(Reuters) – Lucid Motors, a luxury electric vehicle maker, on Monday agreed to go public by merging with Churchill Capital IV Corp in a $ 11.75 billion deal.
Lucid, led by a former Tesla engineer, is the latest venture to take advantage of the initial public offering market, with investors entering the EV sector, spurred by the rise of Tesla Inc. and the tightening of emissions regulations in Europe and elsewhere.
Other leading role players in the sector were introduced last year through mergers with so-called special procurement companies (SPACs). While some transactions like Fisker performed well, others like Nikola gave up short-term gains.
CCIV’s publicly traded shares fell nearly a third to $ 40.35 in volatile extended trading, giving the merged company a market capitalization of about $ 64 billion. By comparison, General Motors Co. is worth about $ 76 billion.
Lucid said it is on track to begin production and delivery with North America in the second half of this year with Lucid Air, its first luxury sedan. He said earlier that he plans to start delivery in the spring of 2021.
Lucid, which plans to build vehicles at its Arizona plant, plans to deliver 20,000 vehicles in 2022 and 251,000 in 2026 by adding other models such as an electric sports utility vehicle.
With a starting price of $ 77,400, the sedan is the first to reach a driving distance of 805 km.
After Lucid praised his sedan, Tesla chief Elon Musk announced a price reduction to his flagship Model S sedan. “The glove has been dropped!” he tweeted.
CCIV, backed by Wall Street trader and former Citigroup banker Michael Klein, and new private investors get shares at different prices, while newer private investors pay a premium.
The agreement with CCIV includes a $ 2.5 billion private investment from Saudi Arabia’s Public Investment Fund, funds managed by BlackRock and others.
(Reporting by Niket Nishant, Shariq Khan and Sohini Podder in Bengaluru and Greg Roumeliotis in New York; Additional reporting by Hyunjoo Jin in San Francisco; Written by Subrat Patnaik; Edited by Stephen Coates)