eResearch | On July 26, Lucid Motors Inc. (NASDAQ: LCID) announced its merger with Churchill Capital Corp IV and its launch on the NASDAQ with a $4.4 billion raise as it readies for production.
Lucid Motors
Headquartered in Silicon Valley, Lucid Motors is building its Electric Vehicle (EV) factory in Arizona with an initial capacity of 10,000 cars a year with an expansion plan to produce 300,000 cars annually.
Targeting production in the second half of 2021, its first car, Lucid Air, is a mid-size luxury sedan with a California-inspired design supported by race-proven technology.
The Company aims to inspire the use of sustainable energy by offering the most appealing electric vehicles.
“Lucid‘s mission is to truly mass industrialize electric cars and electric powertrain systems through the development of the most advanced technology imaginable,” said Peter Rawlinson, CEO and CTO, Lucid Group. “Lucid Air represents the next generation of EVs and creates new standards for interior comfort, range, efficiency, and power. We are on track to meet our projected deliveries for the next two years, and we look forward to delighting our customers around the world with the best electric vehicles ever created.”
The Deal
Lucid Motors became public as Lucid Group, Inc. (NASDAQ: LCID) after a merger with Churchill Capital Corp IV.
The merger and listing provided $4.4 billion of additional capital, which will be used to boost its growth and increase manufacturing capacity to capitalize on expected demand.
Lucid Motors already has over 11,000 paid reservations for its luxury electric vehicle Lucid Air including the fully reserved Dream Edition, the Grand Touring edition, and both Touring and Pure versions.
The Company is currently running quality validation checks and the vehicles are expected to be delivered in the second half of 2021.
Lucid Group plans to quickly expand to meet its goal of offering an extensive range of products driven by the company’s proprietary electric powertrain technology.
Michael S. Klein, Chairman and CEO of Churchill Capital Corp IV, prior to the business combination, said, “Lucid has industry-leading technology, clear demand for its products, and is on track to deliver revenue-generating cars to customers in the second half of this year. We are excited to support Lucid‘s transition into a public company and confident in its ability to address unmet needs in the automotive industry, which is moving towards electrification at a rapid pace and on a global scale.”
Lucid’s new Board of Directors shows diverse expertise and consists of:
- Peter Rawlinson, CEO & CTO, Lucid Group
- Andrew Liveris, Chairman of the Board, formerly Chairman and CEO of The Dow Chemical Company (NYSE: DOW)
- Glenn R. August, Founder and CEO Oak Hill Advisors L.P
- Nancy Gioia, Executive Chairman, Blue Current, Inc
- Frank Lindenberg, former CFO, Mercedes-Benz Cars (NYSE: DAI) and Mercedes-Benz AG
- Nichelle Maynard-Elliott, Director, Element Solutions Inc (NYSE: ESI)
- Tony Posawatz, President & CEO, Invictus iCAR
- Janet S. Wong, Partner (retired), KPMG LLP
EV Industry Highlights
In a scenario of increasing oil prices, the rising demand for low emission vehicles, coupled with government incentives should continue to drive the growth of the electric vehicle market.
To promote the EV market, government support plays a key role in the research of EV batteries, EV charging systems, and electric vehicles.
According to the Research and Markets research firm:
- The market size of the global EVs is expected 4.1 million units in 2021 to 34.8 million units by 2030 at an annual rate of almost 27%.
- Post pandemic demand for EV’s might improve as people are more aware of reducing vehicle emissions.
- Charging points have been installed in several countries since the second half of 2020.
- Passenger car is the fastest-growing segment
Additionally, the passenger car segment should register significant growth during the expected period. A broad range of models, enhanced technology, customer awareness, and availability of subsidies and tax rebates are key factors in the market.
Churchill Capital Corp
Headquartered in New York, Churchill Capital seeks for mergers and/or asset acquisitions, capital stock exchanges, stock purchases, reorganizations, or similar business combinations with one or more businesses.
Churchill Capital’s founder is Michael Klein, who is also the founder of M. Klein and Company, a global strategic advisory firm that provides to its clients a variety of customized advice to meet their objectives.
The three previous SPACs (Churchill Capital I, II, and III) were listed on NYSE at the typical SPAC price of US$10.00 per unit and have raised a total of US$2.48 billion.
- Churchill Capital I (NYSE: CCC), US$690 million in 2018. In 2019, Clarivate (NYSE: CLVT) and Churchill Capital announced their merger agreement. Clarivate was formed in 2016, is present in over 40 countries worldwide, along with over 200 partners. It offers subscription and technology-based solutions based on analytics, patent intelligence and compliance standards, pharmaceutical and biotech intelligence trademark, domain, and brand protection services.
- Churchill Capital II (NYSE: CCX.U), US$600 million in 2019. Last year, SkillSoft (NYSE: SKIL) and Churchill Capital announced they entered into a merger agreement and the acquisition of Global Knowledge. The transaction was valued at an implied enterprise value of $1.3 billion. Founded in 1998, SkillSoft offers digital learning and talent management solutions.
- Churchill Capital III (NYSE: CCXX.U), US$1 billion in 2020. On July 12, 2020, MultiPlan (NYSE: MPLN) and Churchill Capital announced their merger agreement. The transaction was priced with an implied enterprise value of $11 billion which represented a 12.9x EV/Adjusted EBITDA. MultiPlan has over 40 years of expertise and provides innovative cost management solutions for healthcare payors. It partners with over 700 healthcare payers helping them in savings of roughly $19 billion per year in a variety of segments such as commercial health, dental, government, and property and casualty markets.
Notes: All numbers in USD unless otherwise stated. The author of this report, and employees, consultants, and family of eResearch may own stock positions in companies mentioned in this article and may have been paid by a company mentioned in the article or research report. eResearch offers no representations or warranties that any of the information contained in this article is accurate or complete. Articles on eresearch.com are provided for general informational purposes only and do not constitute financial, investment, tax, legal, or accounting advice nor does it constitute an offer or solicitation to buy or sell any securities referred to. Individual circumstances and current events are critical to sound investment planning; anyone wishing to act on this information should consult with a financial advisor. The article may contain “forward-looking statements” within the meaning of applicable securities legislation. Forward-looking statements are based on the opinions and assumptions of the Company’s management as of the date made. They are inherently susceptible to uncertainty and other factors that could cause actual events/results to differ materially from these forward-looking statements. Additional risks and uncertainties, including those that the Company does not know about now or that it currently deems immaterial, may also adversely affect the Company’s business or any investment therein. Any projections given are principally intended for use as objectives and are not intended, and should not be taken, as assurances that the projected results will be obtained by the Company. The assumptions used may not prove to be accurate and a potential decline in the Company’s financial condition or results of operations may negatively impact the value of its securities. Please read eResearch’s full disclaimer.
