Lucid Motors‘ interim CEO Marc Winterhoff addressed the external pressures on its supply chain on Thursday, as the company ramps up Gravity production for international deliveries and prepares to manufacture the first model of its new mid-size platform.
According to the former Chief Operations Officer — who has been serving as CEO for a year — the EV maker is currently reworking its supply chain as external disruptions “don’t seem to slow down.”
Middle East Conflict
Iran’s new supreme leader Mojtaba Khamenei said on Thursday that the Strait of Hormuz should remain closed.
The automotive and logistics industries have been closely watching the impact of the conflict as most commercial shipping through the waterway has been blocked or attacked since the conflict began twelve days ago.
The strait handles roughly 20% of global oil supply and is a critical route for component shipments between Asian suppliers and Middle Eastern manufacturing hubs.
Winterhoff did not reference the Iran conflict directly but said Lucid‘s Saudi assembly plant — located in the King Abdullah Economic City on the country’s west coast, near Jeddah — remains on track for full production in late 2026.
Speaking earlier this week at a Cantor Fitzgerald-hosted conference, he said Lucid‘s Saudi assembly plant — located in the King Abdullah Economic City on the country’s west coast, near Jeddah — remains on track for full production in late 2026.
“Obviously, we don’t know how things are developing. But so far, I mean, it is on the other side of Saudi Arabia,” he said. “Right now, we don’t see a lot of impact there, and we’re confident that we can just continue with getting everything ready.”
The plant sits on the Red Sea coast, approximately 1,500 kilometres from the Strait of Hormuz and the Persian Gulf, where the disruptions are concentrated.
However, Lucid‘s supply chain still relies on components sourced from Asia, Europe, and the United States — routes that could face delays or cost increases if the shipping disruptions persist or expand beyond the strait.
Cost Reduction
Winterhoff kicked off the company’s first Investor Day with a presentation on the company’s next chapter: “accelerating to profitability.”
Lucid is targeting unit cost reductions of 30-40% for its Gravity SUV by 2028, driven by improved factory utilization and manufacturing efficiencies.
“As we all remember, 2025 was probably the worst year for the supply chain,” Winterhoff stated.
He flagged additional tariffs, magnet and chip supplying issues and the fires in aluminium supplier Novellis’ plants.
Additionally, the company underwent a roughly 25% reduction in bill of materials costs for the Gravity throughout 2025, according to its presentation, while they “doubled the production throughout the year,” Winterhoff stated.
The company is locking in supplier contracts for its upcoming mid-size platform at what it describes as “favorable” prices — a move central to its longer-term goal of cutting unit costs by 60-70% compared to the current Gravity.
External Disruptions
However, the interim CEO highlighted that “when it comes to supply chain, we obviously have still work to do,” with the biggest challenge being current external disruptions.
Winterhoff said Lucid is actively working to make its supply chain more resilient against external disruptions.
“We are rethinking and reworking our supply chain to make sure that we will even more, even more insulated from external shocks,” he stated.
For instance, manufacturing its mid-size EV in Saudi Arabia rather than its Arizona plant will allow Lucid to sidestep US tariffs on certain Chinese-made components, the company’s CFO said late last year.
While noting that the EV maker is “in a very good position, with our bill of material costs, right now with the mid-size,” Winterhoff said on Thursday that they “need to land that last little bit that is missing.”
Production on Track
Earlier this week, speaking at a Cantor Fitzgerald-hosted conference, the interim CEO reiterated that production in Saudi Arabia is “still on track,” despite the most recent events in the Middle East region.
Earlier this year, both Winterhoff and Faisal Sultan — Lucid‘s President for the Middle East — reaffirmed that timeline.
“So it’s all still on track,” the executive said. “So far, everything remains the same.”
Lucid‘s AMP-2 is located in the King Abdullah Economic City (KAEC), in the west coast of Saudi Arabia, near Jeddah.
“Obviously, we don’t know how things are developing. But so far, I mean, it is on the other side of Saudi Arabia, Jeddah, it’s not necessarily close to Iran,” Winterhoff added. “Right now, we don’t see a lot of impact there, and we’re confident that we can just continue with getting everything ready.”
