases or cancel their orders in response to higher interest rates, limited consumer credit availability, lower cash reserves, fluctuations in foreign currency exchange rates, and weakened consumer confidence. A reduction in demand for our products may result in a decline in product sales, with a corresponding material adverse impact on our business, prospects, financial condition and results of operations. Given our premium brand positioning and pricing, an economic recession or downturn is likely to have a disproportionate adverse effect on us compared to our competitors in the EV and traditional automotive sectors, to the extent that consumer demand for luxury goods declines in favor of more cost-conscious alternatives. In addition, adverse economic conditions and uncertainties surrounding trade policies, tariffs and export controls could also cause supply chain and logistical challenges and operational risks. In particular, the U.S. federal government enacted the law commonly referred to as the OBBBA, which eliminates, limits or phases out certain tax credits that had previously provided significant benefits to lessees and purchasers of EVs and adds new eligibility requirements on manufacturers to continue claiming tax credits on EV components. It also eliminates certain penalties for noncompliance with certain fuel efficiency standards and introduces certain key tax law modifications. Taken together, adverse economic conditions and uncertainties surrounding trade policies, government grants or incentives, tariffs and export controls, coupled with supply chain challenges and the potential difficulty of passing costs to customers or sharing the burden with suppliers, could reduce demand for our products and have a material adverse effect on our business, prospects, results of operations and financial condition. In addition, the deterioration of conditions in global credit markets may limit our ability to obtain external financing to fund our operations and capital expenditures for business growth on terms favorable to us, if at all. If we are unable to obtain adequate financing or financing on terms satisfactory to us, when we require it, we will have to significantly reduce our spending, delay or cancel our planned activities or substantially change our corporate structure, and we might not have sufficient resources to conduct or support our business as projected, which would have a material adverse effect on our business, prospects, results of operations, and financial condition. See “—Risks Related to Financing and Strategic Transactions — We will require additional capital to support business growth, and this capital might not be available on commercially reasonable terms, or at all .” We currently depend primarily on revenue generated from a limited number of models and anticipate continuing to be significantly dependent on a limited number of models in the foreseeable future. We currently generate revenue from the Lucid Air and Lucid Gravity, and are expecting to launch the Midsize platform in the near future. For the foreseeable future, we will be significantly dependent on a limited number of models. We expect to rely on sales from our current vehicle models, among other sources of financing, for the capital that will be required to develop and commercialize future models on our product roadmap. To the extent that production of our current or future models is delayed, reduced or retired, or if our current or future models are not well-received by the market for any reason, our revenue and cash flow would be adversely affected, we may need to seek additional financing earlier than we expect, and such financing may not be available to us on commercially reasonable terms, or at all. If we are unable to fulfill the orders from the Government of Saudi Arabia or if the Government of Saudi Arabia purchases significantly fewer vehicles than we anticipate for any reason, our business, prospects, results of operations and financial condition could be materially and adversely affected. In August 2023, we entered into the EV Purchase Agreement with the Government of Saudi Arabia as represented by the Ministry of Finance, which supersedes the letter of undertaking that we entered into in April 2022. Pursuant to the terms of the EV Purchase Agreement, 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 we fail to deliver within six months from the date of the applicable purchase order. The Purchaser also has the sole and absolute discretion to decide whether to exercise the option to purchase the additional 50,000 vehicles. See Note 15 “Related Party Transactions” to the condensed consolidated financial statements included elsewhere in this Quarterly Report for more information. 70 If we experience delays in manufacturing and delivering vehicles ordered by the Purchaser, fail to or experience delays in complying with Saudi Arabian regulations or the requirements of the EV Purchase Agreement, fail to provide adequate service or support for the vehicles, or fail to appropriately price our vehicles, our revenue, cash flow and results of operations and financial condition could be adversely affected. Furthermore, if the Purchaser reduces the minimum vehicle purchase quantity, delays the purchase of vehicles, does not exercise its option to purchase additional vehicles, or purchases significantly fewer vehicles than we currently anticipate for any reason, including for reasons beyond our control, our business, prospects, results of operations and financial condition could be materially and adversely affected. Our business and prospects depend significantly on our brand. Our business and prospects heavily depend on our ab ility to develop, maintain, protect and strengthen the “Lucid” brand association with luxury and technological excellence. Promoting and positioning our brand will likely depend significantly on our ability to provide a consistently high-quality customer experience, an area in which we have gained experience over years but may continue to face challenges. To promote our brand, we will be required to invest in, and over time change our customer development and branding practices, which could result in substantially increased expenses, including the need to use public relations, media, event planning, and advertising firms. Our ability to successfully position our brand could also be adversely affected by perceptions about the quality of our competitors’ vehicles or our competitors’ success. For example, certain of our competitors have been subject to significant scrutiny for incidents involving their self-driving technology and battery fires, which could result in similar scrutiny of us. With social media, any negative publicity, whether or not factual, can quickly be disseminated and harm consumer perception and confidence in our brand. This risk is heightened by our engagement with influencers, as negative experiences by these high-profile users can be rapidly amplified, damaging our brand credibility and impacting brand loyalty. Viral negative posts or negative reviews that highlight quality issues or compare us unfavorably to competitors could adversely affect consumer perception about our vehicles and reduce demand, potentially causing a material adverse effect on our business, results of operations, prospects and financial condition. Thus, failure to correct misinformation or mitigate negative information concerning us, the products we offer, our customer experience, or any aspect of our brand, our business, sales and results of operations could adversely impact us. Our sales will depend in part on our ability to establish and maintain confidence in our long-term business prospects among consumers, the investment community and others within our industry. Consumers may be less likely to purchase our products if they do not believe that our business will succeed or that our operations, including service and customer support operations, will continue for many years. Similarly, suppliers and other third parties will be less likely to invest time and resources in developing business relationships with us if they are not convinced that our business will succeed. Accordingly, to build, maintain and grow our business, we must establish and maintain confidence among customers, suppliers, the investment community and other parties with respect to our liquidity and long-term business prospects. If we are unable to establish or maintain confidence among these parties with respect to our liquidity and long-term business prospects, we may lose our relationships or contracts with such parties and may suffer monetary losses, operational interruption, or damage to our reputation and brand. Maintaining such confidence may be difficult as a result of many factors, including our limited operating history, others’ unfamiliarity with our products, uncertainty regarding the future of EVs, any delays in scaling production or launch of the upcoming Midsize platform, delivery and service operations to meet demand, competition, and our production and sales performance compared with market expectations. Many of these factors are largely outside of our control, and any negative perceptions about our long-term business prospects, even if exaggerated or unfounded, would likely harm our business and make it more difficult to attract customers and raise additional capital in the future. In addition, a significant number of new EV companies have recently entered the automotive industry, which is an industry that has historically been associated with significant barriers to entry and a high rate of failure. Certain of these new entrants or other traditional automotive manufacturers now producing EVs have become insolvent, and if additional manufacturers producing EVs become insolvent or are perceived to likely become insolvent, discontinue production of EVs, produce vehicles that do not perform as expected or otherwise fail to meet expectations, such failures may have the effect of increasing scrutiny of others in the industry, including us, and further challenging customer, supplier and the investment community’s confidence in our long-term prospects. 71 Our distribution model relies on a direct-to-consumer strategy domestically, and we are pursuing alternative distribution models internationally where we have less experience. Third-party dealer networks are the traditional method of vehicle sales distribution and service in North America. Currently, we sell directly to consumers; therefore, we do not have a traditional dealer product distribution and service network. We have limited experience distributing directly to consumers, and we expect that continuing to build a national and global in-house sales and marketing function, including an expanded physical sales, marketing and service footprint via our Lucid studios and service centers, will be expensive and time consuming. We have experienced delays in the construction and opening of our Lucid studios and service centers and any significant delays to establish Lucid studios and service centers in key markets in the future could have an adverse effect on our business, results of operations, prospects and financial condition. In addition, if our lack of a traditional dealer distribution and service network results in lost opportunities to generate sales, it could limit our ability to grow. Moreover, our business model of selling directly to consumers and directly servicing all vehicles may be limited by regulatory constraints. If our use of an in-house sales, marketing and service team is not effective, our results of operations and financial condition could be adversely affected. As we expand globally, we are actively evaluating, and have adopted in certain markets, alternative importer and agency models designed to enhance flexibility, increase our speed to market in a capital efficient manner, and optimize our distribution strategy in response to evolving market dynamics . We have limited experience utilizing alternative distribution models, and such efforts require significant information systems to be developed and deployed, which may prove costly, time-consuming or ineffective. Our ability to generate meaningful product revenue will depend on consumer adoption of EVs. We are developing and producing EVs and related products and services and, accordingly, our ability to generate meaningful product revenue will highly depend on sustained consumer demand for alternative fuel vehicles in general and EVs in particular. If the market for EVs does not develop as we expect or develops more slowly than we expect, or if there is a decrease in consumer demand for EVs, these factors may harm our business, prospects, financial condition and results of operations. The market for electric and other alternative fuel vehicles is relatively new, rapidly evolving, characterized by rapidly changing technologies, price competition, market entrants, evolving government regulation (including the availability, reduction or elimination of government incentives and subsidies) and industry standards, frequent new vehicle introductions and changing consumer demands and behaviors. Any number of developments or disruptions in the industry could negatively affect consumer demand for EVs broadly and for our EVs in particular. In addition, demand for EVs may be affected by factors directly impacting automobile prices or the cost of purchasing and operating automobiles such as the availability, reduction or elimination of sales and financing incentives including tax credits, prices of raw materials and parts and components, cost of fuel, availability of consumer credit, interest rates, and governmental regulatio ns, including tariffs, i mport and export regulation and other taxes. Volatility in demand may lead to lower vehicle unit sales, which may result in downward price pressure and adversely affect our business, prospects, financial condition and results of operations. Further, sa les of vehicles in the automotive industry tend to be cyclical in many markets, which may expose us to increased volatility, especially as we expand and adjust our operations and retail strategies. Specifically, it is uncertain how such macroeconomic factors will impact us in an industry that has globally been experiencing a recent decline in sales. Other factors that may influence the adoption of EVs include: • perceptions about EV quality, safety, design, performance, value, and cost; • perceptions about the limited range over which EVs may be driven on a single battery charge; • considerations about the total cost of ownership of EVs, including the initial purchase price and accumulated depreciation, as well as operating and maintenance costs; • concerns about electric grid capacity and reliability; • perceptions about the sustainability and environmental impact of EVs, including with respect to both the sourcing and disposal of materials for EV batteries and the generation of electricity provided in the electric grid; • the cost and availability of other alternative fuel vehicles, including plug-in hybrid EVs; • improvements in the fuel economy of the internal combustion engine; • the quality, reliability, and availability of service for EVs, especially in international markets; • volatility in the cost of oil and gasoline; • government regulations and the availability, reduction or elimination of economic incentives promoting fuel efficiency and alternate forms of energy; • access to charging stations compatible with our vehicles and cost to charge an EV, especially in international markets, and related infrastructure costs and standardization; 72 • the availability, reduction or elimination of tax and other governmental incentives to purchase and operate EVs or future regulations requiring increased use of nonpolluting vehicles; and • macroeconomic factors. The influence of any of the factors described above or any other factors may cause a general reduction in consumer demand for EVs or our EVs in particular, either of which would materially and adversely affect our business, results of operations, financial condition and prospects. We face challenges providing charging solutions for our vehicles, both domestically and internationally. Demand for our vehicles will depend in part on the availability of charging infrastructure both domestically and internationally. While the prevalence of charging stations has been increasing, public charging station locations are significantly less widespread than gas stations. Furthermore, public charging stations sometimes experience downtime, leading to customer dissatisfaction. Although we have partnered with third-party EV charging providers to offer charging stations to our customers, the public charging infrastructure available to our customers may be insufficient to meet their needs or expectations, especially in certain international markets. Some potential customers may choose not to purchase our vehicles because of the lack of more widespread and reliable public charging infrastructure. In addition, although we have gained access to Tesla’s Supercharger network, any delay in implementing changes in Lucid vehicles required by Tesla with respect to charge ports may result in Tesla denying our access to their network, and there is no guarantee that our customers will not experience performance, access or other issues with this or other charging networks. In addition, there has been additional scrutiny into funding that supports the EV industry, including EV charging infrastructures, under the current U.S. administration, and such scrutiny may result in legislation that could adversely impact the availability of funding under existing programs. Consequently, the deployment of public charging stations may not occur at planned levels, which could limit the development of public charging infrastructure and decrease the attractiveness and demand for EVs. If we fail to manage our growth effectively, we may not be able to develop, manufacture, distribute, market and sell our vehicles successfully. Any failure to manage our growth effectively could materially and adversely affect our business, prospects, results of operations and financial condition. We are expanding our operations significantly and our current and future expansion plans may include: • expanding our management team; • hiring and training new personnel; • ramping up the production of our current vehicles and releasing new models in the future; • establishing or expanding design, manufacturing, distribution, sales and service facilities; • developing and marketing EV-related products and technologies, including robotaxis; • implementing and enhancing administrative and business infrastructure, governance, systems and processes, i ncluding in connection with our status as a public company; and • expanding into new markets and establishing sales, service, administrative, distribution, or manufacturing operations and partnerships in many of those markets. We require qualified personnel, including design and manufacturing personnel and service technicians for our vehicles. Our vehicles are based on a different technology platform than traditional internal combustion engines, individuals with sufficient training in EVs may not be available to hire, and as a result, we will need to expend significant time and expense training the employees we do hire. Competition for individuals with experience in supply chain management and logistics as well as designing, engineering, manufacturing, producing, selling, and servicing EVs is intense, and we may not be able to identify, attract, train, motivate or retain sufficient highly qualified personnel in the future. Furthermore, we have in the past reduced the size of our workforce, and recently implemented workforce reduction plans and other actions relating to contractors in the first half of 2026, including the elimination of the second shift of production at our AMP-1 factory. We have also announced a number of changes to our executive leadership team. Any such plan may adversely affect our internal programs and initiatives, our ability to recruit and retain skilled and motivated personnel, may be distracting to employees and management and may negatively impact our business operations, reputation, or ability to serve customers. We cannot provide any assurances that we will not have to undertake additional workforce reductions or similar actions in the future. The failure to identify, attract, train, motivate and retain these employees could seriously harm our business and prospects. In addition, our employee equity program is a key factor in our ability to attract and retain talent and continue to support the growth of the company. If we are unable to grant equity awards, or if we are forced to reduce the value of equity awards to be received by the employees for any reason, we may not be able to attract, hire and retain the personnel necessary for our business, which would have a material adverse effect on our business, prospects financial condition and results of operations. In addition, our success is substantially dependent upon the continued service and performance of our senior management team and key technical and vehicle management personnel. If any key employees were to separate their employment with us, such separation would likely increase the difficulty of managing our current operations and future growth and heighten the foregoing risks. 73 We also have limited experience to date in high volume manufacturing of our vehicles. We cannot assure our investors that we will be able to develop and implement efficient, automated, low-cost manufacturing capabilities and processes, and reliable sources of component supply that will enable us to meet the desired quality, price, engineering, design and production standards, as well as the production volumes, required to successfully market and sell our vehicles. We have also experienced, and may continue to experience, internal and external logistics challenges with respect to our manufacturing and warehousing facilities, including disruption to manufacturing operations due to the consolidation of our logistics operations with our manufacturing operations at AMP-1 and AMP-2. Any failure to develop and implement such manufacturing processes and capabilities within our projected costs and timelines could impact our future growth and impair our ability to produce, market, service and sell or lease our vehicles successfully. In addition, our rapid growth, competitive real estate markets, and increasing rental rates, may hinder our ability to obtain suitable space to accommodate our growing operations or to renew existing leases on terms favorable to us, if at all. Any failure to obtain or renew leases for real property on terms favorable to us when we need them may limit our growth, impact our operations and have an adverse impact on our financial condition. If we fail to manage our growth effectively, such failure could result in negative publicity and damage to our brand and have a material adverse effect on our business, prospects, financial condition and results of operations. We face risks associated with international operations, including possible unfavorable regulatory, geopolitical, tax and labor conditions, which could adversely affect our business. As we expand our international presence and operations, we will be increasingly subject to the legal, geopolitical, regulatory and social requirements and economic conditions in these jurisdictions. Additionally, as part of our growth strategy, we have been expanding and may continue to expand our sales, maintenance and repair services outside of the U.S. We are also continuing the construction of AMP-2 in Saudi Arabia and may continue to further expand our manufacturing activities outside the U.S. However, we have limited experience to date manufacturing or selling our vehicles outside of the U.S., and such expansion has and will continue to require us to make significant expenditures, including the hiring of local employees and establishing facilities and related systems and processes, in advance of generating any significant revenue. We are subject to a number of risks associated with international business activities that may increase our costs, impact our ability to sell, service and manufacture our vehicles, and require significant management attention. These risks include: • conforming our vehicles to various international regulatory and homologation requirements where our vehicles are sold; • establishing localized supply chains and managing international supply chain and logistics costs, including the shipping and delivery of kits for the SKD facility; • establishing sufficient charging points for our customers in those jurisdictions, via partnerships or, if necessary, via development of our own charging networks or accessing those of third parties; • difficulties staffing and managing foreign operations, especially in jurisdictions where no EV ecosystem exists and qualified personnel must be hired or relocated; • difficulties attracting customers in new jurisdictions; • difficulties establishing international manufacturing operations, including difficulties establishing relationships with or establishing localized supplier bases and developing cost-effective and reliable supply chains for such manufacturing operations and financing such manufacturing operations; • difficulties controlling costs and potential loss of funding, including as a result of delays in the construction or ramp-up of operations at AMP-2; • difficulties or delays caused by local jurisdictions in implementing infrastructure improvements for manufacturing facilities; • foreign government taxes, regulations and permit requirements, including foreign taxes that we may not be able to offset against taxes imposed upon us in the U.S., and foreign tax and other laws limiting our ability to repatriate funds to the U.S.; • inflation as well as fluctuations in foreign currency exchange rates and interest rates, including risks related to any forward currency contracts, interest rate swaps or other hedging activities we may undertake; • U.S. and foreign government trade restrictions, tariffs, price or exchange controls, and export controls, including political risk and customer perceptions based on such changes and risks; • threat of a trade war that could impede the transition to EVs, disrupt global supply chains, and delay the implementation of economic competitiveness policies; • foreign laws, regulations and restrictions, including in the areas of supply chain, labor, sales, service, sustainability and health and safety, and related compliance costs; • increasingly restrictive and complex foreign data privacy and cybersecurity laws, regulations and obligations; • actions that may impede global green transition priorities or policies designed to reduce environmental sustainability efforts; 74 • political instability, natural disasters, pandemics, wars, military actions, global or regional conflicts or other geopolitical events (including the military operations in the Gulf region and the Middle East, and the potential escalation and broadening of the conflict in Iran, each of which affect global energy prices and disrupt supply chains both regionally and globally, and have and may continue to adversely impact our operations in the Middle East, including the ramp-up of operations at AMP-2 and the manufacturing of our Midsize platform, increase our operating costs and reduce our margins, delay shipments of equipment and components, particularly those that go through the Strait of Hormuz shipment route, or hinder the movement of personnel necessary for our international manufacturing and logistics activities), or events of terrorism; • increases in energy, freight, logistics and other operating costs arising from geopolitical developments may contribute to inflationary pressures, which could reduce consumer purchasing power and adversely affect demand for our vehicles; • indirect effects of geopolitical events across regions, including through commodity price volatility, trade restrictions, regulatory changes or supply chain interdependencies, which could adversely affect our operations even in markets not directly impacted; • prolonged or recurring geopolitical disruptions, which could limit our ability to accurately forecast demand, manage costs or implement effective mitigation strategies; and • the strength of international economies. If we fail to successfully address these risks, they could materially and adversely affect our business, prospects, results of operations and financial condition. The automotive industry has significant barriers to entry that we must overcome in order to manufacture and sell EVs at scale. The automobile industry is characterized by significant barriers to entry, including large capital requirements, investment costs of designing, manufacturing, and distributing vehicles, long lead times to bring vehicles to market from the concept and design stage, the need for specialized design and development expertise, regulatory requirements, establishing a brand name and image, and the need to establish sales and service locations. Since we are focused on the design of EVs, we face a variety of added challenges to entry that a traditional automobile manufacturer would not encounter, including additional costs of developing and producing an electric powertrain that has comparable performance to a traditional gasoline engine in terms of range and power, inexperience with servicing EVs, regulations associated with the transport or storage of batteries, the need to establish or provide access to sufficient charging locations and unproven high-volume customer demand for EVs. While we have developed and started producing the Lucid Air and Lucid Gravity and have completed the first two phases of construction of AMP-1 and the SKD portion of AMP-2, we have not finished tooling all production lines for AMP-1, and further construction of AMP-1 and the second phase of AMP-2 is underway. If we are not able to overcome these barriers, our business, prospects, results of operations and financial condition will be negatively impacted, and it will harm our ability to grow our business. The automotive market is highly competitive, and we may not be successful in competing in this industry. The global automotive market, particularly for electric and alternative fuel vehicles, is highly competitive, and we expect it will become even more so in the future. In recent years, the EV industry has grown, with the emergence of several companies that focus completely or partially on the EV market. In addition, traditional automotive manufacturers are also producing and selling electric and alternative fuel vehicles. We expect additional companies to enter this market within the next several years. EV manufacturers with which we compete include Tesla, Rivian, an increasing number of U.S.-based and international entrants and traditional automotive manufacturers, many of which have begun, or announced plans to begin, selling their own EVs in the near-term. We also compete with established automobile manufacturers in the luxury vehicle segment, including certain manufacturers who have entered or plan to enter the alternative fuel and EV market with either fully electric or plug-in hybrid versions of their vehicles. We compete for sales of luxury vehicles with internal combustion engines from established manufacturers. Certain of our competitors, particularly EV manufacturers based in China, have benefited from government support, including subsidies, tax incentives and other industrial policies, which may enhance their competitive position and lower their costs. Many of our current and potential competitors have significantly greater financial, technical, manufacturing, marketing and other resources than we do and may be able to devote greater resources to the design, development, manufacturing, distribution, promotion, sale, servicing, and support of their products, including the ability to significantly reduce prices of their products. In addition, many of these companies have longer operating histories, greater name recognition, larger and more established sales forces, broader customer and industry relationships and other resources than we do. Our competitors may be in a stronger position to respond quickly to changing market conditions and new technologies and may be able to design, develop, market and sell their products more effectively than we do. Vehicle price reductions by our competitors may result in downward price pressure and reduced demand for our vehicles. We may not be able to adjust our pricing strategies effectively, and there can be no assurance that such adjustments will allow us to successfully compete against our competitors, which may have a material adverse effect on our brand, business, prospects, inventory levels, results of operations and financial condition. In addition, increased competition has in the past and may continue to require us to increase marketing and incentive expenses, which may have a material adverse effect on our operating results and financial condition. We expect competition in our industry to significantly intensify in the future in light of the increased demand for alternative fuel vehicles, global competitors, macroeconomic uncertainty, and consolidation in the worldwide automotive industry. Our ability to successfully compete in our industry will be fundamental to our future success in existing and new markets. There can be no assurance that we will be able to compete successfully in our markets. 75 Developments in EV or alternative fuel technology or improvements in the internal combustion engine may adversely affect the demand for our vehicles. We may be unable to keep up with changes in EV technology or alternatives to electricity as a fuel source and, as a result, our competitiveness may suffer. Significant developments in alternative technologies, such as alternative battery cell technologies, hydrogen fuel cell technology, advanced gasoline, ethanol or natural gas, or improvements in the fuel economy of the internal combustion engine, may materially and adversely affect our business and prospects in ways we do not currently anticipate. Existing and other battery cell technologies, fuels or sources of energy may emerge as customers’ preferred alternative to the technologies in our EVs. Any failure by us to develop new or enhanced technologies or processes, or to react to changes in existing technologies, could materially delay our development and introduction of new and enhanced EVs, which could result in the loss of competitiveness of our vehicles, decreased revenue and a loss of market share to competitors. In addition, we expect to compete in part on the basis of our vehicles’ range, efficiency, charging speeds, performance and software, and improvements in the technology offered by competitors could reduce demand for our current or future vehicles. As technologies change, we plan to upgrade or adapt our vehicles and introduce new models that reflect such technological developments, but our vehicles may become obsolete, and our research and development efforts may not be sufficient to adapt to changes in alternative fuel and EV technology. Additionally, as other companies continue to enter the EV space, we may lose any technological advantage we may have and suffer a decline in our competitive position. Any failure by us to successfully react to changes in existing technologies or the development of new technologies could materially harm our competitive position and growth prospects. The unavailability, reduction or elimination of certain government and economic programs could have a material adverse effect on our business, prospects, financial condition and results of operations. We benefit from government and economic programs in the U.S. and abroad that encourage the development, manufacture or purchase of EVs, such as ZEV credits, production tax credits, GHG credits and similar regulatory credits, the loss of which has and may continue to harm our ability to generate revenue from the sale of such credits to other manufacturers; the availability of tax credits and other incentives to consumers, without which the net cost to consumers of our vehicles could increase, reducing demand for our products; and investment tax credits for equipment, tooling and other capital needs, without which we may be unable to procure the necessary infrastructure for production to support our business and timeline; and certain other benefits, including a California sales and use tax exclusion and certain other hiring and job training credits in California, Michigan and Arizona. In addition, changes to non-financial incentives may also impact demand for our products, such as the federal government’s announcement that electric and other clean air vehicles will no longer be able to use carpool lanes without meeting the high occupancy requirements. We may also benefit from government loan or grant programs. While such EV-related governmental programs and economic incentives have been available in the U.S. , Canada and the EU, there is no guarantee that they will be available in the future. Any reduction, elimination, limitation or selective application of tax and other governmental programs and economic incentives because of policy changes, fiscal tightening or other reasons may result in the diminished competitiveness of the EV industry generally or our EVs in particular, which would adversely affect our business, prospects, financial condition and results of operations. On July 4, 2025, the OBBBA was enacted, which among other things, eliminated certain tax credits related to the EV industry. In addition, the OBBBA eliminated the penalties that automakers would pay if they failed to meet CAFE standards, effectively eliminating the financial incentive to comply with those standards. Additionally, the current U.S. presidential administration has issued executive orders that aim to revoke or weaken fuel efficiency and emissions regulations established by the prior administration, and has issued proposed rulemakings that would repeal federal GHG emission standards for certain vehicles and engines and eliminate our CAFE credits. While certain aspects of the OBBBA and the proposed actions by the administration remain subject to the outcome of pending litigation, the ultimate resolutions of such matters remain uncertain. The administration has issued a policy statement aimed at eliminating the “EV mandate,” which targets state-level emissions waivers and governmental subsidies. The administration also revoked the waiver by the U.S. Environmental Protection Agency (“EPA”) that had allowed California and certain other states to implement more stringent emissions standards for heavy-duty vehicles and to require all new passenger cars, trucks, and SUVs sold in California to be zero-emission by 2035. In particular, the National Highway and Traffic Safety Administration (“NHTSA”) has proposed a rule that would, among other things, reset and reduce CAFE standards and eliminate CAFE EV credit trading. In response, California and certain other states have initiated litigation challenging the legal validity of these actions. The outcome of the litigation remains uncertain. These, and any similar legislative or executive actions in the future, may adversely affect demand for our vehicles as well as our business, prospects, financial condition and results of operations. See “— Failure to attract customers, failure to complete the purchase process with customers, and customer cancellation of orders may have a material adverse impact on our business, prospects, results of operations and financial condition.” 76 We may be unable to offer attractive leasing and financing options for our current and future vehicles, which would adversely affect consumer demand. In addition, offering leasing and financing options to customers could expose us to credit and residual value risk. We offer leasing and financing of our vehicles to potential customers through third-party financing partners and intend to do the same in new markets, but we cannot provide any assurance that such third-party financing partners will continue, or would be able or willing, to provide such services on terms acceptable to us or our customers, if at all. Furthermore, because we have only sold a limited number of vehicles and only a limited secondary market for our vehicles exists, the future resale value of our vehicles is difficult to predict, and, if the actual resale value of our vehicles is lower than anticipated, it would make providing leasing terms that appeal to potential customers through such third-party financing partners more difficult. We believe that the ability to offer attractive leasing and financing options—whether due to the availability, reduction or continued elimination of tax incentives and certain governmental or economic programs, the availability of agreements with our third-party financing partners on terms acceptable to us or our customers, or other reasons—is particularly relevant to customers in the luxury vehicle segments in which we compete, and if we are unable to offer our customers an attractive option to finance the purchase of or lease the Lucid Air, the Lucid Gravity or planned future vehicles, including the upcoming Midsize platform vehicles, such failure could substantially reduce the population of potential customers and decrease demand for our vehicles. See “— The unavailability, reduction or elimination of certain government and economic programs could have a material adverse effect on our business, prospects, financial condition and results of operations . ” and “— Failure to attract customers, failure to complete the purchase process with customers, and customer cancellation of orders may have a material adverse impact on our business, prospects, results of operations and financial condition.” Furthermore, offering leasing and financing alternatives to customers could expose us to regulatory risks commonly associated with the extension of consumer credit. Competitive pressure and challenging markets could increase credit risk through leases and loans to financially weak customers, extended payment terms, and leases and loans into new and immature markets, and any such credit risk could be further heightened in light of the economic uncertainty and any economic recession or other downturn, whether due to inflation, global or regional conflicts or other geopolitical events, or public crises. If we are unable to provide leasing and financing arrangements that appeal to potential customers in a timely manner, or if the provision of such arrangements exposes us to excessive consumer credit risk or regulatory risk, our business, competitive position, results of operations and financial condition could be adversely affected. In addition, we provide a residual value guarantee to our commercial banking partner in connection with our vehicle leasing program, under which we are contractually obligated to share a portion of the shortfall between the resale value realized by the commercial banking partner and a predetermined resale value. However, actual resale values are subject to fluctuations from various factors such as the condition of the leased vehicle, market price of new vehicles, and general economic conditions. If the resale values of leased vehicles pursuant to the vehicle leasing program are materially lower than our estimates, we may be required to cover some or all of such difference and our results of operations could be negatively impacted. We may not be able to obtain or agree on acceptable terms and conditions for all or a significant portion of the government grants, loans and other incentives for which we may apply. As a result, our business and prospects may be adversely affected. We may apply for federal, state and foreign grants, loans and tax incentives under government programs designed to stimulate the economy and support the production of alternative fuel and EVs and related technologies. We anticipate that in the future there may be new opportunities for us to apply for grants, loans and other incentives from the U.S. federal and state governments, as well as foreign governments. Our ability to obtain funds or incentives from government sources is subject to the availability of funds under applicable government programs and approval of our applications to participate in such programs. The application process for these funds and other incentives will likely be highly competitive. We cannot guarantee that we will be successful in obtaining any of these additional grants, loans and other incentives. If we are not successful in obtaining any of these additional incentives and we are unable to find alternative sources of funding to meet our planned capital needs, our business and prospects could be materially adversely affected. 77 We are subject to risks associated with autonomous driving and advanced driver assistance system technology, and we cannot guarantee that our vehicles will achieve our targeted assisted or autonomous driving functionality within our projected timeframe, if ever. We design our vehicles with proprietary ADAS hardware and software. The Lucid Air and Lucid Gravity are equipped with Level 2 (partial automation) ADAS functionality. Additionally, our vehicles are capable of integrating third-party ADAS and autonomous vehicles (“AV”) hardware and software. For example, in July 2025, we entered into an integration agreement with Nuro to install autonomous driving software in Lucid Gravity vehicles, in conjunction with our agreement with Uber, to enable Uber and its designated fleet operators to operate such vehicles, in specified geographical areas, without human intervention (“Level 4 autonomy”). In addition, we entered into the Second VPA with Uber in April 2026, further expanding our strategic partnership in connection with our Midsize platform vehicles. Over time, we plan to upgrade our vehicles with additional ADAS and AV capabilities. ADAS and AV technologies are emerging and subject to known and unknown risks, and there have been accidents and fatalities associated with such technologies. The safety of such technologies depends in part on user interaction, and users, as well as other drivers on the roadways, may not be accustomed to using or adapting to such technologies. In addition, self-driving technologies are the subject of intense public scrutiny and interest, and previous accidents involving autonomous driving features in other non-Lucid vehicles, including alleged failures or misuse of such features, have generated significant negative media attention and government investigations. We and others in our industry are subject to a Standing General Order issued by NHTSA that requires us to report certain crashes in which ADAS features were active, and these crash reports may become publicly available. To the extent accidents associated with our ADAS or third-party technologies occur, we could be subject to significant liability, negative publicity, government scrutiny and further regulation. Any of the foregoing could materially and adversely affect our results of operations, financial condition and growth prospects. In addition, we face substantial competition in the development and deployment of ADAS and AV technologies. Many of our competitors, including established automakers and technology companies, have devoted significant time and resources to developing self-driving technologies. If we are unable to develop or improve competitive Level 2 or more advanced ADAS or AV technologies in-house or acquire access to such technologies via partnerships or investments in other companies or assets, we may be unable to equip our vehicles with competitive ADAS or AV features, which could damage our brand, harm our competitive position, reduce consumer demand for our vehicles and could have a material adverse effect on our business, results of operations, prospects and financial condition. ADAS and AV technologies are also subject to regulatory uncertainty, which exposes us to additional risks. See “— Risks Related to Litigation and Regulation — ADAS and autonomous vehicle technologies are subject to uncertain and evolving regulations. ” Uninsured or underinsured losses could result in payment of substantial damages, which would decrease our cash reserves and could harm our cash flow and financial condition. In the ordinary course of business, we may be subject to losses resulting from claims such as product liability, significant accidents, acts of God or other claims brought against us, for which we may have no or insufficient insurance coverage. While we currently carry insurance that is generally customary for a company of our size and operations, we may not maintain as much insurance coverage as other original equipment manufacturers, and in some cases, we may not maintain any at all. Additionally, the policies that we have in place may include significant deductibles, limitations or exclusions, and we cannot be certain that our insurance coverage will be sufficient to cover all or any future claims. A loss that is uninsured or exceeds existing policy limits may require us to pay unexpected and substantial amounts, which could adversely affect our financial condition and results of operations. Further, insurance coverage may not continue to be available to us or, if available, may be at a significantly higher cost based on insurance market conditions, changes in our risk profile or loss portfolio. This may require a change in our insurance purchasing philosophy and strategy which can result in the assumption of greater risks to offset insurance market fluctuations. Extended periods of low gasoline or other petroleum-based fuel prices could adversely affect demand for our vehicles, which would adversely affect our business, prospects, results of operations and financial condition. A portion of the current and expected demand for EVs results from concerns about volatility in the cost of gasoline and other petroleum-based fuel, the dependency of the U.S. on oil from unstable or hostile countries, government regulations and the availability, reduction or elimination of economic incentives promoting fuel efficiency and alternative forms of energy, as well as concerns about climate change resulting in part from the burning of fossil fuels. If the cost of gasoline and other petroleum-based fuel decreases significantly, the outlook for the long-term supply of oil to the U.S. improves, the government eliminates or modifies its regulations or economic incentives related to fuel efficiency and alternative forms of energy or there is a change in the perception that the burning of fossil fuels negatively impacts the environment, the demand for EVs, including our vehicles, could be reduced, and our business and revenue may be harmed. In addition to the OBBBA, the current U.S. presidential administration has prioritized efforts that encourage domestic production of fossil-fuel energy, including oil. If increased production of oil lowers gas prices, demand for EV vehicles may decline. 78 Gasoline and other petroleum-based fuel prices have historically been extremely volatile and it is difficult to ascertain whether such volatility will continue to persist, which could be exacerbated by geopolitical events, including the recent conflict in Iran. Lower gasoline or other petroleum-based fuel prices over extended periods of time may lower the perception in government and the private sector that cheaper, more readily available energy alternatives should be developed and produced. If gasoline or other petroleum-based fuel prices remain at deflated levels for extended periods of time, the demand for EVs, including our vehicles, may decrease, which would have an adverse effect on our business, prospects, financial condition and results of operations. Changing and at times, conflicting expectations from global regulators, our investors, customers and employees with respect to sustainability matters may impose additional costs on us or expose us to new or additional risks. Attention from governmental organizations and our investors, customers and employees, on sustainability issues and disclosure, may cause us to incur additional costs or expose us to additional risks. There can be no certainty that we will be able to meet varying or conflicting stakeholder expectations regarding these matters to our various stakeholders’ satisfaction. Negative public perception, adverse publicity or negative comments in social media about us could damage our reputation. Any harm to our reputation could impact our employees’ engagement and retention and the willingness of our customers and partners to do business with us. Additional costs and resources may be required to monitor, report, and comply with global regulations on sustainability topics, and the rapidly changing regulatory landscape makes it difficult to plan for future developments. Actual or perceived shortcomings or dissatisfaction with our sustainability practices and reporting may subject us to litigation and could negatively impact our business. In addition, a variety of organizations have developed ratings to measure the performance of companies on these topics, and the results of these assessments are widely publicized. Unfavorable or downgraded ratings of our company or our industries, as well as non-inclusion or removal of our stock on sustainability-oriented investment funds or indexes, may lead to negative investor sentiment and the diversion of investment to other companies or industries, which could have a negative impact on our stock price. Risks Related to Manufacturing and Supply Chain We have experienced and may in the future experience significant delays in the design, launch and manufacture of our vehicles, including the Lucid Air, the Lucid Gravity and our upcoming Midsize platform, which could harm our business and prospects. Our plan to scale our manufacturing capacity and increase sales is dependent upon the timely availability of funds, upon our finalizing of the related design, engineering, component procurement, testing, build-out and manufacturing plans in a timely manner and also upon our ability to execute these plans within the planned timeline. Automobile manufacturers often experience delays in the design, manufacture and commercial release of new vehicle models, as well as in ramping up production, and we have experienced in the past, and may experience in the future, such delays with regard to our vehicles. For example, we have experienced delays in the engineering of certain of our vehicle systems, including as a result of design changes to components. Any future delays in the design, launch and manufacture of our vehicles and variants could materially damage our brand, business, prospects, financial condition and results of operations. Our Midsize platform is still under development, and may be delayed or not proceed as planned. Additionally, prior to mass production of our EVs, they must be fully approved for sale in accordance with a range of jurisdiction-specific requirements, including but not limited to regulatory approvals in the various geographies where we intend to launch. Likewise, we have encountered and may continue to encounter delays with the design, construction, and regulatory or other approvals necessary to bring online our future expansions in Arizona and Saudi Arabia, or any other future manufacturing facilities. We have experienced and may continue to experience delays in the launch and ramp of our vehicles and as a result, our growth prospects could be adversely affected. Furthermore, we rely on third-party suppliers for the development, manufacture, and supply of many key components and materials used in our vehicles, as well as for provisioning and servicing equipment at our manufacturing facilities. We have experienced, and may in the future experience, delays if our suppliers are unwilling to supply components on acceptable terms, do not agree to our timing or volume requirements, fail to meet agreed-upon timelines and volumes, experience capacity constraints, or deliver components that do not meet our quality standards or other requirements. We have also been affected by ongoing, industry-wide challenges in logistics and supply chains, such as increased supplier lead times and the limited availability of reliable third-party suppliers. For example, the military operations in the Gulf region and the Middle East, and the potential escalation and broadening of the conflict in Iran, each of which affect global energy prices and disrupt supply chains both regionally and globally, have and may continue to adversely impact our operations in the Middle East, delay shipments of equipment components, particularly those that go through the Strait of Hormuz shipment route, or hinder the movement of personnel necessary for our international manufacturing and logistics activities. These challenges have affected our ability, as well as the ability of our suppliers, to obtain parts, components and manufacturing equipment on a timely basis, and in some instances, have resulted in increased costs and delays in facilities construction and expansion as well as vehicle production ramp-up. We expect the risk of unexpected disruptions to continue for the foreseeable future. Any delays by our suppliers in delivering or developing necessary components may result in further setbacks to our production and delivery timelines. The continued development, manufacturing and production ramp of our vehicles are and will be subject to risks, including with respect to: • our ability to ensure ongoing readiness of firmware features and functions to be integrated into our vehicles as planned and on the desired timeline; 79 • our ability to finalize release candidate specifications for our future vehicles as planned and on the desired timeline; • any delays by us in delivering final component designs to our suppliers or any changes to such component designs; • our or our suppliers’ ability to successfully tool manufacturing facilities as planned and on the desired timeline; • our ability to ensure a working and reliable supply chain and desired supplier part quality and quantity as planned and on the desired timeline; • our ability to accurately manufacture vehicles within specified design tolerances; • our ability to establish, implement, refine and scale, as well as make significant investments in manufacturing, supply chain management and logistics functions, including the related information technology systems and software applications; • our ability to adequately reduce and control the costs of key parts and materials; • our ability to significantly reduce freight costs, including in-bound freight costs; • our ability to manage any transitions or changes in our production process, planned or unplanned; • the occurrence of product defects that cannot be remedied without adversely affecting the production; • our ability to secure neces sary funding; • our ability to obtain required regulatory approvals and certifications; • our ability to comply with environmental, safety, and similar regulations and in a timely manner; • our ability to secure necessary components, services, or licenses on acceptable terms and in a timely manner; • our ability to attract, recruit, hire, retain and train skilled employees including supply chain management, supplier quality, manufacturing and logistics personnel; • our ability to design and implement effective and efficient quality control and inventory management processes; • securing in a timely manner necessary raw materials and components that meet our quality standards, cost-effectively in domestic and international sourcing, including raw materials and components subject to China’s export control requirements regarding certain rare-earth minerals and semiconductor-related products, such as microchips and memory; • our ability to maintain arrangements on commercially reasonable terms with our suppliers, delivery and other partners, after sales service providers, and other operationally significant third parties; • other delays, backlog in manufacturing and research and development of new mo dels, and cost overruns; and • any other risks identified herein. Any significant delay or complication in the design of our vehicles, or in the launch, manufacture, and production ramp of our products, features and services, including those related to expanding our production capacity and supply chain, obtaining or maintaining necessary regulatory approvals, or managing such ramps cost-effectively, could materially damage our brand, business, prospects, financial condition and results of operations. We expect that we will require additional financing to fund our planned operations and expansion plans. If we are unable to arrange for required funds under the terms and on the timeline that we anticipate, our plans for tooling and building out our manufacturing facilities and for commercial production of our EVs could be significantly delayed, which would materially adversely affect our business, prospects, financial condition and results of operations. See “ — Risks Related to Financing and Strategic Transactions — We will require additional capital to support business growth, and this capital might not be available on commercially reasonable terms, or at all.” 80 Our ability to continue production and grow depends upon our ability to maintain relationships with our existing suppliers and source suppliers for our critical components, and to complete building out our supply chain, while effectively managing the risks due to such relationships. Our success, including our ability to continue production of our current vehicle models, and commence production of our Midsize platform, will depend on our ability to enter into supplier agreements and maintain our relationships with hundreds of suppliers that are critical to the production of our vehicles. To date, we have not secured long-term supply agreements for all of our components, and for some components, our supply agreements do not guarantee sufficient quantities of components for our vehicle production ramp. We seek opportunities to secure long-term committed supply agreements for certain of these components. The supplier agreements we have or may enter into with key suppliers in the future may not be renewed or may contain provisions under which suppliers may refuse to supply. To the extent that we do not have long-term supply agreements with guaranteed pricing for our parts or components, we will be exposed to fluctuations in prices of components, materials and equipment. In addition, our agreements for the purchase of battery cells and other components often contain pricing provisions that are subject to adjustment based on changes in market prices of key commodities or currency values. Substantial increases in the costs for such components, materials and equipment, whether due to supply chain or logistics issues, adverse economic conditions, geopolitical conflicts, changes in trade policies or agreements, the uncertainties surrounding domestic and foreign tariffs, export controls, inflation, or increased energy or natural gas costs, would increase our operating costs and could reduce our margins if we cannot offset these increased costs. Any attempts to increase the announced or expected prices of our vehicles in response to increased costs could be viewed negatively by our potential customers and could adversely affect our business, prospects, financial condition or results of operations. We may also be at a disadvantage in negotiating supply agreements for the production of our vehicles as well as for the design and construction of our manufacturing facilities due to our limited operating history. In addition, given that in many cases we are an aggregator of automotive parts produced by third-party manufacturers, there is the possibility that supply agreements for the parts and components for our vehicles could be at costs that make it difficult for us to operate profitably. In addition, lower production volumes or demand, or reductions in our projected production volumes, have negatively affected, and could continue to adversely affect, our relationships with existing suppliers, who may seek to increase pricing, assert contractual or other claims, or otherwise fail to perform or comply with contractual obligations. We currently have, and may in the future have, supplier contractual claims, which would adversely affect our ability to obtain services and components from such suppliers. In addition, if we are unable to establish or maintain confidence among suppliers with respect to our liquidity and long-term business prospects, we may lose our relationships or contracts with such suppliers. Any such action has resulted, and may in the future result, in supply disruptions, increased costs, or disputes, which could materially and adversely affect our business, financial condition, and results of operations. We are dependent on our suppliers, the majority of which are single-source suppliers, and the inability or unwillingness of these suppliers to deliver necessary components of our products according to our schedule and at prices, quality levels and volumes acceptable to us, or our inability to efficiently manage these components or to implement or maintain effective inventory management and other systems, processes and personnel to support ongoing and increased production, could have a material adverse effect on our results of operations and financial condition. We rely on hundreds of third-party suppliers for the provision and development of many key components and materials used in our vehicles. While we seek to obtain components from multiple sources whenever possible, many components used in our vehicles will be custom-designed and purchased by us from a single source. Our limited, and in many cases single-source, supply chain exposes us to delivery failure or component shortages for our production. Our third-party suppliers may not be able to meet our required product specifications and performance characteristics, which would impact our ability to achieve our product specifications and performance characteristics as well. Additionally, our third-party suppliers may be unable to obtain required certifications or provide necessary warranties for their products that are necessary for use in our vehicles. We have been affected by ongoing, industry-wide challenges in logistics and supply chains, such as increased supplier lead times, limited availability of reliable third-party suppliers, and ongoing constraints in the supply of semiconductors and their related products. We expect that these industry-wide trends may continue to affect the ability of us and our suppliers to obtain parts, components and manufacturing equipment, including for the expansion of AMP-1 and the construction of AMP-2, on a timely basis for the foreseeable future, and may result in increased costs. Changes in our supply chain or production needs in order to meet our desired quality targets, development timelines and production volumes as well as due to design changes and model updates have resulted in cost increases from our suppliers. 81 Any significant increases in our production, such as production ramp of our vehicles, may require us to procure additional components in a short amount of time and our suppliers may not ultimately be able to sustainably and timely meet our cost, quality and volume needs, requiring us to replace them with other sources. In many cases, our suppliers provide us with custom-designed parts that would require significant lead time to obtain from alternative suppliers, or may not be available from alternative suppliers at all. If we are unable to obtain suitable components and materials used in our vehicles from our suppliers or if our suppliers decide to create or supply a competing product, our business could be adversely affected. Further, if we are unsuccessful in our efforts to control and reduce supplier costs, our results of operations will suffer. Alternatively, if our production decreases significantly below our projections for any reason, we may not meet all of our purchase commitments with suppliers with whom we have non-cancelable long-term purchase commitments. In cases where we are unable to fully utilize our purchase commitments, we have in the past and may continue to face fees, penalties, increased prices, excess inventory or inventory write-offs, and there could be a material adverse effect on our results of operations. In addition, lower production volumes or demand, or reductions in our projected production volumes, have negatively affected, and could continue to adversely affect, our relationships with suppliers, who may seek to increase pricing, assert contractual or other claims, or otherwise fail to perform or comply with contractual obligations. We currently have, and may in the future have, supplier contractual claims, which would adversely affect our ability to obtain services and components from such suppliers. In addition, if we are unable to establish or maintain confidence among suppliers with respect to our liquidity and long-term business prospects, we may lose our relationships or contracts with such suppliers. Any such action has resulted, and may in the future result, in supply disruptions, increased costs, or disputes, which could materially and adversely affect our business, financial condition, and results of operations. In addition, we have experienced, and in the future could continue to experience, delays if our suppliers are unwilling to supply components on acceptable terms, do not agree to our timing or volume requirements, fail to meet agreed-upon timelines and volumes, experience capacity constraints, or deliver components that do not meet our quality standards or other requirements. This may seriously harm our reputation, increase our warranty and other costs, or lead to product returns or recalls, any of which may materially harm our business. For example, during the first quarter of 2026, deliveries of the Lucid Gravity were disrupted for 29 days due to a supplier quality issue with the second-row seats, which affected our production and sales. Any disruption in the supply of components, including battery cells, magnets and semiconductors, whether or not from a single source supplier, could temporarily disrupt production of our vehicles until an alternative supplier is able to supply the required material. Any such delay, even if caused by a delay or shortage in only one part, could significantly affect our ability to meet our planned vehicle production targets. Even in situations where we may be able to establish alternate supply relationships and obtain or engineer replacement components for our single source components, we may be unable to do so quickly, or at all, at prices or quality levels that are acceptable to us. This risk is heightened by the fact that we have less negotiating leverage with suppliers than larger and more established automobile manufacturers, which could adversely affect our ability to obtain necessary components and materials on a timely basis, on favorable pricing and other terms, or at all. The industry in which we operate has experienced severe supply chain disruptions, and we expect these conditions to continue for the foreseeable future. Any such supply disruption could materially and adversely affect our results of operations, financial condition and prospects. Furthermore, as we scale our vehicle production, we will need to accurately forecast, purchase, warehouse and transport components to our manufacturing facilities and servicing locations internationally and at much higher volumes. We are only beginning to scale production in our manufacturing facilities and in the process we have experienced challenges associated with such activities. If our production decreases significantly below our projections for any reason, we have incurred in the past, and may incur in the future, losses due to inventory write-downs or assets impairment. We are also only in the process of scaling our vehicle servicing operations. Accordingly, we have not thoroughly tested our ability to scale production and vehicle servicing and mitigate risks associated with these activities. In addition, our current systems and processes are not mature, which may affect our ability to timely initiate critical and time sensitive projects and increase project costs. If we continue to experience logistics challenges, are unable to accurately match the timing and quantities of component purchases to our actual needs, successfully recruit and retain personnel with relevant experience, timely comply with applicable regulations, or successfully implement automation, inventory management and other systems or processes to accommodate the increased complexity in our supply chain and manufacturing operations, we may incur unexpected production disruption, storage, transportation and write-off costs, which could have a material adverse effect on our results of operations and financial condition. Furthermore, unexpected changes in business conditions, materials pricing, labor issues, wars, global or regional conflicts or other geopolitical events, governmental changes, political uncertainty, trade policies and agreements, the uncertainties surrounding domestic and foreign tariffs, export controls, natural disasters, health epidemics, and other factors beyond our and our suppliers’ control could also affect these suppliers’ ability to deliver components to us on a timely basis. For example, conflicts in the Middle East have affected, and may continue to affect certain shipping routes in the Red Sea as well as shipping routes through the Strait of Hormuz, resulting in delays in delivery of components and an increase in shipping costs globally. Prolonged or recurring geopolitical disruptions could limit our ability to accurately forecast demand, which may adversely affect our ability to project supplier purchase commitments and manage costs effectively. Additionally, governmental and policy changes may continue to result in new or increased tariffs on imported components. Our ability to mitigate these cost increases may be limited by the lack of alternative suppliers from unaffected countries or domestic suppliers with production capabilities to meet our requirements. Such disruptions or increase in costs could have a material adverse impact on our business, including our ability to timely manufacture and distribute our products in a cost-effective manner and adversely affect our results of operations and financial condition. 82 In addition, we have identified certain of our suppliers, including certain suppliers we deem critical, as having poor financial health or being at risk of acquisition, liquidation or bankruptcy. Although we routinely review our suppliers’ financial health and attempt to identify alternate suppliers where possible, the loss of any supplier, particularly a single- or limited-source supplier, or the disruption in the supply of components from our suppliers, has led and may in the future continue to lead to vehicle design changes, production delays, idle manufacturing facilities and potential loss of access to important technology and parts for producing, servicing and supporting our vehicles, any of which could result in negative publicity, damage to our brand and a material and adverse effect on our business, prospects, results of operations and financial condition. In addition, if our suppliers experience substantial financial difficulties, cease operations or otherwise face business disruptions, we may be required to provide substantial financial support to ensure supply continuity, which could have an additional adverse effect on our liquidity and financial condition. Changes in costs, changes of supply or shortage of materials, in particular for lithium-ion battery cells, could harm our business. As we scale commercial production of our vehicles or any future energy storage systems, we have experienced and may continue to experience increases in the cost of or a sustained interruption in the supply or shortage of materials. Any such increase, supply interruption or shortage could materially and adversely impact our business, results of operations, prospects and financial condition. For example, as we continue the expansion of AMP-1 and the construction of AMP-2, we have experienced increases in material and infrastructure equipment prices and cost of construction labor. In addition, we use various materials in our business, including aluminum, steel, magnets, lithium, nickel, copper, cobalt, neodymium, terbium, praseodymium and manganese, as well as lithium-ion battery cells and semiconductors from suppliers. The prices for these materials fluctuate, and their available supply may be unstable, depending on market conditions, trade policies, tariffs and export controls, inflationary pressure and global demand for these materials, including as a result of increased production of EVs, energy storage products by our competitors and the global supply chain crisis, and could adversely affect our business and results of operations. For instance, we are exposed to multiple risks relating to lithium-ion battery cells. These risks include: • a change in the cost, or changes in the available supply, of materials, such as cobalt, used in lithium-ion battery cells; • disruption in the supply of lithium-ion battery cells due to quality issues or recalls by manufacturers; • our ability to manage our supply and inventory of lithium-ion battery cells; and • fluctuations in the value of any foreign currencies, in which lithium-ion battery cells and related raw material purchases are or may be denominated against the U.S. dollar. Our ability to manufacture our vehicles or any future energy storage systems will depend on the continued supply of battery cells for the battery packs used in our products. A growth in popularity of EVs without a significant expansion in battery cell production capacity could result in shortages which would result in increased materials costs to us, and would impact our expected manufacturing and delivery timelines, and adversely affect our business, prospects, financial condition, results of operations, and cash flows. We have limited flexibility in changing battery cell suppliers, and any disruption in the supply of battery cells from such suppliers could disrupt production of our vehicles until a different supplier is fully qualified. In addition, pursuant to the agreement we entered into in connection with the supply of lithium-ion battery cells, we have made certain non-can celable long-term purchase commitments. If our production decreases significantly below our projections for any reason, we may not meet all of our purchase commitments. In cases where we are unable to fully utilize our purchase commitments, we have in the past and may continue to face fees, penalties, increased prices, contractual or other claims, excess inventory or inventory write-offs, and there could be a material adverse effect on our business, financial condition, and results of operations. Furthermore, our ability to manufacture our vehicles depends on continued and reliable access to semiconductors and microchips that incorporate them. The global semiconductor supply shortage, including as a result of China’s export controls over Nexperia’s microchip products, has impacted the automotive industry and affected many suppliers and man ufacturers, including us. In addition, global supply constraints for DDR4 and DDR5 memory may persist due to increasing demand driven by artificial intelligence applications, which could adversely affect availability and costs. We have experienced, and may continue to experience, an impact on our operations as a result of such shortages, which could delay or reduce planned production levels of our current and future vehicles and have an adverse effect on our business, prospects and results of operations. Moreover, export controls, particularly those affecting components within our supply chain, such as China’s restrictions on certain rare-earth minerals, has posed, and could continue to pose, risks to our production and distribution capabilities. In addition, foreign currency fluctuations, tariffs, shortages in petroleum or natural gas and oth er economic or political conditions have contributed to and may continue to result in significant increases in freight charges and raw material costs. These risks could be further magnified by geographical developments, global or regional conflicts or other geopolitical events, including the war in Ukraine, the military operations in the Gulf region and the Middle East, potential escalation and broadening of the conflict in Iran, which affects shipping routes both regionally and globally and in particular, the Strait of Hormuz shipment route, and have disrupted and may in the future disrupt the supply of materials critical in our manufacturing processes. Substantial increases in the prices for our raw materials or components would increase our operating costs and could reduce our margins. Any attempts to raise product prices in response to increased material costs could lead to reduced demand for our vehicles and materially and adversely affect our brand, image, business, results of operations, prospects and financial condition. 83 We must develop complex software and technology systems, including in coordination with vendors and suppliers, in order to produce our EVs, and there can be no assurance such systems will be successfully developed. Our vehicles use a substantial amount of third-party and proprietary software and complex technological hardware to operate, some of which is still subject to further development and testing. The development and implementation of such advanced technologies is inherently complex and requires coordination with our vendors and suppliers in order to integrate such technology into our EVs and ensure it interoperates with other complex technology as designed and as expected. We may fail to detect defects and errors that are subsequently revealed, and our control over the performance of third-party services and systems may be limited. Any defects or errors in, or which are attributed to, our technology, could result in, among other things: • delayed production and delivery of our vehicles; • delayed market acceptance of our vehicles; • loss of customers or inability to attract new customers; • product recalls or cancellation of orders; • diversion of engineering or other resources for remedying the defect or error; • damage to our brand or reputation; • increased service and warranty costs; • legal action by customers or third parties, including product liability claims; and • penalties imposed by regulatory authorities. In addition, if we are unable to develop the software and technology systems necessary to operate our vehicles, it will harm our competitive position. We rely on third-party suppliers to develop a number of technologies for use in our products. There can be no assurances that our suppliers will be able to meet the technological requirements, production timing and volume requirements to support our business plan. In addition, such technology may not satisfy the cost, performance useful life and warranty characteristics we anticipate in our business plan, which could materially adversely affect our business, prospects and results of operations. If we fail to successfully construct or tool our manufacturing facilities or if our manufacturing facilities become inoperable, we will be unable to produce our vehicles and our business will be harmed. We have completed the initial and second phases of construction at AMP-1 and the SKD portion of AMP-2, and further construction of AMP-1 and the second phase of AMP-2 is in progress. We also acquired select assets and assumed leases for certain facilities previously belonging to Nikola Corporation, including Nikola’s former Coolidge manufacturing facility. However, tooling these facilities for production of our vehicles and our future expansion plans is complicated and presents significant challenges and may require us to take vehicle production offline. In addition, certain of our suppliers may be unable to complete tooling with respect to finalized components of our vehicles in the planned timeframe after we deliver final component specifications, which could adversely affect our ability to continue commercial production of our vehicles on the expected timing and at the quality levels we require. As with any large-scale capital project, these efforts could be subject to delays, cost overruns or other complications. In addition, we may encounter problems or disputes with our vendors for a variety of reasons, including for reasons beyond our control, and such disputes, with or without merit, could also cause significant delays and cost overruns. These risks could be increased because we are building our facilities from the ground up to support our EV production processes, which differ substantially from traditional automobile production processes for which expertise is more readily available. In connection with the commercial production at AMP-1 and SKD production at AMP-2, we have hired and trained and continue to hire, retain, and train a significant number of employees and integrate a yet-to-be-fully-developed supply chain. Any failure to continue commercial or SKD production on schedule would lead to additional costs and would delay our ability to generate meaningful revenues. In addition, it could prevent us from gaining the confidence of potential customers, spur cancellations of orders and open the door to increased competition. All of the foregoing could hinder our ability to successfully launch and grow our business and achieve a competitive position in the market. 84 In addition, if any of our manufacturing facilities are not constructed in conformity with our requirements, repair or remediation may be required to support our planned phased manufacturing build-out and could require us to take vehicle production offline, delay implementation of our planned phased manufacturing build-out, or construct alternate facilities, which could materially limit our manufacturing capacity, delay planned increases in manufacturing volumes, delay the start of production of our future vehicles, or adversely affect our ability to timely sell and deliver our EVs to customers. Any repair or remediation efforts could also require us to bear substantial additional costs, including both the direct costs of such activities and potentially costly litigation or other legal proceedings related to any identified defect, and there can be no assurance that our insurance policies or other recoveries would be sufficient to cover all or any of such costs. Any of the foregoing consequences could have a material adverse effect on our business, prospects, results of operations and financial condition and could cause our results of operations to differ materially from our current expectations. Although we do not currently expect that we will be required to take vehicle production offline, any such repairs or remediation could entail significant costs, and we may be unable to recover some or all of such costs from the applicable contractor(s). The construction of our facilities and our operations are also subject to review and inspection by officials in the jurisdictions where our facilities are located, including without limitation, fire officials and building construction officials. We have received in the past, and could in the future receive, results from inspections by local officials at our facilities, both existing and currently under construction, citing failing marks. When such results have arisen, we actively engaged with the local authorities to address all of the specific issues identified by those officials as well as to devise means and methods that help ensure a safe and compliant work environment. Any future results will be addressed in