Sherry House : And then just from a financial perspective, the way I think about it is much higher asset utilization, not just at the stores, of the service centers, to the sales staff. But also we’re sharing a paint shop. We’re sharing powertrain, we’re sharing general assembly. So there’s going to be a number of areas where this is just going to give us more flexibility as a company to really respond to the demand signals that we’re seeing in the market.
Peter Rawlinson : Absolutely. I mean Air and Gravity will go down the same line. So you’ll actually have the same production line that we built in the factory, you might see one Air and a couple of Gravities, a couple of hours, three or four Gravities and they’ll be coming live alongside each other. And that’s a real economy of scale.
Steve Fox : Great. That’s all very helpful. Thank you.
Peter Rawlinson : Thank you. Thank you.
Operator: Thank you. Just a moment our next question please. Next, we have James Picariello from BNP Paribas from Exane. Please go ahead.
Unknown Analyst: Hi, guys. This is Jake on for James. So first, just looking at — just looking at your liquidity, it looks like we’re looking at about a $900 million cash burn in the — per quarter in ’25. First, can you confirm if that’s accurate? And then how much of that is tied to the Gravity launch versus just continued run rate on the Air?
Sherry House : Sure. So the free cash flow this quarter is actually lower than what you just cited by a couple of hundred million. And then your second question was about the Gravity launch. And what was the question related to the Gravity launch?
Unidentified Analyst: Just how much the cash burn is tied to the Gravity launch versus continued run rate on the Air?
Sherry House : Sure. So — maybe I’ll answer that a little bit on the CapEx side. So you’ll see that we guided our CapEx down to $1 billion to $1.1 billion for the balance of the year. Now we’re not giving guidance, but you can do the math. You can see that we started the year with a capital CapEx guidance of around $1.5 billion to $1.75 billion. What we were able to effectively do is we were able to move roughly $500 million of that CapEx for 2023 into 2024. So when you get into 2024, we do expect to have about $500 million of CapEx spend to finish the launch in the facilities as well as the machinery tooling and equipment associated with that Gravity onboarding. And so we did recognize some savings. So that’s why it’s not as high as $1.75 billion.
In totality, but that will be related to the Gravity. We also have some vendor tooling as we move into next year. Probably spent about third of the vendor tooling in 2023, about two thirds of that yet in 2024. So the Air, the majority of the spend has already occurred, of course, you have people that continue to be on carryover product, continuing to make advancements and improve the product but the spend on an engineering level and an R&D level is really shifting into Gravity and then also the midsize as well.
Unidentified Analyst: Perfect. Very helpful. And then loss looks like ASPs in the third quarter took a pretty big step down as pure mix ramped up. How should we expect that to trend in the fourth quarter as we see more Saudi shipments and you guys strip the stock higher? Thank you.
Sherry House : Yeah, you’re right. So as we went from Q2 to Q3, we had an ASP drop. That was partly expected, as I guided last quarter, I talked about how we were going to be introducing the Pure and larger numbers in the U.S. in that we were also going to be ramping shipments and deliveries into Europe and KSA, but that’s small on a comparison, a percentage basis as it relates to the U.S. deliveries in Q3. So as we move to Q4, we continue to see the U.S. as being the dominant market. We do see KSA and Europe increasing. But I would guide that it’s going to be relatively flat. I think it will be a similar mix as you’re seeing in Q3, as you’ll see in Q4.
Unidentified Analyst: Okay, thank you.
Operator: Thank you. I would now like to pass back to Maynard for closing remarks. Thank you.
Maynard Um : Thank you. So this concludes Lucid’s third quarter 2023 earnings conference call. Thanks, everyone, for joining us today. And you may now disconnect.
