Lucid Motors began trading Monday on Wall Street after completing its SPAC merger. Under the ticker symbol LCID, the stock jumped about 10% to quite $26. The merger with Churchill Capital Corp IV — a special purpose acquisition company created by longtime underwriter Michael Klein — was officially announced in February and shares of the blank-check company immediately lost about half their value. On speculation within the weeks leading up to the Lucid deal, Churchill Capital Corp IV had surged some 400% to an all-time high of $64.86.
The equity value of the deal paid existing company shareholders $11.75 billion. It also generated over $4 billion in cash for expansion plans, including Lucid’s current factory in Arizona. The funding puts Lucid “in a really enviable position” compared with rival Tesla, which secured about $226 million in its 2010 initial public offering, Lucid CEO Peter Rawlinson said Monday on “Squawk Box.” The ex-Tesla engineering executive said the merger secures Lucid’s financial runway through the top of 2022.
“We do have a really illustrious roster of blue-chip institutional investors but we’ve attracted such a lot interest from the retail sector also,” Rawlinson said. “It’s a testament to the appeal of our product and our technology that we’ve enjoyed that position.” The reverse merger was approved in an extended vote by quite 99% of company shareholders, Klein said during a call Thursday. The deal, which valued Lucid at an initial pro forma valuation of $24 billion, was the most important among similar transactions involving EV companies and blank-check firms. Previous SPAC deals with EV start-ups like Nikola, Fisker, and Lordstown Motors earned valuations of but $4 billion.
Lucid had some difficulty attracting capital until September 2018. That’s when Saudi Arabia’s sovereign wealth jumped in with funding. With an ownership stake of quite 60% in Lucid, the kingdom’s Public Investment Fund stands to form an almost $20 billion profit on an investment of $2.9 billion, consistent with The Wall Street.
California-based Lucid expects to deliver its new electric vehicle, the Lucid Air, within the last half of this year after delays largely thanks to the Covid pandemic. Rawlinson previously told CNBC he expects the Air to pave the way for a lineup of future all-electric vehicles, including an SUV, starting production in early 2023, and cheaper vehicles down the road . The company said Monday it’s 11,000 paid reservations for Lucid Air models.
“We’re accelerating our factory to accommodate increased volume. We’ve just started grading the location for a 2.7 million sq ft expansion,” Rawlinson said, adding that the merger enables “strategic, judicial growth to expand our manufacturing capability and to mitigate risk as a corporation .” As Tesla exposes its charging network to other brands, Rawlinson said it might be a “good solution” for various EVs to figure on each other’s networks.
While the corporate is launching its Dream model at $169,000, Rawlinson said it hopes to form its other Air models cheaper within the near future. The Air starts at $69,000 after the federal decrease . “I believe that product defines brands, not the opposite way around,” said Rawlinson, who joined Lucid as chief technology officer in 2013 then CEO three years later. “We need this transition towards sustainable mobility, and that’s what our advanced technology offers .”