How much is Lucid Motors worth? Tesla rival enters $24B deal with Churchill Capital ahead of first EV launch
The merger with Churchill Capital is one of the biggest deals in the EV industry to date as the company prepares to roll out its first EV — a luxury sedan called Air
Lucid Motors, the San Fransico-based electric car manufacturer, is set to go public after a massive deal with Churchill Capital. The Tesla rival announced it was merging with the blank-check company run by financier Michael Klein. The combined special-purpose acquisition company (SPAC) has a Pro-forma equity value of $24 billion, which represents a huge step up for the 14-year-old company.
The deal will reportedly generate $4.4 billion in cash for the EV maker, which the company will use to expand its factory in Arizona. The deal also represents the largest injection of capital into the company since Saudi's Public Investment Fund invested over $1 billion back in 2018.
The SPAC has a transaction equity value of $11.8 billion and is valued at $15 for each share, which translates to a 50% premium of Churchill's net asset value. The transition is expected to close in the second quarter of the year.
Ramping up production
Lucid will use the money to roll out its first EV — a luxury sedan called Air. The $169,000 car will be manufactured at Lucid's Casa Grande facility in Arizona, which has a capacity of 34,000 units annually. With the injection, Lucid hopes to bump that up to 85,000 by 2023. Earlier, the company announced it would start deliveries in the second quarter, but has since not committed to a specific date due to talks with Churchill Capital.
Apart from production, CEO Peter Rawlinson said that the money will be used to invest in new products and headcounts. The company hopes to grow to 5,000 employees by next year from the existing 1,400. New products include energy storage systems and technology such as battery packs and software, both of which are being tested in-house as per the investor's presentation on the company website.
Lucid's debut vehicle is seen as the biggest challenge to Tesla to date, competing with the high-end Model S Plaid+. If successful, it would allow Lucid to generate $9.9 billion in revenue by 2024, allowing the company to shift to other high-end vehicles. Like Telsa, Lucid aims for high-margin low volume vehicles first to establish itself, before moving into high-volume sales.
While Lucid is valued at just a fraction of Tesla and Rawlison said that the two companies have very different target markets, the similarities are hard to ignore. It is very likely that the two companies will engage in a heated battle over the coming months.
Who Owns Lucid?
Founded in 2007 as Atieva Inc by Sam Weng and Bernard Tse, Lucid has remained a relatively larger force in the EV world to date. Early investors include China's Environmental Fund and Silicon Valley-based VC firm Venrock. In 2018, Saudi's Public Investment Fund invested over $1 billion. While Weng has since left the company, handing over the CEO role to Rawlinson, Tse still serves on Lucid's board.
CEO and CTO: Peter Rawlinson
The British engineer is a veteran of the automobile industry. Having worked at Jaguar, Lotus and Corus, he joined Tesla in 2009. There, he served as Vice President and Chief Engineer of the Model S, before leaving the company in 2012. In 2013, he joined Lucid as its CTO before taking over as the CEO in 2019.
VP of Design: Derek Jenkins
The American designer is best known for his work on Audi's A8. He is also known for being the Director of Design at Mazda's North America operations, and his role at Volkswagen. Amongst the many iconic vehicles, he has created are the 2016 Mazda MX-5 Miata, Mazda3, Volkswagen Concept T, Volkswagen Ragster and the Audi A2. With over two decades of experience, he joined Lucid in 2015.
VP Hardware Engineering: Eric Bach
Bach is an automobile industry veteran with 18 years of experience in hardware. At Volkswagen, he oversaw the product planning for compact vehicles like the Tiguan and Touran. This was followed by a three-year stint at Tesla, where he worked on the engineering for the Model S, Model X and Model 3. In 2015, he made the jump to Lucid as director of body engineering.
There's no word yet on when exactly Lucid will go public, but it is expected to be after the transition is complete in Q2 2021.