Name: Brainstorm Tech 2024: A Moment of EV Clarity
Uploaded: 2024-07-17
Duration: 18 min 16 s
Description: Peter Rawlinson, Chief Executive Officer and CTO, Lucid Motors Interviewer: Jason Del Rey, Fortune

Peter Rawlinson, Chief Executive Officer and CTO, Lucid Motors Interviewer: Jason Del Rey, Fortune

Brainstorm Tech 2024: A Moment of EV Clarity

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So yesterday, I um had the good fortune to partially interview a robot which was staged over there today, not a robot, but in my layman's term, I'll call it an engine. But what do we have here? What are we looking at? Well, this is the drive unit from a Lucid air. This is the propulsion unit that takes the electrical energy from the battery and converts that into rotary motion which powers the wheels. So we have three key elements, a motor, an inverter and the transmission, all combined. This unit is capable of well over 600 horsepower and it's created entirely in house. It's mass produced in our factory in Arizona. So I let's set the stage a little bit. The company has now been producing vehicles for, are we on year four now? Is that right? Yes. And since late 21 and the differentiation you talk about is the technology in large part. Can you help the audience explain a little bit why when they think about innovation, they should be thinking about lucid ahead of whether it's Tesla or some of the fast growing companies out of China. All right. Well, there's a general perception that all evs are born equal, the gasoline comes have add to the environment and all evs are good for the environment. And unfortunately, that isn't true just as there's a whole array of goodness within gasoline cars or badness. And there are gas guzzlers, there are the equivalent of gas guzzler electric cars and I term those electron guzzlers. Ok. And what's really important is that we recognize that and we work assiduously to advance the state of the art of the electric vehicle. That's what Lucid's all about. That's why I'm here. That's why I'm still working like crazy advancing the state of the art of the electric vehicle. And there's a reason for this, there are two fundamental widespread barriers to the widespread adoption of EVs one is range anxiety and the other is the cost of attainment and range anxiety. Just to make that clear is the idea that I might not be able to easily get from point A to point B. You might not make it home. Yes, I mean, I've had that happen to some relatives, they cannot afford a lucid but, but maybe another brand. Go ahead. So we've addressed range anxiety with when we launched our first Lucid Dream edition in late 2021 with 520 miles of range. So that, that's a lot. And I think that that, I mean, it's still the longest range car. Uh We still have 100 miles more range than the nearest competitor in the market today. So we've really addressed range anxiety in terms of that range. And also we can charge 200 miles in just 12 minutes. So you could travel 700 miles in a day with just 12 minutes downtime. I think that you would need that for other reasons rather than the limit of the car. But the the other aspect, the other main barrier to widespread adoption is just the cost of attainment. And when we look at why does an electric vehicle cost so much? A large part of it is the cost of the battery in our cars, relatively high end cars. The battery can you just can you can you just let the audience know sort of your price range on your current. So UC it starts at 69,900 with a Lucid Air pure and it goes right the way up to 249,000 for our supercar, the Lucid Air sapphire right in my journalists salary range just suit you. Yeah, and, and that's after a few, the lower end is after a few price cuts in the last year. Is that correct? Well, well, that's misunderstood. What's happened is we've been able to bring out successively more affordable versions of a car, which has meant that we've been able to address a more attainable price point as a result of bringing those models out. So that's been a large reason for hitting the magic 69,900. Got it. And where are you in this evolution of trying to both keep this technology differentiation, investing in it and also making a car that maybe more than just the 0.1% can afford or, or, or is that your market and you want to not at all. So one of the biggest misunderstandings about Lucid is people think we're some niche luxury player and nothing could be further from the truth. I'm not here to operate in a niche. We want to be huge, we want to be a mainstream player. We have to start with a relatively high end product because paradoxically the cost of industrializing a car is inversely proportional to the cost of the car. So is that part, I mean, so you know, just looking at you're a public company looking at financials from last year just to give contact around 600 million in revenue last year. Is that, am I right there? OK. And about 3 billion in the operating loss, right? So is that, is that part of what is that what we're talking about? Well, it would be worse if we try to go with a relatively affordable car to start with. It's that bad when you go for high end product because uh the the the the cost of a factory for a high end car is significantly less than for a low price point car. Why is that because that's all about volume. So if you're going to make a Rolls Royce, not many people can afford a Rolls Royce. So the factory is pretty small. You don't need a tooling that's going to be really hard and make thousands of parts. So the tooling costs can be less, can have a lot of it hand built. So the cost of a Rolls Royce factory is low, but the price of a Rolls Royce is pretty high. And conversely, if you're making a Volkswagen golf, that's all about numbers. You need to spend zillions on a huge factory with a huge degree of automation. I would have had to use it as a start up. I'd have had to raise an extra 10 billion. If I would take that route, it would have been prohibitive. I wouldn't be speaking to you now. So we had to start with a high end product first and this is a world prod path in Silicon Valley. And so a next product that you will be starting to deliver or rolling off the line this year is an SUV. And I think I think we have a video to show. Is that correct? Yes. Ok. Let's see that. So can you let, let's talk about what, what we're watching here? This is the earliest days of what would you call it? Well, this is our gravity SUV and this is in our design studio. This is the interactive process between design, styling, design and engineering in creating a car. We still use traditional clay modeling techniques linked with a completely digital array of tools from digital wind tunnel to digital crash analysis, for example. So there are, there are a lot of experts and industry analysts who believe that you need to nail this vehicle in terms of um both. Yes, the supply but the demand side for for a lucid to have a long term future. Is that, is that fair? Yeah. So it's, our finances are really, I mean, you, you, you touched on our finances. If they're dominated by scale, we need more scale and that way we can amortize our fixed cost. And that is the route to profitability for us and that there are four steps to achieving scale. We need to grow the word that we've got the best car on the planet available. Now in the lucid air, more and more people are recognizing this. We've just come off record quarterly sales were up 70% year on year. We're bucking that trend. Sell more airs, get gravity the SUV into production. That's got about six times the total addressable market. Then we move to the big one. What's the, what's the price point? Well, it's going to be from just under 80,000. So it's still relatively high. And is that price point related to tax credits? Unfortunately, it's above the air is above the tax credit threshold, but the lowest end version of gravity just gets it in to the 7.5 1000 federal tax incentive by virtue of being SUV. Ok. Yeah, I interrupted you. You were in the midst of I was in full flow. So we moved to the big one, the exciting one, ladies and gentlemen, late 26 where a mid size platform vehicle is scheduled for start of production. That's where we compete with Tesla Model three and model Y price point from about $48,000. And we're designing that to be capable of a million units per annum. I mean, this in the most respectful way possible is that 2026 date reality? I believe it is. I wouldn't say so otherwise. Um I, I also do want to field some questions from the audience. So um I'll come back to you in a minute. Um I have to ask you about a certain person who you want to work for and his name is Elon Musk. Um Over the last few years, he has taken a few opportunities to um come at you in a couple of ways. One has been related to um trying to minimize the role you had in the creation of the model S. Um Another was at one point related to um a stock compensation package you had um right after I think shortly after the, the IP O and the spa, I'm sorry, the spec um two questions about IAN. One is what, what do you think is behind that? And then the second question is, when was the last time you talked to him? Well, it's surprising that uh little Lucid has attracted so much of his attention. We must have something, something going on to do that. Uh Yeah, and, and regarding my, my package, which has been so, so misreported, um my uh my, my, the package that you're, you're referencing was all very, very, substantially, very high percentage in shares. And I sold not one of those and it was all performance based from because iiiii I co founded the company took it public and it was a recognition of all that, that, that good work. Yeah, I made the journalist error of asking two questions at once. So I'll, I'll restate my second one, which was, when was the, uh the last time we've spoken? That was when I, when I handed my resignation to him, when I was at Tesla. How did that go? Well, you might imagine. Ok. Um One more, one more ian related question because it's very newsy in the last day or two. He has, um, come out with a sort of full fledged support of uh former president Trump in his re election campaign. Um He has also, uh there's reports that he is now, um, um I guess giving 45 million a month uh to Trump's a Trump associated PAC, I'm curious there, there are some Tesla uh customers who may be fine with that or, or like that. Others, not so much. I I'm curious if you see any impact on your business, potentially from Iwan, sort of stepping into politics in a big way. Well, I think this is another salient example of his level of distraction, Tesla used to have the lead in electric vehicle technology. They truly were the pathfinder. There was an absolute laser focus there and I think that now the man has passed to Lucid just this morning, we formally announced a landmark, a technological landmark that we were able to achieve 5.0 miles per kilowatt hour for an electric vehicle. This is a major step forward in saving the planet. This is the most efficient use of energy achieved by any electric vehicle. We've registered also a record 146 MP G and these are not claims by Lucid. These are validated by the Environmental Protection Agency and this puts Lucid at least four years ahead of Tesla in what I think is a critical technology race to help save the environment. Do we have any questions from the audience? I have a few more. Um I saw one back here first. Please just tell us who you are and try to keep it concise if possible. Van Bar, then co founder and CEO of Nana Jason, you touched upon in the beginning and Peter you were just ending on it, your discussions with regulators in DC in this space with Transportation, not only the Department of Transportation, but also Congress. How has that evolved because they have to be your partners in this. Uh And is that 2035 goal, Jason that you touched upon having discussions in DC on a federal level? Totally, I'm actually headed towards DC next week because I see a responsibility from someone like myself to help guide the knowledge of the space. Because the decision makers, they're making decisions which will last potentially a generation or more. They need the wisdom of Solomon and it's very difficult for them to get their heads around this weird and wacky world of evs. So I'm delighted that we can play our small part in providing technical data so that their decisions can be based upon facts and best evidence. There, there's another Trump administration potentially help or hurt your vision for Lucid. Look, I'm politically agnostic, what my vision is to really accelerate the uptake of not just sustainable evs but the evs which are affordable via their sustainability. And this is critical. This isn't just chasing the semantics of a technical solution with technical excellence. If we can build evs which go further with less batteries, we go to the very heart of the, the, the, the, the the main barrier for ev adoption, the cost of the battery and that's what my focus is not politics. I'm gonna come to you in one second. I do have one more question. I, I, you know, you are a public company but you are 60% or more owned by, um, the, the Saudi Arabia Sovereign Wealth Fund. Um, they've invested more than 6 billion in your company. I think you have enough cash right now to sustain the company through middle of next year. Is that correct? Yes. What kind of guarantees do you have from them that they won't walk away at a certain point and go to plan B. First of all, they have been the perfect partner long term. And this partnership transcends a mere financial investment because we're in this together. Long term. They have a vision for their country to, and it's a bold vision to transition their country away from fossil fuels to a sustainable economy. For 25. We are a cornerstone of that. We're in this together. So you don't, you don't fear they want our cars as much as we want them. I can maybe almost as much as I want to do this. We're in this together now. I can't make promises for them. Absolutely not. And it would be very imprudent for me to do that, but to date, they have been wonderful and outstanding and strong long term partners with a shared vision. Let's try one more quick question here. We have about a minute. Hi. Um Thanks for the opportunity. I'm a co-founder CFO of the next Gen battery company and two questions. One is I heard because of the more and more harsh competition for the price, particularly with the Chinese EV makers. Nowadays, car O ems are more interesting cheaper battery rather than high energy density battery that was very popular 34 years ago, if it's true or not. And secondly, unlike um also you say bat or lithium metal bat that may or may not take 10 to 15 years for the commercialization. What if you have the battery with high energy density, high power density with safer features with a cheap price and must production visibility within 23 years. Is it your or not? Well, of course, that's a panacea. Is it in my interest? It would be, it's music to my ears, but we have to trade multiple, multiple attributes cost gravimetric energy density and, and just the scalability of that. Our technology, our advancements works with high energy batteries or low energy. It's equally applicable. We're out of time. Thank you so much. Thank you for the great questions as well. Thank you. Thank you. Thank you so much for being with us.