Tesla rival Lucid set to go public in US$24b deal
Luxury electric vehicle maker Lucid Motors on Monday agreed to go public by merging with blank-check firm Churchill Capital IV Corp in a deal that valued the combined company at a pro-forma equity value of US$24 billion.
Lucid, run by an ex-Tesla engineer, is the latest firm to tap the initial public offering market, with investors rushing into the EV sector, spurred by the rise of Tesla Inc and with emissions regulations toughening in Europe and elsewhere.
The deal, with a transaction equity value of US$11.75 billion, includes US$2.1 billion in cash from CCIV and a private investment in public equity investment of 2.5 billion from investors.
Other main players in the sector went public through mergers with so-called special purpose acquisition companies last year. While some deals such as Fisker have delivered well, others such as Nikola have given up short-term gains.
Reuters was first to report last week that Wall Street dealmaker Michael Klein had launched a financing effort to back the Lucid deal.
The publicly traded shares of CCIV fell nearly a third to US$40.35 in volatile extended trading, giving the merged company a market capitalization of about US$64 billion. By comparison, General Motors Co is worth about US$76 billion.
Lucid said it is on track to start production and deliveries in North America in the second half of this year with Lucid Air, its first luxury sedan. It had previously said it planned to start its deliveries in spring of 2021.
Lucid, which plans to build vehicles at its factory in Arizona, aims to deliver 20,000 vehicles in 2022.
With a starting price of US$77,400, the sedan is slated to be the first to achieve a 500-mile (805-kilometer) driving range.
After Lucid priced its sedan, Tesla chief Elon Musk announced a price cut to its flagship Model S sedan. “The gauntlet has been thrown down!” he tweeted.