Lucid Motors, an electric car startup led by the chief engineer for Tesla’s Model S sedan, is going public by merging with Churchill Capital IV, a New York Stock Exchange-listed special purpose acquisition corporation, in a deal worth an estimated $24 billion.
The development–which Lucid CEO Peter Rawlinson recently told Forbes was a possible fundraising option–comes just weeks before the release of the Lucid Air, a premium electric sedan initially priced at $169,000 that will be built at the company’s new Casa Grande, Arizona, factory. The deal includes about $2.1 billion of cash from Churchill Capital and $2.5 billion from a private share placement with investors including Saudi Arabia’s Public Investment Fund, BlackRock, Fidelity, Franklin Templeton, Neuberger Berman, Wellington Management and Winslow Capital Management.
“Lucid is going public to accelerate into the next phase of our growth” following the launch of the Air, Rawlinson, who is also the Newark, California-based company’s CTO and a cofounder, said in a statement. Funds will help launch Lucid’s second model, the Gravity SUV, in 2023 and “also be used to support expansion of our manufacturing facility in Arizona, which is the first greenfield, purpose-built EV manufacturing facility in North America, and is already operational for pre-production builds of the Lucid Air.”
The transaction’s estimated $24 billion value is based on an expected PIPE offering price of $15 per share and is the largest such SPAC deal to date, Churchill Capital said in a statement.
The funding move positions Lucid to quickly ramp up operations in the fast-developing electric vehicle market, which has been dominated by Elon Musk’s Tesla for a decade. Unlike many EV startups, however, Rawlinson and his engineering team have been refining the Air for years and have extensive experience bringing battery-powered autos to market. The company’s Arizona plant will gain sufficient funds from the SPAC merger to eventually be able to build 365,000 vehicles annually as the company adds models in the mid-$40,000-price range within three to five years.
The company’s “superior and proven technology backed by clear demand for a sustainable EV make Lucid a highly attractive investment for Churchill Capital Corp IV shareholders, many of whom have an increased focus on sustainability,” CCIV CEO and chairman Michael Klein said in a statement. We are pleased to partner with Peter and the rest of Lucid’s leadership team as it delivers the highly anticipated Lucid Air to market later this year, promising significant disruption to the EV market and creating thousands of jobs across the U.S.”
(For more on Lucid and Peter Rawlinson, see Elon Musk’s Ex-Chief Engineer Creates A New Car—And Says It Beats Tesla)
The “Dream” edition of the Air arriving this spring will likely surpass the current top-of-the range Model S with an industry-leading 517 miles per charge, faster recharging and ability to go from 0 mph to 60 mph in just over 2 seconds. Rawlinson also says the car will have the most efficient battery pack and electric motor on the market.
Saudi Arabia’s PIF is Lucid’s biggest investor, pouring $1.3 billion into the Silicon Valley-based company in 2018 that helped get the first phase of the Arizona plant built. Rawlison has said the company, which has about 2,000 employees currently, is also in talks to build the first auto plant in Saudi Arabia to makes its electric sedans and crossovers.
Shares of CCIV rose 8.4% to close at $57.37 in New York on Monday.