UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM SD
Specialized Disclosure Report
Lucid Group, Inc.
(Exact name of registrant as specified in its
charter)
Delaware |
001-39408 |
85-0891392 |
(State or other jurisdiction of
incorporation or organization) |
(Commission File
Number) |
(I.R.S. Employer Identification No.) |
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7373 Gateway Boulevard
Newark,
CA |
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94560 |
(Address of Principal Executive Offices) |
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(Zip Code) |
Olga
Aulet-Leon
Director, ESG and Sustainability
510-648-3553
(Name and telephone number, including area code, of the person to contact in connection with this report.)
Check the appropriate box to indicate the rule pursuant to which
this form is being filed, and provide the period to which the information in this form applies:
x Rule 13p-1
under the Securities Exchange Act (17 CFR 240.13p-1) for the reporting period from January 1 to December 31, 2023.
¨ Rule 13q-1 under the Securities Exchange
Act (17 CFR 240.13q-1) for the fiscal year ended .
Items 1.01 and 1.02 – Conflict Minerals Disclosure and Report;
Exhibit
A copy of Lucid Group, Inc.’s Conflict Minerals Report for
the year ended December 31, 2023 is provided as Exhibit 1.01 hereto and is publicly available online at https://lucidmotors.com/legal.
Item 3.01 – Exhibits
Exhibit 1.01 – Conflict Minerals Report as required by Items 1.01 and 1.02 of this Form.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the duly authorized undersigned.
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LUCID GROUP, INC. |
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By: |
/s/ Kevin Callanan |
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Name: |
Kevin Callanan |
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Title: |
Vice President, Supply Chain |
Date: May 23, 2024
Exhibit 1.01
Lucid Group, Inc. Conflict Minerals Report
For The Year Ended December 31, 2023
This Conflict Minerals Report for the year ended
December 31, 2023 (the “CMR”) is prepared to comply with Rule 13p-1 (the “Rule”) under the Securities
Exchange Act of 1934, as amended, which requires certain reporting and disclosure related to conflict minerals with the Securities and
Exchange Commission (the “SEC”). The SEC currently defines “conflict minerals” to mean cassiterite, columbite-tantalite
(coltan), wolframite, gold, or their derivatives, which are limited to tin, tantalum, tungsten, and gold (“3TG”). These requirements
apply to registrants whatever the geographic origin of their conflict minerals and whether or not their conflict minerals fund armed conflict.
Please refer to the Rule, Form SD, and SEC Release No. 34-67716 for definitions of the terms used in this CMR, unless otherwise
defined herein. Statements in this CMR are based on our due diligence activities performed in good faith for the calendar year 2023 and
are based on information available as of the time of this filing, unless otherwise indicated. Factors that could affect the accuracy of
these statements include, but are not limited to, incomplete supplier data or available smelter and/or refiner (collectively referred
to as “smelter(s)”) data, errors or omissions by suppliers or smelters, ongoing certifications of smelters, continued guidance
or amendments to the Rule, and other issues. Additionally, this CMR may contain forward-looking statements that reflect what we strive
to achieve in the future as we continue to improve our responsible sourcing program. These forward-looking statements are based on current
expectations and assumptions that are subject to risks and uncertainties that could cause actual results to differ materially from those
stated. In addition, references to documents, third-party materials, our websites and information available through these websites are
not incorporated into this CMR. Throughout this CMR, we use “Lucid,” “we,” “our,” “us”
and similar terms to refer to Lucid Group, Inc. and its subsidiaries (collectively, “Lucid” or the “Company”),
unless otherwise indicated.
Company Overview
Lucid is a technology company that is setting
new standards with its advanced luxury electric vehicle (“EV”), beginning with the Lucid Air, the most efficient (as measured by miles of range per kilowatt-hour),
the longest-range, and the fastest-charging fully electric car in its class available in the U.S. market today. Lucid (i) designs, engineers and
manufactures EVs, EV powertrains and battery systems in-house using our own equipment and factories, (ii) designs and develops proprietary
software in-house for Lucid vehicles that can be continuously improved upon through over-the-air (“OTA”) software updates,
(iii) offers a refined customer experience at our own geographically distributed retail and service locations and through direct-to-consumer
online and retail sales, (iv) plans to supply and license technology to third parties, and (v) boasts a strong product roadmap
of future vehicle programs and technologies. Our focus on in-house hardware and software innovation, vertical integration, and a “clean-sheet”
approach to engineering and design led to the development of the award-winning Lucid Air.
Lucid recognizes that to support our mission we
have a responsibility to support and manage the human rights and environmental impacts of our supply chain, including the extraction,
harvesting, processing, refining and transportation of raw materials that may become part of our products. To support this commitment,
we have established a Responsible Sourcing Policy and Supplier Code of Conduct which communicate our expectations to our suppliers.
We have described below our efforts to understand
the origins of the 3TG sourced in our products and our efforts to assess the source and chain of custody of any 3TG that may have originated
in the Covered Countries.
In-Scope Products
Based on our analysis, we have determined that
3TG are necessary to the functionality or production of the Lucid Air and in select accessories over which we had significant influence
on the design and/or manufacture (the “In-Scope Products”). We proceeded to conduct a reasonable country of origin inquiry
(“RCOI”) and due diligence to assess the sourcing of the 3TG in the In-Scope Products.
Reasonable Country of Origin Inquiry (“RCOI”)
Since we do not buy raw 3TG and are typically
multiple tiers away from the smelters and refiners in our supply chain, we are reliant upon our direct suppliers to support our due diligence
and request the sourcing information from their supply chain for the 3TG minerals in the products they provide to Lucid. Due to the complexity
of the supply chain, the majority of our in-scope suppliers are responding at a company-level and not providing information specific to
the products they provide to Lucid. Some suppliers are also providing incomplete information due to not receiving all the information
from their own suppliers. As a result, the RCOI determination may be over-conclusive or incomplete. Outlined below are the steps we took
to perform the RCOI and to determine what further due diligence is needed.
RCOI Approach
To determine which suppliers should be included
in the scope of the RCOI, we performed a risk assessment of all parts or components to our Lucid Air and select accessories based on 3TG
content as reported through the International Material Data System (the “IMDS”). All related suppliers for the 3TG parts and
components identified through IMDS were included in the RCOI. We also included any additional suppliers who had not yet completed their
IMDS submission in our RCOI.
We requested our in-scope suppliers to complete
the Responsible Minerals Initiative’s (“RMI”) Conflict Minerals Reporting Template (“CMRT”) to report on
their due diligence efforts, including the smelters, refiners, and countries of origin in their supply chain. We engaged a third party
to support managing our RCOI, including performing a quality review based on standards we communicated to them. Our quality review standards
included indicators of where the supplier may have completed the CMRT incorrectly, did not report smelters and refiners, indicated conflicting
responses with their IMDS submission, or had other indicators of insufficient due diligence in their response.
| · | As of March 7, 2024, we received responses from 91% of the in-scope suppliers surveyed. Since our
suppliers are often unable to report specific countries of origin, we leverage the RMI’s RCOI database which provides aggregated
data of countries of origin for smelters and refiners considered to be conformant by the RMI’s Responsible Minerals Assurance Program
(“RMAP”), Responsible Jewellery Council (“RJC”) or London Bullion Market Association (“LBMA”). Based
on our analysis of our supplier’s CMRTs and RMI’s RCOI database (as of January 26, 2024), a portion of our suppliers
indicated that at least some of their 3TG is coming from the Covered Countries or reported smelters/refiners linked to the Covered Countries,
based on the RMI’s RCOI database. |
As a result of our reasonable country of origin
inquiry, we proceeded to conduct due diligence on the source and chain of custody of the 3TG minerals in our products.
Design of Due Diligence
We have designed our due diligence measures to
conform, in all material respects, with the framework in the Organisation for Economic Co-operation and Development Due Diligence Guidance
for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas, Third Edition, 2016 (“OECD Guidance”) and the related
supplements for 3TG.
Due Diligence Measures Performed
Step 1. Establish Strong Company Management System
Lucid has taken the following steps to establish
a company management system:
| · | Established a Responsible Sourcing Policy to support our commitment to responsibly source raw materials,
including tin, tungsten, tantalum and gold. This policy outlines our expectations for our suppliers to perform due diligence and to strive
to source from available smelters and refiners which have undergone an independent third party audit program, such as the standards set
by the Responsible Minerals Initiative, London Bullion Market Association and Responsible Jewellery Council. We have published our policy
on the legal section of our website (https://lucidmotors.com/s3fs-public/pdf/responsible-sourcing-policy.pdf). |
| · | Integrated our responsible sourcing and compliance expectations into the general terms & conditions
of our supplier contracts and in our Supplier Code of Conduct. |
| · | Integrated human rights risks into our new supplier due diligence process to monitor for potential human
rights concerns and to identify potential mitigating actions that may be needed. |
| · | Established a cross-functional working group to manage the implementation of our conflict minerals compliance
requirements with our suppliers. This team consists of representatives from our Environment, Social & Governance (“ESG”),
Supply Chain, Legal and Compliance teams. The group meets regularly to monitor the progress of our due diligence efforts. Our Human Rights
Working Group and ESG co-chairs are responsible for monitoring our ESG initiatives. They receive regular updates on our compliance strategy
and progress as well as results of our due diligence and mitigation efforts. |
| · | Provided training to our internal supplier managers to educate them on the objectives of the regulation
and our approach. |
| · | Engaged a third party to facilitate the gathering of CMRTs from our in-scope suppliers, perform quality
reviews and provide training and reference materials to our suppliers to help them understand the regulation and how to complete the requested
annual declaration. |
| · | Implemented a supply chain traceability process. We implemented a materials database that leverages IMDS
to help identify which parts for our In-Scope Products may contain the minerals. We adopted the RMI’s CMRT to gather countries of
origin, smelters and refiners and a description of the due diligence efforts from our suppliers. As members of the Responsible Minerals
Initiative, we utilize their aggregated list of country-of-origin information provided for smelters and refiners confirmed as conformant
with the Responsible Minerals Assurance Program to identify potential countries of origin of the minerals in our supply chain. |
| · | Established performance indicators to assess our conflict minerals compliance progress, maturity of our
suppliers to support our transparency and responsible sourcing requirements and any potential high-risk sourcing. |
| · | Established a Speak Up! Integrity Helpline to encourage reporting. This platform
allows employees, suppliers and other third parties to raise conflict mineral and other workplace concerns through multiple avenues including
online, via phone or text, or to any member of the HR, Legal or ESG teams. These concerns may be raised anonymously. |
Step 2. Identify and Assess Risk in the Supply
Chain
We requested CMRTs from all in-scope suppliers
as described in the RCOI Approach section above. We engaged a third party to support gathering the CMRTs from suppliers, performing the
initial quality reviews, and working with the suppliers to address any quality issues identified. Each CMRT was reviewed to assess:
| · | Whether all the required disclosure elements in the CMRT were completed |
| · | Whether suppliers had received at least a 75% response rate from their own suppliers |
| · | Whether the supplier’s responses reconciled with the 3TG information they disclosed in IMDS |
| · | Whether the suppliers had disclosed smelters and refiners for the conflict minerals in their products |
| · | Whether the suppliers had a Responsible Sourcing Policy |
We reviewed the smelters and refiners disclosed
by our suppliers to assess the risk of sourcing that may not be in conformance with our Responsible Sourcing Policy, OECD Guidance and
the broader objectives of the regulation to avoid indirect or direct funding of armed groups in the Democratic Republic of Congo. Each
smelter and refiner was checked against the Responsible Minerals Initiative’s Facility Database to determine if it was a valid smelter
or refiner and if it had an active, passing audit following either the RMAP, RJC, or LBMA protocols, or if not, whether they were actively
engaged in the process of obtaining an audit. In addition, we also reviewed any additional reports available for raw materials, including
any publicly available NGO reports, government-provided information or other media to help us identify potential risks in our supply chain.
Step 3. Design and Implement a Strategy to Respond
to Identified Risk
We established performance metrics to monitor
the progress of our efforts with our supply chain. We report on the results of our RCOI and due diligence efforts regularly to our Conflict
Minerals Working Group and Human Rights co-sponsors. To support our due diligence, we engaged a third party to create corrective action
plans for each supplier to address any high-risk sourcing identified in their respective CMRTs, including encouraging our suppliers to
utilize conformant smelters and refiners, consistent with the expectations in our Responsible Sourcing Policy. Since this is the first
year of our conflict minerals RCOI and due diligence, we are still in process of working with our suppliers to respond to our RCOI and
to improve the quality of their responses to understand what sourcing issues may be linked to Lucid products.
To further support addressing supply chain risks
upstream, we joined cross-industry forums such as the RMI and Responsible Business Alliance (“RBA”). We have begun to integrate
the tools provided by the RMI to enhance our due diligence of risks upstream.
Step 4. Carry Out Independent Third-Party Audit
of Smelter and Refiner Due Diligence Practices
Since we do not have direct business relationships
with the smelters and refiners in our supply chain, we rely upon the RMI’s Responsible Minerals Assurance Program (“RMAP”) and the
RMAP Cross-Recognition Program to determine which smelters and refiners disclosed by our suppliers are actively engaged in or conformant
with the RMAP, LBMA and RJC independent third party-audit protocols of their due diligence practices. We utilize the RMI’s facility
database and RCOI information to help us monitor and manage our supply chain risks. We have also outlined in our Responsible Sourcing
Policy that our suppliers should strive to use conformant smelters where available.
Step 5. Report Annually on Supply Chain Due Diligence
We have published our first Conflict Minerals
Report on our supply chain due diligence for 2023. Our Lucid Conflict Minerals Report is available on the Legal page of our website
at https://lucidmotors.com/legal#conflict-minerals.
Facilities Used to Process the Conflict Minerals
in Products, if Known
Lucid is dependent on the cooperation of our direct
suppliers to help us identify the smelters and refiners in our supply chain. While we requested our suppliers to provide information specific
to the parts and components provided to Lucid, most responses submitted are still at a company-level and not specific to our supply chain.
For those suppliers who disclosed a product-specific CMRT to Lucid, some of the upstream supplier information may have been disclosed
at a company and not-product level as well – making it further difficult for Lucid to validate the specific facilities related to
Lucid’s supply chain. In addition, many suppliers are disclosing that they have not yet completed their own due diligence and are
unable to disclose a complete list of smelters and refiners. The information below represents the data we have gathered from our in-scope
suppliers as of March 7, 2024. Due to the challenges noted above, the list is likely to be both incomplete and over-inclusive of
facilities in Lucid’s supply chain.
Smelter/Refiner Conformant Status
Our suppliers disclosed 375 legitimate, actively
operating smelters and refiners, based on the RMI’s Facility Database as of February 23, 2024. We are in the process of submitting
the remainder of the alleged smelter and refiner facilities to the RMI to validate whether they are legitimate smelter and refiners.
Based on the information disclosed by our suppliers and information
available in the RMI’s Facility Database, we identified 36 smelters and refiners to have sourced or are sourcing from a Covered
Country; all of these were audited and are considered conformant to one of the recognized audit protocols described earlier. Overall,
72% of all smelters and refiners disclosed by our suppliers are considered conformant. We recognize that this list may fluctuate throughout
the year due to changes in sourcing by our supply chain or due to changes in the conformant status maintained by the smelters and refiners.
| |
Tin | | |
Tungsten | | |
Tantalum | | |
Gold | |
Conformant* or Active** | |
| 75 | | |
| 38 | | |
| 42 | | |
| 116 | |
Not Participating | |
| 19 | | |
| 16 | | |
| 4 | | |
| 65 | |
Total | |
| 94 | | |
| 54 | | |
| 46 | | |
| 181 | |
Percentage aligned with Lucid’s Responsible Sourcing Policy | |
| 80 | % | |
| 70 | % | |
| 91 | % | |
| 64 | % |
*Conformant
facilities are those that have successfully completed an assessment against either the applicable RMI, LBMA or RJC standard.
These assessments are backward-looking and focus on evaluating facilities’ due diligence systems and processes to conform with the standards. They
are not material validation assessments.
**Active
facilities are those that have committed to undergo an RMAP assessment, completed the relevant documents, and scheduled the on-site assessment.
These may be in the pre-assessment, assessment, or corrective-action phases of the assessment.
Countries of Origin of the Conflict Minerals
in Products, if Known
Similar to identifying which smelters and refiners
are in our supply chain, we are dependent upon our in-scope suppliers to help provide transparency into our supply chain to identify from
which countries the 3TG may be sourced. Our upstream suppliers also have difficulty in determining which countries of origin that specific
smelters and refiners may be sourcing from. Given these limitations, we leverage the RMI’s RCOI database to understand the countries
of origin that have been identified for all conformant smelters in aggregate. Since the RMI’s RCOI database also does not provide
a linkage between a specific conformant smelter and a country of origin, the list of countries provided may or may not be part of Lucid’s
supply chain. We recognize that this list may also fluctuate throughout the year as well as year over year. We have provided a list of
countries of origin in Annex I.
Efforts to Determine the Mine or Location of
Origin with the Greatest Possible Specificity
Due to the complexities of the supply chain and
the limitations in the data provided by suppliers and RMI, it is difficult for us to determine the origins or mines with exact specificity.
We rely upon the CMRTs provided by our in-scope suppliers and the RMI’s RCOI database to identify the smelters, refiners and countries
of origin that may be linked to our products. If a potential high-risk sourcing issue is identified through our analysis of this information
or through our other due diligence mechanisms, we conduct further follow up with the supplier to attempt to gather more specific origin
information and to confirm whether the sourcing is linked to Lucid’s products specifically.
Steps We Have Taken to Mitigate OECD Annex
II, Environmental Social Risks in Our Mineral Supply Chain; Including Steps To Improve Our Due Diligence
We recognize that there are a number of steps
we can take to continue to improve our due diligence and mitigate the risks of sourcing from high-risk regions, including continuing to
contractually require our suppliers to comply with the expectations in our Supplier Code of Conduct and to meet all due diligence requests;
following up with suppliers to assess chain of custody to Lucid products for any potentially high-risk smelters or refiners identified;
and continuing to engage in cross-industry forums, including the Responsible Minerals Initiative and Responsible Business Alliance.
Annex I – Countries of Origin
The information below represents information from the RMI’s RCOI
report as of January 26, 2024, for the smelters and refiners disclosed by our in-scope suppliers. The RMI provides an aggregated
list of countries for conformant smelters only. The RMI does not provide a specific country of origin for each conformant smelter due
to business confidentiality reasons. Therefore, we are unable to determine with any certainty the specific countries of origin the material
may have come from.
Andorra |
Italy |
Saudi Arabia |
Australia |
Japan |
Singapore |
Austria |
Kazakhstan |
South Africa |
Belgium |
Korea, Republic of |
Spain |
Bolivia (Plurinational State of) |
Kyrgyzstan |
Sudan |
Brazil |
Lithuania |
Sweden |
Canada |
Malaysia |
Switzerland |
Chile |
Mexico |
Taiwan, Province of China |
China |
Myanmar |
Tanzania |
Colombia |
Netherlands |
Thailand |
Congo, Democratic Republic of the |
New Zealand |
Turkey |
Czechia |
Norway |
Uganda |
Estonia |
Peru |
United Arab Emirates |
France |
Philippines |
United Kingdom of Great Britain and Northern Ireland |
Germany |
Poland |
United States of America |
Ghana |
Portugal |
Uzbekistan |
India |
Russian Federation |
Viet Nam |
Indonesia |
Rwanda |
Zimbabwe |
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