The Lucid Air sedan is expected to be put into production at a plant to be built in Arizona next year.
Electric vehicle company Lucid Motors plans to go public with a combined equity valuation of $11.75 billion and a pro forma equity value of $24 billion through a reverse merger with a blank check company founded by veteran investment banker Michael Klein.
The deal between Lucid, based in Newark, California, and Churchill Capital Corp IV is the largest in a series of such mergers, involving electric vehicle companies and blank check companies (also known as special purpose acquisition companies) or SPACs.
The previous SPAC dealt with electric car startups such as Nikola, Fisker and Lordstown Motors, whose pro forma valuation was less than $4 billion, but Lucid went further than these companies. Lucid will deliver its first vehicle this spring-a luxury sedan called Air.
The transaction will generate approximately $4.4 billion in cash for Lucid̵
CCIV’s stock fell about 30% in after-hours trading to $40.
Lucid is led by Peter Rawlinson, a former Tesla engineering director and automotive industry veteran, who joined the company in 2013 as the chief technology officer, and then appointed the CEO as CEO in April 2019. He will continue to hold these positions after the expected transaction is completed. According to the two companies.
Lucid was founded in 2007, formerly Atieva, and is now used by its name in its engineering and technical departments to provide batteries for the electric racing circuit Formula E. The company first focused on battery technology, and then changed its name to an electric car manufacturer in 2016 after Rawlinson joined the company to lead technology development for three years.
Until September 2018, when Lucid received US$1 billion in funding from Saudi Arabia’s sovereign wealth fund, it encountered some difficulties in obtaining funds to fund its plan.
Rawlinson last year described the SPAC deal as making money quickly, but did not have enough capital to bring the vehicle into internal production, which led companies such as Fisker to seek contract manufacturers.
Before announcing the news with Klein, Rawlinson said that the company has the funds to start producing Air at a plant in Casa Grande, Arizona, southeast of Phoenix.
The new funds are expected to help Lucid with expansion plans. Rawlinson predicts that Air will become a catalyst for the future all-electric vehicle lineup, including SUVs that will start production in early 2023 and more affordable cars off the assembly line.
According to the company, Lucid currently has nearly 2,000 employees and is expected to add 3,000 employees in the United States by the end of 2022.
The transaction includes a total investment of approximately US$4.6 billion. Its funding comes from CCIV’s $2.1 billion in cash, as well as Saudi Arabia’s sovereign wealth fund and funds and accounts managed by BlackRock, Fidelity, etc., with fully committed PIPE funds of $25 per share of $15.