Backed by Saudi Arabia’s PIF, Lucid Motors plans to go public with $24bn valuation
Lucid Motors is merging with Churchill Capital Corp IV, a blank-cheque company that values the combined entity at a pro-forma equity value of $24 billion, the biggest deal involving a special purpose acquisition company.
Lucid, which is backed by Saudi Arabia’s Public Investment Fund, will receive $4.4bn in cash from the deal that will help it expand its manufacturing facility in Arizona and increase its retail and service presence across the US throughout 2021, the company said.
“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,” said Peter Rawlinson, the car maker’s chief executive.
“This transaction further enables the realisation of our vision to supply Lucid’s advanced EV technologies to third parties such as other automotive manufacturers,” added Mr Rawlinson, who was chief engineer on Tesla’s flagship Model S.
The deal includes a $2.5bn private placement in public equity (at $15 a share, or a 50 per cent premium to Churchill’s net asset value). The transaction was led by PIF, BlackRock, Fidelity Management, Franklin Templeton, Neuberger Berman, Wellington Management and Winslow Capital. The PIF invested more than $1bn in 2018 in Lucid. The combined company has a transaction equity value of $11.8bn. Churchill’s board and Lucid’s special transaction committee have unanimously approved the proposed deal, which is expected to close in the second quarter of 2021.
The deal is subject to approval by Churchill stockholders representing a majority of the outstanding Churchill voting power. None of Lucid’s existing investors will sell stock in the transaction and are subject to a six-month lock up for the shares they receive.
Lucid, based in California, was founded in 2007 under the name Atieva and was initially focused on building electric-vehicle batteries. In 2016, it rebranded as Lucid Motors, moved away from being a supplier and shifted towards making a luxury sedan to rival Tesla known as the Lucid Air.
The sedan has four price ranges starting at $69,900, going up to $161,500. The Air has an estimated range of more than 832 kilometres and can go from zero-to-100kph in less than 2.5 seconds, based on US Environmental Protection Agency estimates. That compares with Tesla’s S model, which has a range of 663km, Jaguar’s i-Pace model’s 376km and Porsche Taycan’s 365km.
Lucid will produce the Air at its new factory in Casa Grande, Arizona. Output will accelerate in the second half of 2021 as the factory increases production. The company’s manufacturing facility in Arizona is the first greenfield purpose-built EV manufacturing facility in North America and capable of producing about 365,000 units per year. Lucid plans to expand it over three phases.
The company estimates it will have 0.6 per cent of the global EV market share in 2022, rising to 0.7 per cent the following year. Lucid forecasts 20,000 vehicle deliveries in 2022 generating $2.2bn in sales.