Tesla rival Lucid Motors to go public in $24bn mega Spac deal

Michael Cogley
·3-min read
The Lucid Air is set to launch later this year with a $169,000 price tag - Lucid Motors
The Lucid Air is set to launch later this year with a $169,000 price tag - Lucid Motors

Electric vehicle start-up Lucid Motors is set to go public through a blank-cheque merger that will value the firm at $24bn (£17.03bn) in the biggest ever deal of its kind.

The Californian company, which is headed up by British ex-Jaguar and Tesla engineer Peter Rawlinson, will combine with Churchill Capital IV (CCIV), a special purpose acquisition company (Spac) controlled by veteran investment banker Michael Klein.

Lucid, which is majority owned by the Saudi Arabian sovereign wealth fund, will generate around $4.4bn in cash from the deal as it pushes ahead with the production of its debut model later this year. The deal will represent the largest such reverse merger to date.

Rumours of a public deal for Lucid have been long-circulated, with the share price of Mr Klein’s Spac soaring more than 400pc this year to a high of $58 ahead of the announcement. Once details of the agreement were made public, shares in CCIV dipped by more than a quarter in after-hours trading.

Mr Rawlinson will continue to lead the company as both chief executive and chief technology officer. Lucid employs almost 2,000 people, with a further 3,000 expected to be added in the US by the end of 2022.

The former Tesla engineer said the company was “rethinking how EVs are designed”.

“Lucid is going public to accelerate into the next phase of our growth as we work towards the launch of our new pure-electric luxury sedan, Lucid Air, in 2021 followed by our Gravity performance luxury SUV in 2023,” he said in a statement on Monday.

“Financing from the transaction will also be used to support expansion of our manufacturing facility in Arizona, which is the first greenfield purpose-built EV manufacturing facility in North America, and is already operational for pre-production builds of the Lucid Air.”

Lucid Motors chief executive Peter Rawlinson - Lucid
Lucid Motors chief executive Peter Rawlinson - Lucid

The Arizona facility is set to expand in three phases, with the company aiming to build 365,000 units a year.

Mr Rawlinson also said the new funding will help it supply its EV tech to other automotive manufacturers.

Mr Klein, the chief executive of CCIV, said he believed Lucid’s “superior and proven” technology made it a “highly attractive investment”.

Lucid claims its first car, the Air - due to launch later this year - will boast a range of over 500 miles on a single charge. By comparison Tesla’s Model S Plaid + saloon boasts a range of 520 miles on a single charge.

The Air will target the high-end luxury car market and come with a price tag of $169,000. Lucid anticipates it will sell 20,000 vehicles next year, generating revenues of $2.2bn. The company expects its revenue to rise as high as $9.9bn in 2024, according to a presentation given to investors.

Mr Rawlinson was Tesla’s chief engineer on Tesla’s Model S, though Elon Musk has downplayed his role in the development of the saloon, insisting he left Tesla “in the lurch just as things got though in 2012”.

In an interview with The Telegraph in September, Mr Rawlinson outlined where Lucid will look to target.

“Today there isn’t a luxury EV available for anyone to buy anywhere in the world,” he says.

“I’m not hammering Tesla unduly here, I’m just an observer, I’m being pretty analytical. I think they’re beautifully engineered, super products, but not true luxury.”

The Spac deal is the biggest injection of cash into Lucid since the Saudi fund poured more than $1bn in two years ago. Churchill and Lucid said the agreement also included a $2.5bn private placement in public equity, known as PIPE.

The companies said the PIPE investment was led by the Saudi backers as well as funds from BlackRock, Fidelity Management, Franklin Templeton, Neuberger Berman, Wellington Management, and WInslow Capital.