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Lucid Motors strikes SPAC deal to go public with $24 billion valuation

Lucid Motors reached an settlement to turn out to be a publicly traded firm by a merger with special-purpose acquisition firm Churchill Capital IV Corp, within the largest deal but between a blank-check firm and electrical automobile startup. 

The mixed firm, through which Saudi Arabia’s sovereign fund will proceed to be the biggest shareholder, could have a transaction fairness worth of $11.75 billion. Non-public funding within the public fairness deal is priced at $15 a share, placing the implied the pro-forma fairness worth at $24 billion. The announcement comes greater than every week after Bloomberg, citing unnamed sources, reported a deal was near being finalized.

Lucid follows a string of different, albeit smaller valued, SPAC mergers with electrical automobile startups which have been introduced this yr, together with Arrival, Canoo, Fisker and Lordstown Motors. A number of EV infrastructure corporations together with EVgo and ChargePoint have additionally become public companies by way of SPAC mergers.

Lucid may need been probably the most anticipated. The hype and hypothesis that has been rampant for weeks drove up the inventory worth of Churchill Capital IV Corp from its opening worth of $10 a share greater than 470% since January 2021. The skyrocketing share worth, plummeted greater than 30% after the small print of the deal have been introduced.

The non-public funding and money from Churchill will present roughly $4.Four billion in whole funding to Lucid. That capital might be put to work to hurry up and broaden Lucid’s plans. The corporate plans to start manufacturing and deliveries of the Lucid Air in North America within the second half of this yr. The Air will come to Europe in 2022, adopted by China in 2023. The Gravity efficiency luxurious SUV is predicted to return to market in North America in 2023. The automobiles might be produced at its new manufacturing facility in Casa Grande, Arizona. 

The funding might be used to deliver these two automobiles to market in addition to to broaden its manufacturing facility in Arizona, Lucid CEO and CTO Peter Rawlinson mentioned Monday. The corporate plans to broaden the manufacturing facility over one other three phases within the coming years to have the capability to supply 365,000 items per yr at scale. The preliminary part of the $700 million manufacturing facility was accomplished late final yr and could have the capability to supply 30,000 automobiles a yr.

Picture Credit: Lucid Motors

The deal can even assist Lucid notice its imaginative and prescient to provide electrical automobile applied sciences to 3rd events comparable to different automotive producers in addition to supply power storage options within the residential, business and utility segments, Rawlinson mentioned.

Scaling an electrical automobile firm is just not low cost or straightforward. Lucid narrowly missed imploding a number of years in the past because it struggled to seek out an investor that would offer the capital it wanted to deliver its ultra-luxe electrical Air sedan into manufacturing. That investor ended up being Saudi Arabia’s sovereign wealth fund, which agreed in September 2018 to invest $1 billion into Lucid Motors.

Lucid started in 2007 as Atieva, an organization based by former Tesla VP and board member Bernard Tse and entrepreneur Sam Weng that centered on growing electrical automobile battery expertise. The early analysis, improvement and eventual progress within the elements and total electrical structure would lay the vital floor work for the longer term Lucid, which emerged on the finish of 2016 with new publicly acknowledged function to make electrical automobiles (though the corporate had already been working quietly at this for a few years). Rawlinson, who left Tesla to hitch Lucid in 2013 as CTO, was one of many driving forces behind this new mission. He later took on the CEO title and accountability as properly.

Whereas Lucid is commonly couched as a competitor to Tesla, Rawlinson has advised TechCrunch the Air is supposed to be a rival of the Mercedes S Class, the interior combustion engine flagship of the German automaker. The investor presentation launched Monday echoes Rawlinson’s earlier feedback, noting that “Tesla is progressive however not luxurious.” Lucid describes itself as “put up luxurious” and in competitors with “established luxurious” manufacturers Audi, BMW and Mercedes-Benz.

Lucid is taking a web page out of Tesla’s playbook and outlined plans to finally supply extra reasonably priced EVs as soon as it scales manufacturing.

Rawlinson will stay as CEO and CTO. The deal is predicted to shut within the second quarter.

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