Lucid Group, Inc. Common Stock

Information management · Information systems and reporting

We are continuously expanding and improving our information technology systems. Our volume production of our current and planned future vehicles will necessitate continued development, maintenance and improvement of our information technology and communication systems and networks in the United States and abroad.

Technology infrastructure · Disaster recovery and business continuity

Some of our systems will not be fully redundant, and our disaster recovery planning cannot account for all eventualities. Any problems at our or our third-party service providers' or vendors' data centers or cloud infrastructure could result in lengthy interruptions in our service and our business operations.

Cybersecurity and data protection · Insider threats and access controls

Certain of our employees have access to sensitive information and proprietary technologies and know-how. While we have adopted codes of conduct for all of our employees and implemented detailed policies and procedures relating to intellectual property, proprietary information, and trade secrets, we cannot guarantee that our employees will always abide by these codes, policies, and procedures.

Digital transformation and innovation · Technology obsolescence and evolution

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.

Legal and litigation · Employment and labor law compliance

We will need to hire, retain, and train a significant number of employees to engage in full capacity commercial manufacturing operations. There are various risks and challenges associated with hiring, retaining, training and managing a large workforce, such as establishing and maintaining efficient communication channels, procedures and rules of conduct.

Legal and litigation · Product liability and warranty claims

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 maintain warranty reserves to cover part replacement and other vehicle repair needs, including any potential software upgrades or warranty claims.

Tax and financial reporting · Internal controls and compliance programs

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.

Industry regulation · Safety and environmental regulations

We are subject to various environmental, health and safety laws and regulations that could impose substantial costs on us and cause delays in expanding our production facilities. Our operations are subject to international, federal, state and local environmental laws and regulations relating to the use, handling, storage, disposal of and exposure to hazardous materials and batteries.

Human capital and workforce · Key personnel dependence and succession

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.

Supply chain and procurement · Supplier operation and dependance

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 the Lucid Air and Lucid Gravity, 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.

Project and contract management · Project execution and delivery risks

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.

Core operations · Operational disruption and business continuity

We may be unable to adequately control the substantial costs associated with our operations. We require significant capital to develop and grow our business and have incurred and expect to continue to incur significant expenses, including leases, sales and distribution expenses.

Capital structure and performance · Financial performance volatility

We have incurred net losses each year since our inception, including net loss of $2.7 billion for the year ended December 31, 2025. As of December 31, 2025, our accumulated deficit was $15.6 billion. We expect to continue to incur substantial losses and increasing expenses in the foreseeable future.

Market and investment · Market volatility and economic cycles

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. It is difficult to predict our future revenues and appropriately budget for our expenses, and we have limited insight into trends that may emerge and affect our business.

Social and demographic · Public perception and reputation

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. 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.

Geopolitical and trade · Regulatory and policy uncertainty

We face risks associated with international operations, including actions that may impede global green transition priorities or policies designed to reduce environmental sustainability efforts. 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.

Innovation and product development · Time to market and commercialization risks

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. 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.

Innovation and product development · Intellectual property protection and infringement

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. Our ability to compete effectively is dependent in part upon our ability to obtain, maintain, enforce, defend and protect our intellectual property and proprietary technology.

Reputation and brand · Brand damage and negative publicity

Our business and prospects depend significantly on our brand. Our business and prospects heavily depend on our ability to develop, maintain, protect and strengthen the 'Lucid' brand association with luxury and technological excellence. With social media, any negative publicity, whether or not factual, can quickly be disseminated and harm consumer perception and confidence in our brand.

Corporate governance · Board composition and independence

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. As of December 31, 2025, the PIF, both directly and indirectly through Ayar, held over 50% of the voting power for the election of our directors.