EV company Lucid Air might go public through merger with CCIV

Could we soon see yet another EV company going public via a SPAC deal? According to Reuters, a new deal between Michael Klein-backed SPAC Churchill Capital IV and EV company Lucid Air could be announced before the end of the month.

Key takeaways

  • Churchill Capital Corp IV is reportedly in talks with EV company Lucid Motors to take them public through a SPAC-merger deal.
  • The SPAC share price jumped 300% since the announcement of the deal by Bloomberg on January 11th.
  • The news was once again supported by a new Reuters report, suggesting that the deal might value the company at $12 billion and that there could be an official merger announcement as early as this month.
  • If the deal does happen, Lucid Motors will join the over-130 list of companies that are going public via SPAC in 2021.

 

The Lucid Air, an all-electric luxury Sedan (Source: Electrek)

The Lucid Air, an all-electric luxury Sedan (Source: Electrek)

Talks between the SPAC and the EV manufacturer

Shares of Churchill Capital IV have been steadily rising over the past month, since Bloomberg published a report stating that the special purpose acquisition company (SPAC) was planning a merger with the luxury electric vehicle manufacturer Lucid Motors.

“A consortium led by Venrock Associates proposed to sell Lucid Motors Inc to Churchill Capital Corp IV. The transaction was proposed on 01/11/2021. Financial terms of the transaction are unknown.”

Venrock Associates is a venture capital firm that has been invested in Lucid Motors since 2009, back when the company was still called Atieva.

Both companies declined to comment on the news.

 

A 300% surge in the stock price following Reuters report

The stock price of Churchill Capital IV was up 300% since the announcement in the Bloomberg report, and with a 33% surge on Tuesday, following a Reuters report suggesting that the two entities agreed on the key terms of the deal, with a public valuation of $12 billion.

 

The price of Churchill Capital IV is up 300% since January 11th 2021 (Source: TradingView)

The price of Churchill Capital IV is up 300% since January 11th 2021 (Source: TradingView)

 

Churchill Capital IV would raise an additional amount of $1-1.5 billion for the transaction by selling shares in a PIPE, adding to the $2 billion they already raised from its IPO in July.

Investors ought to know that there is not a definitive agreement yet between Churchill Capital IV and Lucid. If the merger does happen at the $12 billion valuation expected by Reuters, the Churchill Capital IV is already trading at a fairly high price, which increases the risk.  Although that your investment in the SPAC could offer good returns, there remains the risk that the stock is already over-valued or that the SPAC deal is not fulfilled.

About Lucid Air Motors

Lucid Air Motors was founded by former Tesla executive Bernard Tse and entrepreneur Sam Weng.

The company’s focus used to be battery technologies, and it then started to work on the design and production of its own EV, the Lucid Air luxury electric Sedan.

 

The Lucid Air Model (source: Lucid Air Motors)

The Lucid Air Model (source: Lucid Air Motors)

Some investors have a strong confidence in the model, which could potentially be a serious competitor to Tesla’s Model S, priced at $69,000. Lucid’s first EV, the Lucid air, should come at a base price of $77,400 and a 517 miles range. According to Lucid, they should eventually produce around 400,000 units annually, thanks to their U.S. assembly plant in Casa Grande, Arizona, boosted with a $1 billion investment from Saudi Arabia’s Public Investment Fund. Last year, Tesla produced a little over 57,000 model S cars.

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