Lucid Group, Inc.LCID
Lucid Group, Inc. Fair Value Disclosure
FAIR VALUE MEASUREMENTS AND FINANCIAL INSTRUMENTS
The accounting standard for fair value measurements provides a framework for measuring fair value and requires expanded disclosures regarding fair value measurements. Fair value is defined as the price that would be received for an asset or the “exit price” that would be paid to transfer a liability in the principal or most advantageous market in an orderly transaction between independent market participants on the measurement date. The Company measures certain financial assets and liabilities at fair value at each reporting period using a fair value hierarchy, which requires the Company to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. A financial instrument classification within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. This hierarchy prioritizes the inputs into three broad levels as follows:
•Level 1—Quoted prices (unadjusted) in active markets for identical assets or liabilities.
•Level 2—Observable inputs other than quoted prices in active markets for identical assets and liabilities, quoted prices for identical or similar assets or liabilities in inactive markets, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.
•Level 3—Inputs that are generally unobservable and typically reflect management’s estimates of assumptions that market participants would use in pricing the asset or liability. Factors used to develop the estimated fair value are unobservable inputs that are not supported by market activity. The sensitivity of the fair value measurement to changes in unobservable inputs may result in a significantly higher or lower measurement.
Cash, cash equivalents and investments are reported at their respective fair values on the Company’s consolidated balance sheets. The Company’s short-term and long-term investments are classified as available-for-sale securities. Carrying amounts of accounts receivable, accounts payable, and other current liabilities approximate their estimated fair values.
The following table sets forth the Company’s financial assets subject to fair value measurements on a recurring basis by level within the fair value hierarchy as of December 31, 2025 and 2024 (in thousands):
| December 31, 2025 | |||||||||||||||||||||||||||||||||||||||||
| Reported As: | |||||||||||||||||||||||||||||||||||||||||
| Amortized cost | Gross Unrealized Gains | Gross Unrealized Losses | Estimated Fair Value | Cash and cash equivalents | Short-Term Investments | Long-Term Investments | |||||||||||||||||||||||||||||||||||
| Cash | $ | 762,077 | $ | — | $ | — | $ | 762,077 | $ | 762,077 | $ | — | $ | — | |||||||||||||||||||||||||||
| Level 1: | |||||||||||||||||||||||||||||||||||||||||
| Money market funds | 235,750 | — | — | 235,750 | 235,750 | — | — | ||||||||||||||||||||||||||||||||||
| U.S. Treasury securities | 575,159 | 3,655 | — | 578,814 | — | 398,011 | 180,803 | ||||||||||||||||||||||||||||||||||
| Subtotal | 810,909 | 3,655 | — | 814,564 | 235,750 | 398,011 | 180,803 | ||||||||||||||||||||||||||||||||||
| Level 2: | |||||||||||||||||||||||||||||||||||||||||
Time deposits(1) | 65,000 | — | — | 65,000 | — | 65,000 | — | ||||||||||||||||||||||||||||||||||
| Corporate debt securities | 471,819 | 3,442 | — | 475,261 | — | 168,082 | 307,179 | ||||||||||||||||||||||||||||||||||
| Subtotal | 536,819 | 3,442 | — | 540,261 | — | 233,082 | 307,179 | ||||||||||||||||||||||||||||||||||
Total | $ | 2,109,805 | $ | 7,097 | $ | — | $ | 2,116,902 | $ | 997,827 | $ | 631,093 | $ | 487,982 | |||||||||||||||||||||||||||
(1) Included $50.0 million of time deposits with GIB in short-term investments. GIB is a related party of the PIF, which is an affiliate of Ayar. See Note 16 “Related Party Transactions” for more information.
| December 31, 2024 | |||||||||||||||||||||||||||||||||||||||||
| Reported As: | |||||||||||||||||||||||||||||||||||||||||
| Amortized cost | Gross Unrealized Gains | Gross Unrealized Losses | Estimated Fair Value | Cash and cash equivalents | Short-Term Investments | Long-Term Investments | |||||||||||||||||||||||||||||||||||
| Cash | $ | 610,201 | $ | — | $ | — | $ | 610,201 | $ | 610,201 | $ | — | $ | — | |||||||||||||||||||||||||||
| Level 1: | |||||||||||||||||||||||||||||||||||||||||
| Money market funds | 677,712 | — | — | 677,712 | 677,712 | — | — | ||||||||||||||||||||||||||||||||||
| U.S. Treasury securities | 2,310,538 | 2,820 | (531) | 2,312,827 | 173,341 | 1,605,369 | 534,117 | ||||||||||||||||||||||||||||||||||
| Subtotal | 2,988,250 | 2,820 | (531) | 2,990,539 | 851,053 | 1,605,369 | 534,117 | ||||||||||||||||||||||||||||||||||
| Level 2: | |||||||||||||||||||||||||||||||||||||||||
| Certificates of deposit | 3,998 | 1 | — | 3,999 | — | 3,999 | — | ||||||||||||||||||||||||||||||||||
Time deposits(1) | 515,000 | — | — | 515,000 | 60,000 | 435,000 | 20,000 | ||||||||||||||||||||||||||||||||||
| Commercial paper | 141,525 | 25 | (4) | 141,546 | 75,442 | 66,104 | — | ||||||||||||||||||||||||||||||||||
| Corporate debt securities | 781,178 | 1,281 | (553) | 781,906 | 10,169 | 313,631 | 458,106 | ||||||||||||||||||||||||||||||||||
| Subtotal | 1,441,701 | 1,307 | (557) | 1,442,451 | 145,611 | 818,734 | 478,106 | ||||||||||||||||||||||||||||||||||
| Total | $ | 5,040,152 | $ | 4,127 | $ | (1,088) | $ | 5,043,191 | $ | 1,606,865 | $ | 2,424,103 | $ | 1,012,223 | |||||||||||||||||||||||||||
(1) Included $15.0 million and $20.0 million of time deposits with GIB in short-term investments and long-term investments, respectively. See Note 16 “Related Party Transactions” for more information.
During the years ended December 31, 2025, 2024, and 2023, there were immaterial gross realized gains or losses on the sale of available-for-sale securities. Accrued interest receivable excluded from both the fair value and amortized cost basis of the available-for-sale securities was $13.1 million and $19.6 million as of December 31, 2025 and 2024, respectively, and was recorded in on its consolidated balance sheets. As of December 31, 2025 and 2024, no allowance for credit losses was recorded related to an impairment of available-for-sale securities.
The following table summarizes our available-for-sale securities by contractual maturity:
| December 31, 2025 | |||||||||||
| Amortized cost | Estimated Fair Value | ||||||||||
| Within one year | $ | 628,930 | $ | 631,093 | |||||||
| After one year through three years | 483,048 | 487,982 | |||||||||
| Total | $ | 1,111,978 | $ | 1,119,075 | |||||||
On November 6, 2023, the Company received 28,352,273 ordinary shares of Aston Martin with an initial fair value of $73.2 million. The Company remeasured the shares and recorded fair values of $24.3 million and $37.8 million within long-term investments in the consolidated balance sheets as of December 31, 2025 and 2024, respectively. These equity securities are publicly traded stocks (where shares are denominated in GBP) measured at fair value on a recurring basis and classified within level 1 in the fair value hierarchy. During the years ended December 31, 2025, 2024, and 2023, the Company recognized unrealized losses of $15.8 million and $43.1 million, and an unrealized gain of $6.0 million, respectively, in change of fair value of equity securities of a related party in the consolidated statement of operations and comprehensive loss. During the years ended December 31, 2025, 2024, and 2023, the Company also recognized $2.3 million of unrealized foreign currency gain, $0.6 million of unrealized foreign currency loss, and $2.3 million of unrealized foreign currency gain related to these equity securities, respectively, in other expense, net in the consolidated statement of operations and comprehensive loss. See Note 16 “Related Party Transactions” for more information.
Level 3 liabilities consist of the common stock warrant liability and the derivative liabilities associated with the Redeemable Convertible Preferred Stock, of which the fair values were measured upon issuance of the Private Placement Warrants and the Redeemable Convertible Preferred Stock and are remeasured at each reporting period. The valuation methodology and underlying assumptions are discussed further in Note 7 “Common Stock Warrant Liability” and Note 8 “Redeemable Convertible Preferred Stock”, respectively. Level 3 liabilities also consist of residual value guarantee liabilities, of which the fair value is measured initially upon delivery of vehicles and assessed subsequently for any changes on a quarterly basis. Significant changes in the unobservable inputs used in determining the fair value would result in significant changes to the fair value measurement.
The following table presents a reconciliation of the common stock warrant liability measured and recorded at fair value on a recurring basis (in thousands):
| Year Ended December 31, | ||||||||||||||
| 2025 | 2024 | |||||||||||||
| Fair value-beginning of period | $ | 19,514 | $ | 53,664 | ||||||||||
| Change in fair value | (19,514) | (34,150) | ||||||||||||
| Fair value-end of period | $ | — | $ | 19,514 | ||||||||||
The following table presents a reconciliation of the derivative liabilities associated with the Redeemable Convertible Preferred Stock measured and recorded at fair value on a recurring basis (in thousands):
| Year Ended December 31, 2025 | Year Ended December 31, 2024 | ||||||||||||||||||||||
Series A Derivative Liability | Series B Derivative Liability | Series A Derivative Liability | Series B Derivative Liability | ||||||||||||||||||||
| Fair value-beginning of period | $ | 408,800 | $ | 230,625 | $ | — | $ | — | |||||||||||||||
Issuance | — | — | 497,100 | 297,675 | |||||||||||||||||||
| Change in fair value | (398,000) | (225,225) | (88,300) | (67,050) | |||||||||||||||||||
| Fair value-end of period | $ | 10,800 | $ | 5,400 | $ | 408,800 | $ | 230,625 | |||||||||||||||
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 24, 2026 | Showing above |
| 2024 | Feb 25, 2025 | |
| 2023 | Feb 27, 2024 | |
| 2022 | Feb 28, 2023 | |
| 2021 | Feb 28, 2022 | |
| 2020 | Mar 16, 2021 | |
About Fair Value Disclosures
Fair value disclosures classify all assets and liabilities measured at fair value into a three-level hierarchy: Level 1 (quoted market prices), Level 2 (observable inputs like yield curves), and Level 3 (unobservable inputs requiring management estimates). The proportion of Level 3 assets directly reflects how much of the balance sheet depends on internal models rather than market evidence.
Key signals: a growing Level 3 balance relative to total fair-value assets increases valuation uncertainty and earnings volatility risk. Watch for transfers between levels — assets moving from Level 2 to Level 3 often signal deteriorating market liquidity. Unrealized gains and losses on Level 3 positions flow through earnings or other comprehensive income, so large swings deserve scrutiny. For financial institutions, examine the sensitivity disclosures that show how Level 3 valuations change under alternative assumptions. Compare the fair value of debt against its carrying amount to gauge hidden leverage.