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Lucid Motors goes public, collects $4.5 billion

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Electrical automobile startup Lucid Motors is now a publicly traded company, following the completion of a merger the place it fetched an eye-watering $4.5 billion in recent capital. Shares of the Saudi-owned, California-based startup started buying and selling on the Nasdaq inventory trade Monday morning.

Lucid Motors will now flip its full consideration again to an excellent taller job: getting its first electrical automotive on the highway, the place it is going to face stiff competitors within the luxurious market from Tesla, Mercedes-Benz, and others. The startup has mentioned that it plans to begin delivering its extremely powerful but serenely luxurious Air sedan later this yr, and it has already constructed greater than 100 near-final high quality variations at its new manufacturing unit in Arizona. It has an electrical SUV referred to as Gravity within the works, too.

The general public itemizing is the second within the final week for the business; fellow EV startup Faraday Future became a public company listed on the Nasdaq final Thursday and raised $1 billion within the course of. The 2 startups are simply the most recent in a rising line of EV startups, autonomous automobile firms, and automotive suppliers to go public by merging with so-called particular goal acquisition firms, or SPACs, that are publicly listed funding autos.

In contrast to a lot of these different startups, although, Lucid Motors has been round for some time. It was based in 2007 as a battery firm referred to as Atieva. However in 2016 it got down to construct an all-electric sedan of its personal, and tapped Peter Rawlinson — the previous lead engineer of the Mannequin S program at Tesla — to go up the venture. (Rawlinson would later change into CEO.)

Lucid Motors initially hoped to place the Air into manufacturing as early as 2018. However it bumped into the identical drawback that just about ended the journey for a lot of of its friends: it didn’t have the funds for. The startup had raised a whole bunch of thousands and thousands of {dollars} to that time however wanted billions, partially as a result of it was additionally making an attempt to construct a manufacturing unit to construct the sedan.

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Funding for electrical automobile startups was a lot more durable to return by in 2016 and 2017, although, particularly as a few of them — like Faraday Future — began collapsing in remarkably public vogue. Making issues worse for Lucid Motors was the truth that Faraday Future founder Jia Yueting wound up proudly owning some 30 p.c of his rival’s shares. Jia’s possession grew to become a serious drawback for potential buyers due to his reluctance to promote, as Recode and The Verge have reported.

Talks with buyers and even automakers like Ford ultimately fell aside, and Lucid Motors took loans from a hedge fund and a Chinese bus company to keep the lights on, utilizing its mental property as collateral.

Lucid Motors then discovered a savior in Saudi Arabia’s sovereign wealth fund in 2018. The 2 sides introduced a $1 billion deal in September of that yr, only a few weeks earlier than Crown Prince Mohammed bin Salman had Washington Post journalist Jamal Khashoggi brutally murdered. That injection of money, plus subsequent investments from the fund, have given Saudi Arabia majority possession of Lucid Motors. (It was additionally a serious participant within the funding spherical that passed off alongside the SPAC merger, which is one motive for a way Lucid Motors raised a lot cash on this transaction.)

Saudi Arabia proved to have deep sufficient pockets to assist Lucid Motors fund its extraordinarily costly ambitions, whereas additionally lastly shopping for out Jia’s stake, as filings with the Securities and Change Fee (SEC) present. In trade, it obtained management of a startup that helps it paint bin Salman’s implausible image of creating Saudi Arabia a futuristic and much much less oil-dependent nation — whereas additionally making a boatload of money in the process.

Lucid Motors began taking a look at merging with a SPAC to lift cash in late 2020 and employed Citi to assist with the method. How the startup got here along with its eventual SPAC associate continues to be a matter of some debate, although. In January 2021, Bloomberg reported that Lucid Motors was in talks with a SPAC run by financier Michael Klein, who used to work for Citi and has ties to Saudi Arabia. However in filings with the SEC, Lucid Motors and Churchill Capital IV (the SPAC) say that that they had not held any talks earlier than that article was printed. Actually, they are saying that article was what introduced the 2 sides collectively.

The proposed merger was announced in February and within the months since grew to become one of many most-traded SPACs in anticipation of the deal closing. However the merger was held up on the final minute when, on July 22nd, Lucid Motors and the SPAC needed to publicly plead with shareholders to vote for a key time period of the deal that hadn’t but acquired sufficient votes. The explanation? Lots of these shareholders had been new to the market and didn’t know in regards to the vote, or in the event that they did, there was an opportunity that the information about the vote had gone to spam. Lucid Motors and the SPAC delayed for a day, and ultimately acquired sufficient votes.

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