Lucid Motors strikes SPAC deal to go public with $24 billion valuation | TechCrunch (2024)
Kirsten Korosec3 years
Lucid Motors reached an agreement to become a publicly traded company through a merger with special-purpose acquisition company Churchill Capital IV Corp., in the largest deal yet between a blank-check company and an electric vehicle startup.
The combined company, in which Saudi Arabia’s sovereign fund will continue to be the largest shareholder, will have a transaction equity value of $11.75 billion. Private investment in the public equity deal is priced at $15 a share, putting the implied pro-forma equity value at $24 billion. The announcement comes more than a week after Bloomberg, citing unnamed sources, reported a deal was close to being finalized.
Lucid follows a string of other, albeit smaller-valued, SPAC mergers with electric vehicle startups that have been announced this year, including Arrival, Canoo, Fisker and Lordstown Motors. Several EV infrastructure companies including EVgo and ChargePoint have also become public companies via SPAC mergers.
Lucid might have been the most anticipated. The hype and speculation that has been rampant for weeks drove up the stock price of Churchill Capital IV Corp. from its opening price of $10 a share more than 470% since January 2021. The skyrocketing share price plummeted more than 30% after the details of the deal were announced.
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The private investment and cash from Churchill will provide roughly $4.4 billion in total funding to Lucid. That capital will be put to work to speed up and expand Lucid’s plans. The company plans to begin production and deliveries of the Lucid Air in North America in the second half of this year — that’s a notable slip in the timeline; the company previously had aimed to begin deliveries this spring. The Air will come to Europe in 2022, followed by China in 2023. The Gravity performance luxury SUV is expected to come to market in North America in 2023. The vehicles will be produced at its new factory in Casa Grande, Arizona.
The funding will be used to bring those two vehicles to market as well as to expand its factory in Arizona, Lucid CEO and CTO Peter Rawlinson said Monday. The company plans to expand the factory over another three phases in the coming years to have the capacity to produce 365,000 units per year at scale. The initial phase of the $700 million factory was completed late last year and will have the capacity to produce 30,000 vehicles a year.
Image Credits: Lucid Motors
The deal will also help Lucid realize its vision to supply electric vehicle technologies to third parties, such as other automotive manufacturers, as well as offer energy storage solutions in the residential, commercial and utility segments, Rawlinson said.
Scaling an electric vehicle company is not cheap or easy. Lucid narrowly missed imploding several years ago as it struggled to find an investor that would provide the capital it needed to bring its ultra-luxe electric Air sedan into production. That investor ended up being Saudi Arabia’s sovereign wealth fund, which agreed in September 2018 to invest $1 billion into Lucid Motors.
Lucid began in 2007 as Atieva, a company founded by former Tesla VP and board member Bernard Tse and entrepreneur Sam Weng that focused on developing electric car battery technology. The early research, development and eventual progress in the components and overall electric architecture would lay the critical ground work for the future Lucid, which emerged at the end of 2016 with the new publicly stated purpose to make electric vehicles (although the company had already been working quietly at this for a couple of years). Rawlinson, who left Tesla to join Lucid in 2013 as CTO, was one of the driving forces behind this new mission. He later took on the CEO title and responsibility as well.
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While Lucid is often couched as a competitor to Tesla, Rawlinson has told TechCrunch the Air is meant to be a rival of the Mercedes S Class, the internal combustion engine flagship of the German automaker. The investor presentation released Monday echoes Rawlinson’s earlier comments, noting that “Tesla is innovative but not luxury.” Lucid describes itself as “post luxury” and in competition with “established luxury” brands Audi, BMW and Mercedes-Benz.
Lucid is taking a page out of Tesla’s playbook and outlined plans to eventually offer more-affordable EVs once it scales production.
Rawlinson will remain as CEO and CTO. The deal is expected to close in the second quarter.
Lucid Group, Inc. is an American automotive and technology company that makes electric vehicles and supplies advanced electric vehicle powertrain systems. The company is headquartered in Newark, California. In September 2021, the company began producing the Lucid Air sedan at its factory in Casa Grande, Arizona.
strikes SPAC deal to go public with $24 billion valuation. Lucid Motors reached an agreement to become a publicly traded company through a merger with special-purpose acquisition company Churchill Capital IV Corp., in the largest deal yet between a blank-check company and an electric vehicle startup.
EV maker Lucid illegally fired workers for union support, U.S. labor board alleges. U.S. labor board prosecutors have accused EV maker Lucid Group of firing two employees because they joined and supported the United Auto Workers, The union has vowed to organize workers at 13 automakers, including Lucid.
How likely is Lucid to be a millionaire maker? Lucid is a troubled business even though it produces great EVs. As it stands, the odds of the stock turning a $15,000 investment into $1 million are exceedingly slim -- even over a long period of time.
Saudi Arabia has consistently poured money into Lucid via its public investment fund (PIF). This involved a $1 billion investment in May 2024 and almost $3 billion in 2023.
Those investors who prioritize avoiding Chinese exposure in their portfolios and who are also considering buying Lucid stock will be relieved to know that it's not a Chinese company. However, Lucid's ties to Saudi Arabia are substantial, and may disqualify the company as a potential investment for some.
Lucid (LCID) stock has continued to decline, hit by continued production-related concerns. The company cut its production forecasts, signaling stagnant deliveries growth. Additional concerns around cash burn and price target cuts from analysts have investors on the sidelines.
Lucid Group, Inc. stock would need to gain 2,958.10% to reach $100. According to our Lucid Group, Inc. stock forecast, the price of Lucid Group, Inc. stock will not reach $100. The highest expected price our algorithm estimates is $ 22.51 by Jul 29, 2025.
Lucid Air electric vehicles at the company's showroom in Tysons, Virginia. Lucid Group Inc. is getting a $1 billion cash injection from its biggest investor, an affiliate of Saudi Arabia's Public Investment Fund, providing the troubled electric carmaker with a needed lifeline.
Shares of LCID will remain on the Nasdaq 100 until Dec. 18. To be sure, the shares of these companies will not be delisted, meaning they will continue to trade on stock exchanges, but will merely not be included in the Nasdaq 100 index.
Lucid expects its $4.78 billion in liquidity at the end of 2023 to last through "at least" 2025 as it ramps up its production of the Gravity SUV, but analysts expect it to continue burning cash at an alarming rate: it's expected to generate negative annual free cash flows (FCF) of $3.51 billion in 2024, $2.65 billion ...
Lucid completed the previously announced merger with Churchill Capital Corp IV on July 23, 2021 . The combined company will now operate as Lucid Group, Inc. Lucid will be ringing the opening bell at Nasdaq on July 26 to celebrate the company's public listing.
The 9 analysts with 12-month price forecasts for Lucid Group stock have an average target of 3.71, with a low estimate of 2.90 and a high estimate of 5.00. The average target predicts an increase of 7.23% from the current stock price of 3.46.
Lucid expects to deliver 9,000 vehicles this year, and the 11 analysts covering the stock expect the company to earn $736 million in revenue this year and $1.74 billion in 2025. Those analysts also expect the company to continue burning money, losing $1.39 per share this year and $1.10 next year.
The company's financial health is under scrutiny, especially considering its negative free cash flow of $3.07 billion over the last twelve months, which represents about 90% of its cash and cash equivalents.
Lucid Group Is Cutting 6% of Its Workforce. The Stock Is Down. The electric-vehicle start-up says the job cuts are part of a restructuring plan to optimize its operating expenses.
Lucid has struggled to meet its goals for deliveries and production. Growth has been extremely hard to come by, and the company has been losing hundreds of thousands of dollars on every vehicle built because it has not been able to scale production.
Largest shareholders include Public Investment Fund, Vanguard Group Inc, BlackRock Inc., VTSMX - Vanguard Total Stock Market Index Fund Investor Shares, NAESX - Vanguard Small-Cap Index Fund Investor Shares, Morgan Stanley, State Street Corp, Geode Capital Management, Llc, VISGX - Vanguard Small-Cap Growth Index Fund ...
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