Lucid Motors, an American manufacturer of electric vehicles (“EVs”), is set to go public after completing a merger with Churchill IV Capital Corp. (NYSE: CCIV). The merger deal is worth $11.75 billion.
The EV maker is run by Peter Rawlinson, who formerly worked as an engineer for Tesla Inc. (NASDAQ: TSLA). Lucid comes as the most recent EV maker to enter the IPO market at a time when investors are flocking to the electric vehicle sector after seeing the way in which the shares of Tesla have surged in the recent past.
Another factor that is accelerating investor interest in the EV industry has to do with the tightening restrictions on internal combustion engine automobiles in Europe and other parts of the world. The shares of CCIV fell in extended trading to approximately $40, and this gave the merged company a market capitalization of almost $64 billion. This is quite high, given that General Motors Co. has a $76 billion market capitalization.
Lucid Motors, which is based in California, says it is working according to its set timelines and will begin producing and delivering its first EV luxury sedan after June this year. These deliveries will initially be within the North American market.
Lucid has a factory in Arizona, and it plans to produce at least 20,000 units of its Lucid Air model in 2022, before ramping up to 251,000 units by 2026. Those additional units will include other models, such as Lucid’s planned electric SUV.
The sedan made by Lucid is expected to give Tesla a run for its money as Tesla has had no competition in the premium sedan segment of the EV sector. The price of the Lucid Air is expected to start at $77,400, and the vehicle will be the first to offer a range of 500 miles. A taste of the competition ahead could be indicated by Tesla’s decision to lower the price of its Model S soon after Lucid announced the price of its Lucid Air.
Meanwhile, CCIV, which struck the deal with Lucid, is seeing an influx of new investors. The newest among the incoming investors are having to pay a premium in order to get a slot in the ranks of the private investors behind the merger with Lucid before the firm goes public.
The cash injection by CCIV is the largest investment yet from the time Lucid got an injection of $1 billion from the Saudi Arabia-run Public Investment Fund back in 2018. All that’s left is for Lucid to deliver on its promise of rolling EVs off its Arizona production line.
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