Lucid Motors strikes SPAC deal to go public with $24 billion valuation
Lucid Motors has signed an agreement to become a public corporation in a partnership with the Churchill Capital IV Corp., and is also the biggest transaction between a wholesaler and a startup for electric cars.
The merged group, of which the sovereign fund of Saudi Arabia continues to be the main shareholder, would be worth $11.75 billion in transaction equity.
Private public equity funding is valued at $15 per share, which means that the pro-forma equity valuation is $24 billion.
The statement comes more than a week after Bloomberg has stated that an agreement is nearly completed, citing anonymous sources.
Lucid joins a series of other, but less valuable, SPAC merges with startups for electric cars, including Arrival, Canoo, Fisker and Lordstown Motors that were announced this year.
Several EV infrastructure firms like EVgo and ChargePoint became public undertakings through SPAC mergers.
Perhaps Lucid was the most awaited.
A rampant excitement and uncertainty for weeks has powered Churchill Capital IV Corp's stock price of $10 per share by more than 470 percent since January 2021.
The rising share price crashed more than 30% after the transaction was announced.
Churchill's private investment and cash would provide Lucid with nearly $4.4 billion in overall financing.
This money will be put to use to speed up Lucid's ambitions and extend them.
In the second half of this year, the company plans to commence production and distribution of the Lucid Air in North America.
The air arrives in Europe in 2022, followed by China in 2023.
The Gravity Performance SUV is scheduled to be launched in 2023 in North America.
The cars will be assembled at its new plant in Casa Grande, Arizona.
The financing will be used both to sell and develop its Arizona facility, Lucid CEO and CTO Peter Rawlinson said on Monday.
The company is expected to develop the plant in three stages in the coming years to achieve an annual manufacturing capacity of 365,000 units.
At the end of last year the initial phase of the $700 million plant will have the capacity to manufacture 30 000 vehicles annually.
Lucid air motors EV
Credits for images: Lucid Motors
The deal will also allow Lucid to grow its vision to sell electric vehicle technology to third parties, including other car makers, and provide energy storage technologies in the residential, industrial and utility sectors, Rawlinson said.
It's not inexpensive or quick to scal an electric vehicle business.
Lucid failed tightly a few years ago to implode while failing to locate an investor who would have the funding required to manufacture his ultra-luxury electric Air sedan.
The lender ultimately became the sovereign wealth fund for Saudi Arabia, which planned to invest $1 billion in Lucid Motors in September 2018.
Lucid started in 2007 when Atieva, a company founded by Bernard Tse, former VP of Tesla and member of the board and Sam Weng, concentrated on improving battery technologies for electric cars.
Early testing, production and subsequent developments in the components and complete electric architecture will provide a vital foundation for the future Lucid, which emerged at the end of 2016 with a new publicly announced goal of rendering electric vehicles (although the company had already been working quietly at this for a couple of years).
One of the guiding forces behind this new mission was Rawlinson who left Tesla to join Lucid as CTO in 2013.
He later became CEO and also claimed liability.
Although Lucid is also called a Tesla competitor, Rawlinson said that TechCrunch Air is supposed to be a rival to the Mercedes S Class, the German automaker's internal combustion engine flagship.
The investment paper on Monday echoes the earlier remarks by Rawlinson that "Tesla is innovative but not luxury." Lucid describes himself as "post luxury" competing in comparison to Audi, BMW and Mercedes-Benz brands of "established luxury"
Lucid takes a leaf from Tesla's playbook, detailing intentions to potentially produce more competitive EVs once demand is expanded.
As CEO and CTO, Rawlinson will stay.
The deal should be completed in the second quarter.