Lucid Motors reached an agreement to become a listed company through a merger with the special acquisition company Churchill Capital IV Corp, in the largest deal to date between a blank check company and the start-up of electric vehicles.
The combined company, in which Saudi Arabia’s sovereign wealth fund continues to be the largest shareholder, will have a transaction value of $ 11.75 billion. Private investment in the public capital agreement costs $ 15 per share, which means that the implicit value of pro forma is $ 24 billion. The announcement comes more than a week after Bloomberg, citing unnamed sources, reported a deal was close to completion.
Lucid follows a number of other, albeit less valued, SPAC mergers with starting electric cars that have been announced this year, including Arrival, Canoo, Fisherman and Lordstown Motors. Several EV infrastructure companies including EVgo and ChargePoint also have become public companies via SPAC mergers.
Lucid may have been the most anticipated. Hype and speculation that has been rampant for several weeks propelled Churchill Capital IV Corp’s stock price from its $ 10 opening price per share more than 470% since January 2021. The soaring stock price fell more than 30% after the details of the deal were announced.
Churchill’s private investment and cash will provide approximately $ 4.4 billion in total funding to Lucid. That capital will work to accelerate and expand Lucid’s plans. The company plans to begin production and deliveries of Lucid Air in North America during the second half of this year. The air will arrive in Europe in 2022, followed by China in 2023. The Gravity performance luxury SUV is expected to hit the market in North America in 2023. The vehicles will be produced in their new factory and Casa Grande, Arizona.
The financing will be used to bring the two vehicles to market as well as to expand their factory in Arizona, Said Lucid CEO and CTO Peter Rawlinson on Monday. The company plans to expand the factory over three more phases in the next few years to have the capacity to produce 365,000 units per year on a large scale. The initial phase of the $ 700 million plant was completed late last year and will have the capacity to produce 30,000 vehicles per year.
The deal will also help Lucid realize its vision of delivering electric vehicle technology to third parties, such as other car manufacturers, as well as offering energy storage solutions in residential, commercial and public utility segments, says Rawlinson.
Scaling an electric vehicle company is not cheap or easy. Lucid barely missed the imploding several years ago as it struggled to find an investor who would provide the capital needed to get its ultra-electric electric Air into production. That investor eventually became Saudi Arabia’s sovereign wealth fund, which in September 2018 agreed to invest $ 1 billion in Lucid Motors.
Lucid started in 2007 as Atieva, a company founded by former Tesla VP and board member Bernard Tse and entrepreneur Sam Weng who focused on developing electric car battery technology. Early research, development and possible advances in components and the overall electrical architecture would lay the critical groundwork for the future of Lucid, which emerged in late 2016 with a new publicly stated aim to make electric vehicles (although the company had already worked quietly on this for a couple of years). Rawlinson, who left Tesla to join Lucid in 2013 as CTO, was one of the driving forces behind this new mission. Later he also took the title of CEO and the responsibility.
While Lucid is often a competitor to Tesla, Rawlinson has told TechCrunch that the air is thought to be a competitor to the Mercedes S-Class, the German carmaker’s flagship for internal combustion engines. The investor presentation released on Monday reiterates Rawlinson’s earlier comments, noting that “Tesla is innovative but not luxurious.” Lucid describes itself as “post luxury” and in competition with “established luxury” brands Audi, BMW and Mercedes-Benz.
Lucid takes a page from Tesla’s game book and outlined plans to eventually be able to offer cheaper electric cars when it scales production.
Rawlinson remains CEO and CTO. The deal is expected to close during the second quarter.
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