COMMON STOCK WARRANT LIABILITY

6 Months Ended

Jun. 30, 2025

On July 23, 2021, in connection with the merger, the Company effectively issued 44,350,000 Private Placement Warrants to purchase shares of Lucid’s common stock at an exercise price of $11.50. The Private Placement Warrants were initially recognized as a liability with a fair value of $812.0 million and were remeasured to a fair value of $19.5 million as of December 31, 2024. The Private Placement Warrants remained unexercised and were remeasured to a fair value of $1.3 million as of June 30, 2025. The Company recognized gains of $5.3 million and $18.2 million for the three and six months ended June 30, 2025, respectively, and gains of $7.5 million and $34.6 million for the same periods in the prior year, respectively, in the condensed consolidated statements of operations and comprehensive loss.

The fair value of the Private Placement Warrants that are not subject to the contingent forfeiture provisions was estimated using a Black-Scholes option pricing model, and was as follows:


	June 30, 2025		December 31, 2024
Fair value of Private Placement Warrants per share	$	0.03	$	0.44

Assumptions used in the Black-Scholes option pricing model take into account the contract terms as well as the quoted price of the Company’s common stock in an active market. The volatility is based on the Company’s historical volatility. The expected life is based on the remaining contractual term of the warrants, and the risk-free interest rate is based on the implied yield available on U.S. Treasury securities with a maturity equivalent to the warrants’ expected life. The level 3 fair value inputs used in the Black-Scholes option pricing models were as follows:


	June 30, 2025		December 31, 2024
Volatility	80.0	%	95.0	%
Expected term (in years)	1.1		1.6
Risk-free rate	3.9	%	4.2	%
Dividend yield	—	%	—	%