Lucid Motors is the latest electric vehicle company to announce that it will go public through a special purpose acquisition company (SPAC) merger with blank-check firm Churchill Capital IV Corp. (CCIV). The deal, which is the largest of its kind yet, values the alliance at an implied pro forma equity value of $24 billion.
The Newark, California-based luxury EV maker confirmed in a press release that it has reached an agreement with CCIV that will have an $11.75 billion transaction equity value. Included in the transaction is “an approximately $2.1 billion cash contribution by CCIV and a $2.5 billion, fully committed PIPE with an investor lock-up provision that binds holders well beyond closing,” with PIPE (private investment in the public equity) price set at $15 a share. CCIV shares were down as much as 46 percent Tuesday following the news, CNBC reports.
The automaker’s CEO and CTO Peter Rawlinson noted that Lucid will use the approximately $4 billion generated from the deal to roll out its upcoming Lucid Air luxury sedan – set to begin production and deliveries in the U.S. in the second half of 2021. Lucid says that the Air, which starts at $77,400 ($69,000 after a U.S. tax credit), will be capable of more than 500 miles of range per single charge – the first to reach this milestone.
Lucid also plans to use the funding to execute its plan to launch its Gravity performance luxury SUV in 2023. Both vehicles will be built at Lucid’s new Casa Grande, Arizona, factory, which Rawlinson says will benefit from the capital.
“Financing from the transaction will also be used to support the 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,” said Rawlinson. He added that the “transaction further enables the realization of our vision to supply Lucid’s advanced EV technologies to third parties such as other automotive manufacturers as well as offer energy storage solutions in the residential, commercial and utility segments.”
Lucid joins a growing list of EV startups that have recently undergone SPAC mergers such as Lordstown Motors, Canoo, and Fisker. Additionally, last month EVgo – the largest public EV fast-charging network in the U.S. – announced that it would go public via a SPAC merger set to close in the second quarter of this year.
“CCIV believes that Lucid’s superior and proven technology backed by clear demand for a sustainable EV make Lucid a highly attractive investment for Churchill Capital Corp IV shareholders, many of whom have an increased focus on sustainability,” said Chairman and CEO of CCIV Michael Klein. “We are pleased to partner with Peter and the rest of Lucid’s leadership team as it delivers the highly anticipated Lucid Air to market later this year, promising significant disruption to the EV market and creating thousands of jobs across the U.S.”
Today, nearly 2,000 people are employed by Lucid, which confirmed plans to add an additional 3,000 employees in North America by the end of 2022.
The automaker also revealed that “with directly-owned retail locations already open in California and Florida, Lucid will continue to expand its retail and service footprint across the U.S. throughout 2021.”