- Lucid Motors is now trading on Wall Street after completing its SPAC merger.
- Under the ticker LCID, the stock jumped about 10% in its first hours of trading.
- The company expects to deliver its first electric vehicle, the Lucid Air, in the second half of this year.
Lucid Motors began trading Monday on Wall Street after completing its SPAC merger. Under the ticker symbol LCID, the stock jumped about 10% to more than $26.
The merger with Churchill Capital Corp IV — a special purpose acquisition company created by longtime investment banker Michael Klein — was officially announced in February and shares of the blank-check company immediately lost about half their value. On speculation in the weeks leading up to the Lucid deal, Churchill Capital Corp IV had surged some 400% to an all-time high of $64.86.
The equity value of the deal paid existing company shareholders $11.75 billion. It also generated over $4 billion in cash for expansion plans, including Lucid's current factory in Arizona.
The funding puts Lucid "in a very enviable position" compared with rival Tesla, which secured about $226 million in its 2010 initial public offering, Lucid CEO Peter Rawlinson said Monday on "Squawk Box." The ex-Tesla engineering executive said the merger secures Lucid's financial runway through the end of 2022.
"We do have a very illustrious roster of blue-chip institutional investors but we've attracted so much interest from the retail sector as well," Rawlinson said. "It's a testament to the appeal of our product and our technology that we've enjoyed that position."
The reverse merger was approved in an extended vote by more than 99% of company shareholders, Klein said in a conference call Thursday.
The deal, which valued Lucid at an initial pro forma valuation of $24 billion, was the largest among similar transactions involving EV companies and blank-check firms. Previous SPAC deals with EV start-ups such as Nikola, Fisker and Lordstown Motors earned valuations of less than $4 billion.
Lucid had some difficulty attracting capital until September 2018. That's when Saudi Arabia's sovereign wealth jumped in with funding. With an ownership stake of more than 60% in Lucid, the kingdom's Public Investment Fund stands to make a nearly $20 billion profit on an investment of $2.9 billion, according to The Wall Street.
California-based Lucid expects to deliver its new electric vehicle, the Lucid Air, in the second half of this year after delays largely due to the Covid pandemic. Rawlinson previously told CNBC he expects the Air to pave the way for a lineup of future all-electric vehicles, including an SUV, starting production in early 2023, and more affordable vehicles down the line.
The company said Monday it has 11,000 paid reservations for Lucid Air models.
"We're accelerating our factory to accommodate increased volume. We've just started grading the site for a 2.7 million square foot expansion," Rawlinson said, adding that the merger enables "strategic, judicial growth to expand our manufacturing capability and to mitigate risk as a company."
As Tesla opens up its charging network to other brands, Rawlinson said it would be a "good solution" for different EVs to work on each other's networks.
While the company is launching its Dream model at $169,000, Rawlinson said it hopes to make its other Air models more affordable in the near future. The Air starts at $69,000 after the federal tax credit.
"I believe that product defines brands, not the other way around," said Rawlinson, who joined Lucid as chief technology officer in 2013 and then CEO three years later. "We need this transition towards sustainable mobility, and that's what our advanced technology can offer."