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Tesla Rival Lucid Motors To Get Listed Through A SPAC Deal Worth $24bn

Tesla Rival Lucid Motors To Get Listed Through A SPAC Deal Worth $24bn
The United States based luxury electric vehicle maker Lucid Motors will go public through the merger deal path or through the special purpose acquisition company (SPAC) route at a combined pro-forma equity value of $24 billion.
The electric car maker has agreed to merge with blank-check firm Churchill Capital IV Corp to create a new company that will go public.
Lucid was formed and run by an ex-Tesla engineer and is the latest company to get listed and benefit from the growing interest of investors in the EV sector. Interest in the sector has been driven by the rise of Lucid’s rival Tesla Inc as well as toughening emissions regulations in Europe and elsewhere.
A $2.1 billion cash contribution from CCIV and a PIPE (private investment in public equity) investment of 2.5 billion from investors is included in the deal which has a transaction equity value of $11.75 billion.
Last year, there were other companies in this sector that went public through mergers with various SPACs. While some of the mergers and public listings have done well such as the one for Fisker, there are others such as the Nikola that have not performed as well as their peers.
There were reports in the media last week about a financing effort to back the Lucid deal being launched by Michael Klein.
The publicly traded shares of CCIV dropped almost a third to $40.35 in volatile extended trading which resulted in the merged company to end up with a market capitalization of about $64 billion. In Comparison, the market value of General Motors Co is about $76 billion.
Lucid is set to begin production and deliveries of Lucid Air, its first luxury sedan, in North America by the second half of the current year, the company said. On a previous occasion, the company had said it planned to begin deliveries of its vehicles in spring of 2021.
The company has set the aim of delivering 20,000 vehicles in 2022 and 251,000 in 2026 which will include a number of other models such as an electric sport utility vehicle which will be made at its factory in Arizona, Lucid said.
The sedan of the company will be the first electric vehicle to achieve a single charge driving range of 500 miles (805 km) and the starting price of the vehicle will be $77,400.
A price cut of Tesla’s flagship Model S sedan was announced by the company’s chief Elon Musk after Lucid priced its sedan. "The gauntlet has been thrown down!" he tweeted.
Wall Street dealmaker and former Citigroup banker Michael Klein is backing CCIV – which along with new private investors are being given shares in the new merged company at varied prices with a higher price for the newer private investors.
A private investment of $2.5 billion from Saudi Arabia's Public Investment Fund, funds managed by BlackRock and others is also part of the deal with CCIV.

Christopher J. Mitchell

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