Lucid CEO Peter Rawlinson on Computer Automotive Engineering

Published Jun 20, 2024, 9:28 PM

Bloomberg Radio host Barry Ritholtz speaks to Peter Rawlinson, chief executive officer, chief technology officer and member of the board of directors at Lucid Motors Inc., where he is responsible for the company’s strategy and execution, as well as the creation and delivery of all Lucid products. Before Lucid, Peter was vice president of vehicle engineering at Tesla Inc. and chief engineer of the Model S. Before joining Tesla in February 2009, he led vehicle engineering at Corus Automotive. He was previously chief engineer of advanced engineering at Lotus Cars Ltd. and principal engineer at Jaguar Cars Inc. 

Bloomberg Audio Studios, Podcasts, radio News. This is Master's in Business with Barry red Holts on Bloomberg Radio.

This week on the podcast What can I say about Peter Rawlinson? Not only is he the guy who developed the model S from a clean sheet of paper for Tesla, but he's the man behind Lucid. He joined as chief Technology Officer and eventually became CEO and drove the launch of the Lucid Air, probably the most awarded car in the modern era. It has sucked up every single accolade that you can have for either an electric or traditional car. Five hundred miles of range, twelve hundred horsepower on the top of the line. Not only that, they have a mid tier car that's about half the price of the six figure one. They're aiming to release an suv towards the end of this year, and a low cost car in the forty to fifty thousand dollars range in the coming years. This is a fascinating company. Rowlinson has an amazing history in the industry, Lotus, Jaguar, Tesler, and now Lucid. I thought this conversation was absolutely fascinating and I think you will also with no further ado my conversation with Peter Rawlinson.

Great to be here, barring, great to have you.

So let's start a little bit with your background. You went to Imperial College at the University of London. Was the career plan always automotive engineering or what were you thinking?

I didn't know what I was going to do. I considered at school or something creative. I knew want to design things, and in the end I did a mechanical engineering course because it gave me the greatest optionality.

Imperial College has some amazing alumni, Sir William Crooks who invented the vacuum tube, HG. Wells, Peter Higgs of Higgs Boson, Sir Alexander Fleming and Palinacillin. What was your experience like at Imperial College.

Well, it was quite an experience for a kid from Wales in the big city.

So let's talk a little bit about your automotive background. Chief engineer at Lotus Cars, Principal engineer Jaguar, two storied marquees. Tell us a little bit about your experience with both of those.

Yeah, I mean it was a wealth of experience. I think if we look at my days at Jaguar, it was a fascinating period because it was the dawn of the use of computers to design cars. Up to that time, cars had been designed on drawing.

Boards manually pensilv.

Parsley.

Yeah, absolutely, we took in nineteen eighties and I was very fortunate that Jaguar made a big investment and a big push to pioneering the use of computer to digitally design a car and it never been done before.

Seriously, I was.

One of the first people in the UK to use CAD computer aided design prior to Jaguar, but it was a Jaguar that we really started using it in earnest and we used it in a joined up way with CAE computer aided Engineering, so we could do the stress analysis by finite element analysis, which was all new stuff. It was cutting edge, and we found a way of transferring files from colleague to colleague, from their computer, from terminal to terminal, and effectively we developed our own intranet, which is known as an intranet. Now, well this was long before the Internet. We didn't even have a name for it, and we were just transferring files and we created this methodology of a digital process to design a car, which was totally revolutionary in terms of how all the systems were designed, the plants, how the designs were shared digitally, and how they were analyzed computationally for stress and crash performance.

So technology has been a core part of your process for bringing cars from a clean sheet to actually a sellable product totally.

And I've been fortunate. I've always worked, until more recent years at the cutting edge in advanced engineering. I was responsible for advanced engineering at Lotus and at Jaguar was responsible for advanced body structure design.

And it's that.

Sort of technological advancement that is really central to my career and my being really.

And also trying.

To do kind of the impossible with very small teams of people, super smart people, very joined up, everyone knowing what's going on, in the power of kind of an elite team of really capable people, kind of like special Forces.

I love that analogy. So you go from Jaguar and Lotus in twenty ten to Tesla as VP of Vehicle Engineering and chief engineer of the Tesla Model Less. When you arrived, that was a clean sheet piece of paper.

Well, I actually I joined in February nine, way before twenty ten. It was formally announced quite a lot later. But I actually spoke to a guy called Leland Musk who called me an in England in January, and went out and met him in January nine, and I was there in the company in February nine. Long before there was a conceptual prototype of models.

Back in those days, it was a little Lotus alon where they took out the engine and dropped in a bunch of batteries and electric motors. It's hard to imagine that that beginning eventually led to the Model S. And while the Model S is certainly long in the tooth, it's been around a while. When that car came out, it was pretty innovative and unique in the world. Tell us about your experience helping to develop the Model S, the car that arguably changed the entire automotive world totally.

Well, it was a labor of love. I was working crazy hours, I working regular one hundred hours a week to achieve that against all odds. And so when I joined the company, start had already been made. They'd been working on it for about a year, and it was a false storm. It was never going to work. So I had a difficult decision to make the first week I was there, I had to go and tell my boss, my new boss, that really need to start again with a clean sheet, and he had the wisdom to agree with me, and so we started a fresh modthe less from the ground up, and that was probably the second week of February nine.

And then the car comes out in twenty twelve.

It was record time, and it was just it was a crazy because I mean I actually had a team of about six people to start with. Everyone had left and it was obvious I had to start from scratch, from a clean computer screen. So I had to hire the team, attract people to this company that no one had heard of, which no one gave a shot of being successful at There.

Was certainly a lot of skepticism in the early.

Year totally, and there was this misconception wasn't sufficient expertise and experience to do to do a car let alone, something which was really cutting edge. But actually having that clean sheet and having the authority the go ahead to recruit my team and hand pick my team, that's what changed everything, because I could actually hand pick an elite team of the best engineers in the world, and I called everyone i'd work from with before. That's why a lot of Brits came out and designed models. It was very much an international effort, but a lot of British people because there's people I knew from my paths from Jaguar exactly exactly, and it's sort of really we set up Teslo Engineering. There wasn't a place to do it, and I was actually working in SpaceX. I had my SpaceX security parts and I found that the second floor of SpaceX was unused. It was early days at SpaceX. I was just concrete floor. Let's say, can I have this. Let's set up Teslo Engineering upstairs in SpaceX.

Wow.

And we rolled some gray carpet do put some desks there and about probably about twenty of us actually designed the model less from the ground up through two thousand and nine, and then eventually I grew the team to about one hundred and fifty people through that three year period. But it was a fascinating time. It was when Tesla was at the cutting edge. And the interesting thing was the person who drove me the most was myself, because here I had this incredible opportunity in life to show what was possible and show what I could do. And really one of the main weapons I had was digital engineering to take everything I'd learned about cutting edge computational engineering and simulation, digital wind tunnel, digital everything. So therefore we could actually go later on prototypes and effectively go for computational prototypes tens of thousands of times to get things right. So when we actually built a proper prototype, and the first proper prototype was late twenty ten, relatively late. And this was a core philosophy of my engineering process to really turn things on the head. Normally there's an emphasis on getting an early prototype so you can learn early with your mistakes. My process was the absolute antithesis. Make all your mistakes on the computer, tested one thousand times, ten thousand times, and then cut the metal when you're damn sure, relatively late, and that prototype will be really good. And that's what we did, and that's how we reduced the time scale, and that car was in production three and a half years from the day I said, right, let's design it from scratch, back in February two thousand and nine.

So we're going to talk a little bit more about Tesla later, but you said something that caught my ear. At the time, the nine to twelve era Tesla was at the cutting edge. You're implying they're no longer at the cutting edge. Is that the case?

I think that the mantle has passed to Lucid. I think Lucid is now at the cutting edge. I think we are the company with a true sense of mission. This week, I was proud to announce that we've created a landmark number in the development of the ev which is going to have a profound impact upon the planet, and that is achieving five miles of range per kilar.

What tower of energy.

That's a giant efficiency.

It's a giant to leap forward.

Like a lot of the cars out there are two ish if they're lucky three two.

You're very well versed in this barrier. Absolutely my car, guys, you know your stuff. And why this is important is that we need to address the barriers to widespread adoption of electric car. And the first barrier, it was range anxiety. When we launched Lucid Air in the autumn the fall of twenty one, we had a range of five twenty miles with our very first product. Nobody believed it as possible, and we did that with the modest battery size. It wasn't a cumongous It wasn't dumb range with just stuffing loads of anyone can do that. And you know this is this is cutting edge stuff. And why this is important is the next barrier to widespread adoption is the cost of ownership, the cost of an EV. Why why not everybody jumping to EV's now? It's because of cost. And if you look at the breakdown of the cost of building the bill of materials all the parts that you put into an EV. For a high end EV, about thirty seven percent of that value is the battery pack. But for a more affordable family car it's over forty percent. There is no gasoline engine car equivalent to this balance of cost. So what we are doing at LUCID is addressing the cost of the batteries, and we're doing it in an unorthodox way rather than saying, right, can we make batteries cheaper through an economy of scale, or actually saying do we need that many batteries in the first place? Can we go further with higher technology? We've reinvented the electric motor, we've reinvented the inverter to go further with less batteries in the first place. And so if you look at our products today. If you look at the Loociderer Pure, we're able to do the car that's in production right now. For any journey you take from A to B, whether it's from home to the office, down the shops, on your vocation, you will use less electricity to go from A to B than any other car on the market today, par none. And because it's the most efficient, and because you're able to use less electricity, not only will it cost you less as a user, but it means you don't have to carry such a large battery pack around, and that means better use of the world's precious resources. Less minds for lithium, nickel, cobalt, less dependence geopolitically in this world for the US, and this is of a profound significance. We can go further with less through technology.

Let's talk a little bit about what led you to join Lucid. You helped bring out the Models. You're chief engineer of the Models project when you were at Tesla. So let's start with that car. Not only did you bring it to market incredibly quick, it won multiple awards Onomabile Magazine, Automobile of the Year, Motor Trend, Car the Year, All sorts, of big wins. What made the model ass so successful.

I think it was a big picture thinking and right down to detailed execution. To have both, I think you need to have a strategic oversight of joined up thinking of how systems interact relative to each other as a complete ecosystem, and then you need to have that loving attention to detail at I mean, there was there was a there was a well known for my mantra that every millimeter counts, and I felt that every gram counts, particularly with an electric car, where every every duel of the energy is a precious commodity. So it was really a very interesting intellectual puzzle because when I arrived at Tesla in February nine, prior to my arrival, friends von Holtsaersen, who was the design chief, arrived around I think it was about Autumn eight, no August eight, and before I had arrived, the exterior styling design the shape of models had been signed off on approved by between Frances and Elon, and that was pretty well predetermined before I arrived. Now that set in stone effectively the outer shape constraint the parameters that I as an engineer could work to. Now that's very different from how we approach Lucida, and I can go on to that later, but this presented a very interesting and compelling intellectual puzzle, a three D puzzle. How was I going to fit all the battery cells in to give that car, to endow that car with sufficient range? How was I going to fit in motors, transmission, drive shafts, suspension people, packaged leg room, crumple zones, cooling, just space for luggage, all of that within that predetermined out of shape because it'd been signed off, and I realized within a millisecond that that that wasn't going to change much. So it was a fascinating three dimental puzzle. It was like a tetrix on steroids, tetras on steroids. To solve how we were going to fit all these parts in the car. And I can give you. I can give you a very interesting example. We wanted to have a flat floor in the car to differentiate it no transmission tunnel inside the cabin and traditional car's got a transmission tunnel.

At the rear.

And because that is an obstruction to comfort for the.

Occupants middle seat in the back, Oh.

Who absolutely exactly, And so there was a design to have a fully flat floor but one of the big loads that you have to design force structurally in a car at the seat belt seat belt pull tests, particularly the lower anchor points which goes through the seat and through the seat mountains into the floor, and so flat sheet metal floor wouldn't have been strong enough. So it's very clear we have to link the battery pack structure under the floor through and make the battery pack contribute to the seat belt strength. Yeah, exactly, exactly. So the seat belt load to go through the floor through a long bolt through the cross member which is in the battery pack, and these had to go in a specific location where the people fitted, and so that starts determining where you can put the cross members in the battery pack. So when I started laying out the architecture of all the cells fitted in that battery pack, I noticed that we could actually divide that into seven elements along the rocker section and we'd be able to get these cross members in precisely the right point. And why this is a very interesting example of joined up thinking is that then led to the design of the module of the battery pack, and we ended up with sixteen modules of four ndred and five fifty cells on the model less and actually it had a determining factor upon the voltage that the car ran at.

Can you believe that.

The sequel anchorage structural loads starts splitting up the pack into discrete modules, which influenced the electrical voltage. One thing truly joined up thinking.

One thing leads to the next, which leads to the next, and every decision you make has ramifications everything else totally.

And it's not the only thing. Because we knew we were we didn't have silicon carbide switching technology in those days, so we were using insulated gate bipolar transistors, which was limiting us to you know, around four twenty four thirty folds. So we knew what sort of range of and we knew there could be some peak overloads, that voltage spikes that we had to cover for. So we knew roughly the voltage range that we could hit. But it was sort of absolutely consistent with that how many cells can we fit because each cell had amount of energy and so the number of cells will determine the range of the vehicles. He wanted to get us to maximize that as well, and even the gaps between the cells, and I was able to do that without changing the wheelbase of the car from the original design, which was quite an achievement, I can tell you.

So now let me pull you back from the engineering wonkiness you come off of the giant success of the Model S. What made you decide, Hey, that was fun, let me go elsewhere and start with a clean sheet, rather than stay at Tesla and work on whatever their next vehicle was.

I'd glad you ask me that, because there's a actually there's a sort of interlude between the two. So while I was doing all this, my mom, my mother was living in England, and she's a widow, and she was in her nineties and her health was failing, and I just had to go back. So I resigned my position at Tesla in January twenty twenty. Was I went home for Christmas end of twenty eleven and it was clear that mum needed me, and so crazy I gave up my job at Tesla, flying around with El on his jet and I went home and I was literally cooking dinner and washing the dishes for more and then her felt. It's only when she passed that I really came out and joined a little company and set up Lucid from.

It So were there any regrets after not going back to Tesla? What did Elon say to you? You were a key person for the success of the Model Ass. He recruited you. How did he feel when you said I'm going to do something else.

Well, he did have the good christ to ring me up and asked me to come back, but it was my decision was made.

So what was it like working for Musk? He's got a little bit of a reputation. How was your relationship? How did he affect what the Model Ass turned out to be?

So it's very interesting.

I think there was a common narrative that he pushes everyone his subordinates really hard.

True.

I never had that experience, really because I pushed myself so crazy how to do it that there was someone pushing me harder than he ever could, and it was me because I'd had years and years of wanting to do something like a model less and I could never have done it at say Jakie or Lotus. But what I had was the freedom of picking hand picking brilliant engineers, and he was totally aligned with that. We totally had a shared vision and SpaceX was built upon that. And I was working in SpaceX that one in great engineers worth one hundred mediocre people. It's all about how can you track the best brains on the planet to come up with a sense of mission. And that's what I did. And actually I remember I actually even had a math test for all my candidates and it was like, never mind, what qualifications You've got to do.

This math with me? People.

I've thought them all through the ringer and I personally into everyone. And actually I built Lucid that way. I mean, I don't know, I don't these days, but if you look at the core capability, the core engineering talent at Lucid, and many of them been with me for many, many years, and a lot of my Tesla modelesque team came across with me. And literally we've got hundreds of people have come across from Tesla to Lucid. Lucy's like a beacon of light now that hundreds of people have come across and and they've drawn to this flame that we are going to be the best technically, whatever whatever it takes.

We're going to get into Lucid in a few moments. But you mentioned space, ax, I have to ask you a question. Not only is Elon running Elon Musk running Tesla, he's running space Ax, he's running Twitter or ostensible if he handed it off to somebody, but it's pretty clear he's still very involved. He's running Xai. That's four companies. How can one person successfully manage running for a company? Steve Jobs ran Apple and Pixar, and he was pretty hands off at Pixar.

Well, I think there is a worrying distraction there, and I think that's why the mental has been passed to Lucid. I pledge to my whole team, my investors, all our shareholders that I'm fully committed to Lucid alone and I'm all in. I'm just one, one task, one company. And that's probably why you hardly ever see me in the media, because it requires that degree of commitment to set up a car company.

So the implication is if you're running for companies. And I don't want to put words in your mouth, but are you implying he has taken his eye off the ball at Tesla?

I think that you've got to look at who is now leading technically. I mean, we've got the highest voltage car, We've got the most efficient, we've got the most aerodynamic, we've got the longest range, Who've got the highest performance. We've got the best battery engineering, We've got the most advanced motor controlled algorithms. I think we've got the best battery management system control system on the planet. If you look at all the breakthroughs that we're making, it's very clear that back in two thousand and nine to twenty twelve, Tesla was doing that, and today right now it's Lucive that's doing it. And someone needs to carry this torch forward for the benefit of all humanity, and we're happy to do that.

To me, the thing that perplexes me more than anything about Elon Musk is if my product that I am trying to sell is supposedly going to reduce global carbon emissions and and adapt to better outcome for global warming, why tack hard to the right and get in bed with people who think global warming is a hoax? Like your client base, are people concerned about global warming? I don't understand the whole right wing trolling, crazy sort of stuff that's happened over the past year with him. You've watched him. I know it's been a good long time, but any explanation for what's going on there.

Well, I think it's a worrisome trend of distraction. I'm an engineer and a scientist, and I believe is compelling, overwhelming evidence that global warming is real. It's happening all around us. You'd have to be blind not to see that. And I'm only committed to doing all I can. I will not rest to use my life energy to try to help this generation in future general. And this is the sense of mission that we carry at LUCID to really advance the adoption of sustainable mobility, and we have to do that with a sense of utter urgency, and these distractions have no place in that mission for me.

Really interesting when the Model S came out, I know it was less than five years to make it, but it seemed as if the technology built into the Model S was ten years ahead of everybody else, maybe seven years, but nothing else was like that in terms of the over the year updates, the interface, the visual camera system, the self driving. How big of a lead in any of those technologies does Tesla have or are you suggesting that they're pretty much number two or worse in all of those technologies.

Virtually that you've mentioned there behind us that we're about four years ahead of Tesla. I would say that in terms of autonomous driving capability, they're marginally ahead of us, but not a long way. They're not at Level three, they're at a level two plus something. They're a little bit ahead of us, but that's very deliberate. I've chosen to be a fast follower. But if you look at just about everything else, we are significantly ahead in the core powatrain technologies and also some of the I mean you mentioned over the air. I let me give you an example in terms of that when we launched Lucid and a lot of people don't know this, we launched Lucid Air in the fall of twenty twenty one with a revolutionary twelve volt architecture that we embodied a Nodle Ethernet data super highway in the car. That was in twenty one. More recently, Tesla's finally got to that with the cyber truck. But that many people don't realize. They think it's an innovation of cyber truck. It's actually Tesla did it too, and a bit years after Lucid did. Lucid innovated with that and Tesla followed. If you look at our ota capability, it's without power. Yes, over the air updates. We've done about seventy five eighty updates. They're coming regularly, thick and fast. And let me give you an example. We can actually we've pioneered a type of over the air update which is unique. That is a diagnostic tool. So there's something new that's gone wrong with one of the supplier's parts, we can lab test for a test proceded that would identify the nature of the fault. Then we can code that test in our algorithms and we can over the air that And we've actually done this, so it's almost like getting a dose of penicillin that the car gets and it can actually self dying moves and determine if there is a new fault from the supplier. This is cutting edge stuff. And more recently, as part of the seminal announcement this week that I made that we're going to get to five miles per kilater. Part of that, a part of that is hardware, but a chunk of that advancement is due to some new motor control software and we will be over the air relaying that transmitting that to.

All our fleet.

So in other words, you're going to improve the efficiency of previously sold car totally and they'll step up to five.

They won't all, but they will all improve that incremental part which is due to that software, the effect of that particular software. It's only a car that we're going to launch very soon we'll have the Magic five, but they'll all benefit from this.

Huh. Really interesting Again, I don't want to put words in your mouth, but I'm going to repeat what you said in your polite British ways in my course American ways. Elon Musk is running four companies. He's distracted. Tesla was the leader in all these technologies battery, motors, software, over the air, down the road and other than self driving. They have lost the mantle of leadership. It sounds like you're saying across the board in ev technology.

Yeah, let me give you some metrics.

If you look at for many years we supplied the batteries to the World Championship for Electric motor Sport.

This is related to the deal with Aston Martin.

Quite separate, quite separates, and we used all that knowledge from four years of successful motor racing to all the teams in the World Championship for Electric Motorsport that we supplied the batteries. For all that expertise has been embodied in our battery management system are BMS and our battery systems in our current CUS and actually right today we supply the front drive unit, the inverter and motor and transmission in the nose of all those race cars. That is the most advanced unit in the world today. It is nearly fifteen horsepower per kilogram. If you look at what Tesla is doing with its PLAID technology, it's about three point nine horse power per kilogram.

This is four x yes, And if you.

Look at our mainstream production technology that we put in listed air, we get up to nine horse power per kilogram. Plaid is three point nine. It's not like we're thirty percent to hent Huh.

Really really interesting. So the old philosophy of race on Sunday, sell on Monday is still kind of real indeed.

And do you know what, Barry, what's remarkable about this? I think that adage was true in the in the thirties and forties and the fifties. But I've been in vanced engineering in road cars all my life. I've always thought it doesn't happen what goes on the race car. The technology never comes back in and finally I've had it happen and it's genuine. What we've learned on the racetrack with our battery technology is embodied in every Lucid air we've ever made.

So let's talk about what took place in your post Tesla career. You join Lucid as a CTO. What responsibilities come with that role at an EV shop?

A lot of responsibility for the product, for the complete car, engineering, the.

Vehicle, everything batteries, motors, and everything across software, across the board. I don't think a lot of people realized that Lucid began a long time ago as at Tiva. I'm not pronouncing it right, it was an electric battery maker. How do you explain that that transition from just making electric batteries to saying, oh, let's let's become an EV manufacturer.

Yeah, I think I think there was a recognition that there wasn't a true value proposition in just approaching that.

Actually, Tesla in the.

Early days had a similar approach that it was only later they thought, well, really that the car is the true value generator. So I was approached, would I like to join this little company which really had very little at the time.

And they had launched in like two thousand and six.

They've been a long long time, so I was I was approached much later than that, and it wasn't until twenty sixty that we really created Lucid and really focused on creating the Lucid.

Air, the best car in the world.

And you know, it was very clear to me that we'd have to change the name and relaunches at a different brand that was more customer oriented in facing. So Lucid was founded and created by a small group of us in twenty sixteen out of the Little Mattery Company, which had been round for a long time. And that's when we really got serious.

So the co founder and the CEO of Lucid retires, you're tapped to jump into that role both as CEO and CTO. What was it like stepping into a place a founder.

Well, there was a tortuous transition at one stage, but by that time, by sixteen so many of my former Tesla team had come across to join me with this mission to create a better car, and I'd been joined by.

Some key players in the team, Derek Jenkins from Mazda. I persuaded Jack Derek to give up his job as design director from Malazda North America and joined to head up the design studio. Eric Bach came along who is his now my chief engineer and senior vice president of product and Engineering. And these are both brilliant, brilliant people who joined me pretty well in the early days and they were through this period with me and as a little team we created Lucid and we launched Lucid Air. It was December sixteen, and then it was clear we needed to have some serious money to put this thing into production.

He raised a lot of capital over the years.

Oh yes, yes, and it requires a lot of capital. And then we had a lean period through seventeen and into eighteen where we couldn't find any funding. But we had what turned out to be a very interesting card that had been played because in sixteen I became friendly with the CEO at McLaren and over a cup of tea in England in the McLaren Tech Center, English style, we decided that we'd enter the world of electric race cars. And McLaren recognized that they've got great race car experience, but they didn't have the battery pack experience. But we've got the battery experience expertise.

So let's talk a little bit about that battery pack. It's scalable, it's modular. Yes, it continued to iterate based on race experience. How much of an advantage is the Lucid battery pack versus other EV makers.

It's a significant advantage. But the biggest advantage in terms of our range and efficiency is not the pack, and this is it's the motor and invert and the complete drawing units.

So let's talk about that because and I'm gonna take a look at an engineering drawing. But when I look at at some of the internals for the engine, the motor, and I still say engine out of habit, but the motor and the transmission are integrated into one and the axle transmission goes straight through it, and so there's no differentials, there's no there's a lot of things that come out of the vehicle with this very small, very lightweight, yet high horsepower, high efficiency motor. Tell us a little bit about the engineering behind.

That, Okay, okay. So one of the.

The disadvantages when we were in model ass was that there were two different teams. One was doing the transmission, another was doing the motor. So JB Struggles team was doing the motion and I was doing the trends mission, and so you've got two different groups and where the two join.

Is a weakness.

So when I set up LUCID, it was clear we needed to reinvent the electric motor. And I can't tell you Barry that at the time that seemed crazy.

It seems crazy. You're just saying it right now, you're smiling, because what do you mean You want.

To tell you why there was a perception that you couldn't make a better electric motor, that electric motors are so much more efficient than gasoline cars. That it's done. It was designed in the Victorian area, and that was it. And it is true that electric motors can be very highly efficient. If you put one in an air conditioning tube, you run at a set speed and set load, it can be right on that peak spot of efficiency. But that efficiency trails off dramatically in any side of that spot. And if you look at electric car people don't often realize that cargoes faster ofs lower. When the motor goes faster or slow, that's what determines how fast you go, how fast the motor is spinning, and how much you accelerate, that's how much talk is being developed from the motor, how much power is being released, and the antithesis under regenerative braking. And so the task is to create a motor and inverter system and transmission that's got a much broader bandwidth of efficiency. And this wasn't even the It wasn't wasn't it wasn't even considered possible. I don't think anyone was thinking of it.

And you also not only made the motor more efficient, but you integrated the transmission to the motor.

Wen So the electrocmotor has got two parts as the fixed bit which is called the stata very simple, and the lit that spins in the middle, which is called the rotor. And the rotor really provides power as a result of how fast it spins and the talk that it transmits at that spin speed.

And if you look at.

Something that transmits tool like a propeller shaft in a car. You're a car guy, you know prop shaft, So hollow the tubellion because that's what's required.

You want to be exactly and you.

Learn that the metal in the middle does very little. That's why it's hollowed out. So I started asking, well, what does the metal in the middle of a rotor do if it's trying to transmit talk and it's electromagnetic, why does it We have to have these solid rotors, why can't we hollow them out more? Well, the answer is it does very little. We can hollow that. It should be like a tube. And then we start thinking what we can get in. And I have a brilliant engineer as a team on. My engineer and my team called Balash Palfi's Hungarian who came up with this integrating a microdifferential inside. And this was all enabled by my brilliant motor engineer, doctor Inma Dlala.

And I put them.

Both together to sit together and I said, look, guys, I don't want to have a separate motor and transmission team. I want to consider a motor transmission as a single rotary inertial system with total I want to think of it as a single unit. I want a motor transmission unit. And you might think, why do you even need gears, Well, you need gears because the wheels of a car are quite large compared with the diameter of electric motor, so you need to provide that attractive force at the contact patch of the tire, and the bigger you make the wheel, the less force you're going to have for a given talk. So you do need to have a reduction set. So we launched Lucid Air with a ratio of seven point oh six to one. Models was nine point zho to one. We went to seven point zho six to one Air and we compromise a little bit on not to sixty, but we got better mid range performance. And I always wanted mid more mid range acceleration and efficiency. I wasn't going to be racing naught to sixty with it, and so that's why we went to a seven point oh six to one ratio.

What's the power to weight ratio of that integraated and so very compact motor and integrated Well.

If you look at the whole unit, there's a drive unit, inverter motor and transmission the whole thing with the differential, it's nine point zero horsepower.

Per Kilogram's substantial.

It's substantial, but it's it's it's it's more like twenty at motor level, and if you look at the elements within the motor, it's more like twenty five. If you actually cut away the motor. So often people attribute that to the motor, but it's not. The motor is about thirty two to thirty three kilograms of the seventy four kilograms of the complete unit.

So let's talk about what making that so relatively small and light does to the design of the car. Not only are we not talking about the hump in the back seat or even in the front seat, but by making that motor so small, the floor panel of the car can be elatively flat, the wheels can be pushed further out to the corner, and the interior cabin becomes much more substantial for a car of this size.

That's right, but we'd done all that with models. But what we hadn't done, and this was the impossible step. And because electric motors were inherently much smaller than gasoline V eights and the like and didn't need all these drive shlves, we had all those advantages with model less. But what I asked was kind of the unthinkable that Lucid, Well, we know that the drive unit, electric motor and drive unit is a lot smaller. What if we really explored how small we can make this thing? Why don't we just go crazy? Let's see how compact we can make this, because if we could make it even more compact, we could have an even more profound impact upon the design of the car. And that's when I took perhaps Lucid's greatest gamble. And this is why I could never done this in a conventional car company, because what we did was whilst one team set off, my motor and inverter and transmission team set off to truly miniiturize that drive unit, the rest of the company, the rest of the engineering and design teams. We're designing Lucid Air as a car with enough leng room, transformative length, room and comfort in interior space, but much smaller on the outside, much more aerodynamic, and much sleeaker.

It's an insized car with the room of car car.

To full size. Its interior space is longer than a long wheelbase S class Mercedes, and yet on the outside it's ten millimeters shorter than a Tesla mode Less. And so I bet the house on we're going to engineer this car design the whole thing around the will be size of these dry units because we will achieve that miniaturization, otherwise it wouldn't work, and we managed to pull it off. And that's how we were able to do loose it Air. It was a huge push that the car would only work if we achieved this miniaturization. We had to achieve it to make the car work.

So let's talk a little bit about the Lucid Air, which first came out late twenty twenty one.

Yes, yes, twenty one, Yes, five hundred.

Plus mile range, the longest in the industry, five twenty when we launched five twenty, when you lost fastest acceleration, highest top speed, lowest drag coefficient, most interior space, most luggage space, and then outcomes of the awards fastest changing fast, Well, we're going to talk about the new two hundred miles and twelve minutes, which nothing compares to that. But I'm looking at this run of awards from let's go down the Less Car and Driver, Motorsport Edmonds Wards, Automotive Car and Driver, World Car Awards, News Week, US News and Worlds Report, Bloomberg Car and Driver, motor It's Best Supercar, Best Luxury Car, Bust Electric Car ten, Best Engines and Propulsion Systems, Top ev Pick record for longest range ever tested car, The Year Car, The Year ev Year, the Year Like You guys have cleaned up as of April twenty twenty four. Like every award, you can suck up for this. So the first question is when the Air first came out, it was kind of what can we do if money is no restraint? But then you've certainly come out with subsequent models that are a little more affordable. Tell us about the plan for the next few vehicles that are coming out of Lucid.

Yeah, we were really thrilled because we won Motor Trend Car the Year for Air and it's the first time any company in the history of that award has ever won the award with its very first vehicle. No one's ever done that before, so this was this was a landmark.

Yeah, and.

It was important we started with a high end vehicle first to establish the brand. But when I launched Listeday in thick of COVID, and we did so on September ninth, twenty twenty, I promised the world that we would get to an entry level price of sixty nine thousand, nine hundred and I'm so pleased that earlier this year I met my promise that we brought the pure version of Air, which is an outstanding car.

Sixty's the range of that one.

Our range of that one is four hundred and nineteen miles.

Still to share.

And the reason we're able to do that is that we can achieve that with just an eighty eight kilwater our battery pack. No one else goes even close to that.

And that's the efficiency of the mot.

Yes, which means we can get four nineteen more than anyone else has gone with a smaller battery pack. For example, Models has got over one hundred kilowattas and because of that, because the battery pack costs so much to make, it saves us that money, and it's a company we can afford to put that product out there.

So let's talk about a couple more products that are on the drawing board. If we look around and we see Hyundai and Kiya, they have forty thousand Volkswagen forty if something the Model three in the forties before even We'll talk about the Chinese evs a little later, But it looks like if you can the average price of a new car in the US is now about forty eight thousand dollars, if you could get in the forties, it seems like it opens up a mass market. What are the plans. We'll talk about the SUV in a minute. What are the plans for, you know, a really affordable entry level EV.

You're describing our mid sized platform exactly that. It's schedule for production late twenty six, forty eight to fifty thousand dollars car state of the arts, and we'll be able to make that because we can go further with less batteries, and therefore we can afford to make such a compelling car at that price point like no one else can, embodying all our learning, all the technology that we've developed from air and that will transfer all our knowledge into mid sized platform, making evs progressively more affordable. That is our mission. We want to be a major player. Don't think of listed as a niche luxury player. I want to be selling a million of those cars a year in the early twenty thirties.

Give us your spec targets for that mid sized car, which I don't think you have a name for yet. We haven't what is the horsepower, what is the range, and what is the interior space going to be?

Well, we haven't disclosed that it will just be super competitive, but I can say this that I mean that will be a time when we overtly compete with Tesla Model Y Model three, that will be our Tesla Model three And why competitor?

You want to call that a Model three killer?

No, I never call an oh.

All right again, I'm putting words into your mouth. So what I would imagine room for both, What I would imagine would do really well in the market. Is a car that costs forty somethings one thousand dollars is the size of an E class Mercedes or smaller with a range four hundred Dare I say five hundred miles and four hundred to five hundred horsepower? Am I hallucinating or is that? Are those realistic?

I think we have to look at the need for range in the future. Paradoxically, I see the electric curls of the future having less range than today and less.

Need for it as a network gets built out, as.

You get a more mature charging infrastruture. I never get range anxiety in a gasoline car.

I might always a guest, I might.

Have a strange accent, but I have learned something during my days in the US. There's a gas stration on every street corner.

I'm not going to run out.

Unless I'm in Utah, and there's a next the next I don't have to worry about getting gas.

So while we.

See when we see a more mature charging infrastructure, and the other thing that's coming is fast charging cell chemistry.

So let's talk about that. So that's going to help the new technology that Gen one, not Gen two or three, but the next EV charging system that you're going to have available is two hundred miles of charge in twelve minutes. Yeah, we've got that that exists today. Yeah, so that's a that's a pretty big lift for you know, for a cup of coffee and a bathroom streak, you have two hundred miles. What's the next generation after that?

Well, first of all, and what I want to say is the way I will answer you a question, but this is a very important point. The way charging is measured really frustrates me because everyone is obsessed with measuring it and how fast the percentage of the battery charges ten to eighty percent. What doesn't matter totally. It doesn't matter what percentage the battery charges. If your range sucks, your charge rate will suck. So what's important is the power that's going in and killer what's multiplied by your efficiency in miles per killer what are and that will give you miles charged, Well, it will give you technically per hour, but it's miles per minute that matters. And we're on the same page. That is the first thing. That's the thing that counts. And we're able to get a granturing and get three hundred miles range charge in twenty one minutes. It's extraordinary, not We've got the fastest charging thing on the planet. Now, one of the issues with today's cells is that you trade you trade energy for power. So actually you could you could have faster charging power dense cells, but you'd lose range for that. So we always cold tend to go for more energy cells which have got a limit to the change rate.

So that I do both. Can you have a small number of fast charging cells.

That sort of the benefits cancel each other out. It's it's a it's a great idea, but it's you do the math and it doesn't help you. Actually, it actually makes things even more complex. One of the potential saviors here is the the growth of LFP. This is the new lithium.

The iron phosphate chemistry.

Now, iron phosphate has kind of sucked because it's lower energy and it's cheaper, so it's kind of like the cheaper nasty Poorman's cell.

And it's been really.

Developed a lot, particularly by the Chinese, and actually it's it's its energy capacity is growing quite healthily of late, and it's got the added an'tig it can take a lot of power charging. So I think there's a real argument for less lower range cars with lfpece cells and more mature infrastructure not to go so far extenseve. Yes, you take a mass hit, but with lucid efficiency, then with the mass hit becomes less because we're carrying less less solace. And then okay, you have to charge a bit more often, but it's really fast when you do change. So you're thinking then about like stopping for seven or eight minutes rather than fifteen minutes, and and so it's going to be more stop and go.

And that's what buyd and the Chinese Manufac.

There byd Goshen. There's there's several they're really taking a lead in this blade type LFP technology, and I think it has its place. I think for a performance premium car, cylindrical lithium ions mcs are the right solutions still and I think they will have their place alongside LFP.

So it sounds like you're fairly impressed with the technology in the EV space coming out of China. I believe was it last year BYD passed Tesla for the highest selling EV manufacturer.

I believe you're right.

So China is going to be a force out there. We're not currently allowing those cars into the United States. I don't know if that changes anytime soon. What do you think of the technology that you know that not just the battery technology but the whole automobile. Is China going to be a major player in the EV space?

Bigknie tariffs announced in Europe as well. So my take on China is this that their vehicle engineering has advanced to a shocking degree in a good way in the last three years. I can't believe how much better their cards are. Battery technology for LFP, they're in a leadership position. The powertrain technology is still several years behind Tesla, and Tesla's several years behind us, but don't underestimate them. I mean, if they can transform their vehicle, I want to talk about vehicle engineering, I mean fit and finish door slam with noise, ceiling materials, comfort.

In Let me interrupt you, traditional attribute, Let.

Me interrupt you. The thing that I have been so impressed with the Lucids i've seen is you not only come from an automotive background, whereas Tesla is a little more of a technology but it feels like a luxury car. The fit and finish is outstanding, the materials is excellent. Like, it's obvious you want to compete with Mercedes Tesla. But the thing I have to ask about is the US has shifted to a giant suv market. Tell us about gravity. When are we going to see the first suv with a four hundred or five hundred mile range from Lucid.

Yeah.

And first of all, with the luxury, we wanted to endow the car with a quiet luxury and understated luxury, but really high quality materials in a very understated sort of a California inspired design sensibility, and that's often misinterpreted and it's not true luxury. Well it's not ostentatious luxury. Now, it's understated, quiet luxury. So moving on to gravity. You ask, so Gravity is scheduled for starter production late this year.

Oh?

Really, yes, absolutely.

It's going to be a seminal product. It's going to be the best suv on the planet. Nothing less will suffice.

Well, when will consumers first be able to purchase these.

We haven't announced precise purchase start of purchase which scheduled for starter production late this year. Realistically, the ramp up in production will take place during the early part of next year, so watch this space for an announcement in terms of availability.

And are we aiming about a comparable price to the.

Air Yeah, I see a starting point of just under eighty thousand dollars for a variant of gravity.

Absolutely, that's essential.

And I know I only have you for about five minutes. I have to ask one question that we didn't get to. You're the CEO of a public company. I know that comes with all sorts of obligations and dare I say headaches? How do you feel about being public? How is your capital setup? Are you comfortable that you could go the distance to the twenty thirties? What are your thoughts about being a public company and having access to the capital markets.

Well, I take more responsibilities very seriously. It is a way to my shoulders, but it's one that I can carry. I'm comfortable with what we're doing. I think we we can conduct ourselves in an incredibly ethical manner. I'm very committed to this company, and I'm all in. I've never sold a single share in the company ever.

And I've had a giant run up when it came yes.

Actually, and actually that that triggered some of my performance stock options, which are based my stock options performance package was based entirely upon share price, and so all that remuneration was due to performance related stock options, which I triggered. I've not I've not sold a single share other than the ones that I just had to for tax purposes.

And so I'm all in.

On this company. I am resolutely optimistic. I think we've got the best car in the world at the moment.

In the Lucid Air.

We're out selling Porsche, Tychan and Mercedes. Here in the US, we're out selling bw I seven, We're out selling the Etron e GT. And this this is a company that many people still haven't even heard of.

Lisid any plans for a two door coop a sports car.

I'd love to do it, but we've got laser commitment. We have to focus on the big ones. Gravity, So we got air now Gravity is coming, and then the really big one, the mid size platform, the more affordable forty eight fifty thousand dollars car. We've got a laser focus upon that and something else, a technology roadmap, which excites me the most because no one else is staying still. This is a technological race, and we have to keep running because if you don't run, others will catch you up. And the best defense we have is to keep our tech roadmap intact. And that's what excites me the most.

So last question before I let you get on with the rest of your New York tour, take me to the early twenty thirties. Where do you want to be in units you're selling? How many different models do you want to sell? What does Lucid look like seven years from now in twenty thirty one.

I believe we can be a healthy company. I think that what is not recognized is that our technological advantage today, which is seen as a burden, it will become a cost down enabler and therefore we will operate be able to operate at a better gross margin. Because of that, our very technology will be a gross margin enhancer, which will give us a profitability edge. And by the early twenty thirties. I'd like us to be seen selling no less than a million cars a year, because that's what it takes to have a meaningful impact upon the environment. But I also want this multiplier effect with our tech licensing business because what the world needs is the twenty five to thirty thousand dollars corp. And I don't think that's the business we Lucid as a company and our shareholders deserve, because it's all about volume, low margins. But I think others could manufacture that having access to our will leading technology, and with that multiplier effect, we truly can have an impact upon the environment and therefore the future mankind.

Fascinating stuff. Thanks Peter for being so generous with your time. We have been speaking with Peter Rawlinson, Lucid CEO and CTO. If you enjoy this conversation, well, be sure and check out any of our previous five hundred discussions over the past ten years. You can find those at iTunes, Spotify, YouTube, wherever you find your favorite podcasts. Check out my new podcast, at the Money, Conversations with experts about the most important issues affecting your money, earning it, spending it, and most importantly investing it at the money wherever you find your favorite podcasts, and here in the Masters in Business feed. I would be remiss if I did not thank a crack staff who helps us put these conversations together each week. John Wasserman is my audio engineer. Attika of Albron is my project manager. Jean Russo is my researcher. Anna Luke is my producer. Special thanks to Sarah Livesey for help putting this together this week. I'm Barry Ritolts. You've been listening to Masters in Business on Bloomberg Radio

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