Lucid Motors Nearing Deal Closure to Go Public via SPAC

Lucid Air. Their first vehicle to launch. Image from Lucid Motors

The electric car maker Lucid Motors Inc that has been on the radar of Emerald Investments pre initial public offering tracker is looking to close a deal soon with Michael Klien’s SPAC (Special Purpose Acquisition Company; takes companies public without the tradition IPO process). The announcement could come as early as next week (week of February 21, 2021), according to various sources.

The combined entity will be as much as $15 billion. The SPAC which has been dealing and negotiating with Lucid Motors Inc has been in discussion for a while to raise between $1 billion to $1.5 billion in funding from institutional investors. In early to mid January, Lucid Motors Inc has been hinting potential initial public offering possibilities which raised discussions about the luxury electric car maker.

Launched in August of 2007, Lucid Motors Inc, started off originally as “Lucid” has come a long with planning and vehicle production. Their attempt to use efficiency metrics, to improve the flow and function of electric vehicles costed them a lot of time to make a step forward into making official plans.

Lucid Motors Inc has completed one stage of construction on their vehicle production plant which will allow for full scale production of their first vehicle, Lucid Air. Most of Lucid Motors Inc employees, around 500, were previous employees at major car companies such as Tesla and Mazda.

The CEO/CTO of the company Peter Rawlinson was the former VP of Engineering at Tesla before his journey with Lucid Motors Inc. In October of 2016, Lucid Motors rebranded and announced their goals to develop all-electric and high-performance vehicles.

In late 2016, Lucid Motors Inc announced plans to construct a $700 million production plant in Casa Grande, Arizona, which allowed them to state projections of hiring 2,000 employees by the mid 2020s. Their plan was to start off with 20,000 vehicles per year and projected to expand up to 130,000 vehicles per year. With their planned factory, their estimated capacity was 380,000 cars per year.

However, after making such announcements, Lucid Motors failed to meet their production expectation of starting in early 2019. Since then, the company seemed to be in a spiral to plan with their future production, which makes sense as the head competition and other manufacturers are developing faster of electric vehicles.

During fall of 2018, Lucid Motors Inc announced plans with the Public Investment Fund of Saudi Arabia for a funding valuation over $1 billion. This investment, completed in early/mid 2019, would fund the engineering and testing of their first model, Lucid Air. With delays in funding and planning, the construction of their plant in Arizona began in late 2019, and just recently finished allowing Lucid Motors Inc to prepare for official production in spring of 2021.

Lucid Motors Inc currently has four variations of their model, the Lucid Air which starts from $69,000 and can go as high as $161,500 with different variations of the model in between (all prices in USD). Reservations for the model start from $300 to $7,500, and can be reserved now on the Lucid Motors website. The United States has allowed for a $7,500 federal tax credit for the car maker, which allows more buyers to be interested.

The deal Lucid Motors Inc could be announced of Tuesday, February 23 if the talks with blank-check company started by investment banker Michael Klien, go through. However, the talks could fall apart as stated by various sources, meaning the chanced of Lucid Motors Inc announcing a deal are still faded.

Michael Klien was a former Citigroup Inc employee who will be using his largest SPAC, Churchill Capital Corp IV which has raised more than $2 billion. Michael Klein plays and will play a big role in investment negotiations as he played a significant role as an advisor to its Public Investment Fund. As many previous electric car companies, who started off as startups to do SPAC dealings, Lucid Motors Inc is speculated to be the most established companies to do so, facing head to head with Tesla Inc.

Lucid Motors Inc would also have the larges SPAC deals by far to be announced. With the now proper production and planning Lucid Motors Inc has, many investor are speculating high performance for their IPO if announced, as the company aims to have deliveries for all of 2022. With a potential new SUV being released as well, “Project Gravity”, it looks like Lucid Motors Inc is going to have an interesting expansion to their vehicle line up, having other electric car companies stand on their toes as competition arises.

What do you think? Will Lucid Motors Inc go through with their SPAC dealings? How will they perform if they do?

Let us know!

Written by: Karthik Ganapathiraju, Wil Peters, and Aneeshan Balakaran

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