Lucid to unveil Tesla Model 3 rival by 2025
EV startup’s $56 bil. valuation sparks bubble concerns
SAN FRANCISCO (Reuters) — Lucid Motors Chief Executive Officer Peter Rawlinson told Reuters on Tuesday that the luxury electric car maker plans to launch a rival to Tesla’s Model 3 in 2024 or 2025.
The company led by the former Tesla engineer is following the same strategy as Tesla, starting with a luxury car to create a halo around the brand and then expand into the mass market.
This week it announced plans to go public by merging with a blank check company, a move that indicated a market capitalization of $56 billion — before regular production of Lucid Motors’ first model has begun.
Scaling up production of a mass automobile is a major financial challenge, Rawlinson said.
“I can’t wait to do that,” he told Reuters, referring to the rival to Tesla’s Model 3, it’s least expensive sedan. But first Rawlinson said he would for now focus on the luxury, bigger car, which paradoxically takes fewer resources.
“To make a smaller car requires more capital, because you need a bigger factory and more automation,” he said.
Experts say it may be too late for Lucid to launch the affordable model as legacy makers like Volkswagen, Hyundai Motor and Ford are already introducing affordable models to challenge Tesla.
“There is a question mark over whether there will be a market left for Lucid after four to five years,” Mel Yu,
an automotive industry analyst, said.
Lucid Motors’ first electric car, the luxury Air, won’t go in production now until late 2021, later than the spring 2021 launch initially planned.
Rawlinson said that the carmaker expects production of a less expensive, sub-$70,000 version of the luxury sedan in 2022, followed by a sport utility vehicle code-named Project Gravity in 2023. He said he is interested in developing pickup trucks and commercial vehicles, but they are several years away and might be built with partners.
“The world needs $25,000 cars urgently. Lucid can’t do it for another eight years realistically,” he said, adding
that even Tesla has not launched such a model yet.
He also said six well-known automakers have reached out to him over the last month and expressed interest in Lucid Motors’ technology. Cooperating with another company could lead to making a $25,000 car in the next three to four years, he added.
He also said it is too early for the company to make its own battery cells for now, adding that it has contracts with suppliers LG Chem and Samsung SDI.
Shares of Churchill Capital IV Corp fell more than 40 percent on Tuesday, as its merger with electric vehicle maker Lucid Motors sparked
concerns about the real worth of the company which has yet to start regular production.
The share slump followed weeks of speculation about the deal that had pushed the stock of Churchill Capital IV, a special purpose acquisition company (SPAC), up more than 500 percent.
Still, even after the slide, Churchill Capital IV’s stock price implied a $56 billion market capitalization for Lucid once the deal closes, making it one of the highest valued vehicle makers in the world, and marking a hefty premium to the price at which the Lucid agreed to merge with Churchill Capital IV.