Business Description

DESCRIPTION OF BUSINESS Overview Lucid is a technology company that is setting new standards with the world’s most advanced EVs, the award-winning Lucid Air and Lucid Gravity. Throughout the notes to the 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 December 31, 2025, the Company has incurred operating losses and negative cash flows from operating activities. For the years ended December 31, 2025, 2024, and 2023, the Company has incurred net losses of $2.7 billion, $2.7 billion, and $2.8 billion, respectively. The Company had an accumulated deficit of $15.6 billion as of December 31, 2025. The Company completed the first phase of the construction of its AMP-1 in 2021, transitioned general assembly to the AMP-1 phase 2 manufacturing facility and completed the SKD portion of its 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 CBU portion of AMP-2, and build a network of retail sales and service locations. The Company has plans for continued development of additional vehicle model types for future release, 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 SIDF with an aggregate principal amount of up to approximately $1.4 billion, the ABL Credit Facility with an initial aggregate principal commitment amount of up to $1.0 billion, and the GIB Facility Agreement with an aggregate principal amount of approximately $266.1 million for two revolving credit facilities. In March 2023, the Company amended the GIB Facility Agreement to combine the two revolving credit facilities into a committed $266.1 million 2023 GIB Credit Facility. In February 2025, Lucid LLC renewed the 2023 GIB Credit Facility and entered into the 2025 GIB Credit Facility maturing on February 24, 2028, to increase the credit facility committed amount from SAR 1.0 billion (approximately $266.1 million) to SAR 1.9 billion (approximately $506.6 million). See Note 6 “Debt” for more information. In May 2023, the Company entered into the 2023 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 for aggregate net proceeds to the Company of $1.2 billion. In May 2023, the Company also entered into the 2023 Subscription Agreement with Ayar, pursuant to which Ayar agreed to purchase from the Company shares of common stock in a private placement for aggregate net proceeds of $1.8 billion. In June 2023, the Company completed the public offering pursuant to the 2023 Underwriting Agreement for aggregate net proceeds of $1.2 billion and also consummated the private placement to Ayar pursuant to the 2023 Subscription Agreement for aggregate net proceeds of $1.8 billion. See Note 16 “Related Party Transactions” for more information.…