Lucid SPAC: Everything you need to know about Lucid
Ben Lobel July 27, 2021 12:10 AM
Can Lucid enjoy the share price fireworks that have lit up EV rival Tesla? Discover more about the company's history, strategy and valuation following the Lucid SPAC.
What is Lucid?
Lucid is a US-based automobile company with a focus on electric cars. Based in Newark, California, it first focused on battery packs for Chinese vehicles before developing its first car, the Lucid Air, in 2020.
As of February 2021 the pre-revenue company has raised well in excess of $1 billion in funding, fully developed its first model, finished building its Arizona-based greenfield site factory, and employs some 2,000 personnel.
How does Lucid make money?
When Lucid begins production of its Air model, the company will make money through automobile sales. As of February 2021, the company has received more than 7,500 pre-orders totalling some $650 million in reservations.
Is Lucid profitable?
Lucid is not a profitable company as of February 2021, as while its first model is developed and pre-orders have come in, production is yet to start. The company has projections for profitability by the year 2024, but in the meantime will be outlaying large sums as it begins manufacture and delivery of the Air in North America in the second half of 2021. Lucid’s factory, completed in December 2020, cost $700 million to build.
Who are Lucid’s competitors?
Common sense might suggest that Lucid’s main competitor is electric vehicle peer Tesla, but Lucid CEO Peter Rawlinson has instead suggested that the Lucid Air will primarily be going after the fellow luxury sedan Mercedes S-class, which was revealed within one month of the Air.
Rawlinson believes that the newcomer can compete with the established German model due to his perceived inadequacy of more well-known carmakers’ response to the EV revolution, as well as the inefficiencies of more-established manufacturers. To the latter point, Rawlinson claims that the Lucid Air travels four-and-a-half miles per kilowatt hours or kWh (kWh being the standard measure of efficiency for plug-in vehicles), a mark that significantly outperforms traditional players’ electric offerings.
While Lucid’s attitude towards Tesla seems relaxed, the latter’s founder Elon Musk has appeared more sensitive to a potential rivalry, responding to the news that the Lucid Air’s pricing would start at $77,400 by cutting the price of his own Tesla Model S by $3,000 in October 2020.
What is Lucid’s strategy?
Lucid’s strategy is currently focused on rolling out the Air model, which some view as the equivalent to Tesla’s Model S. The Air, production of which will begin in spring 2021, will boast horsepower of up to 1,080, a 20-minute charge, 0-60mph in 2.5 seconds and a top speed of 168 mph.
The Air Pure, the base model, will see prices start at $69,900, similar to the Tesla Model S, while the Air Touring will be offered at $87,500. Finally, the Air Grand Touring will go on sale for prices starting at $131,500.
While the immediate focus is the Air Pure, the company has longer-term plans to expand into aerospace and agriculture.
Who are the directors of Lucid?
Lucid was founded by former Tesla VP Bernard Tse and former Oracle executive Sam Weng in 2007 under the name Atieva Inc, although Weng is no longer involved with the business in an official capacity. The original iteration of the company was focused on developing EV batteries rather than the vehicles themselves.
Today, there are a number of prominent board members and advisors, including Turqi Alnowaiser, head of the international investment strategy of the Saudi Arabian Public Investment Fund, which holds a majority stake in Lucid.
Here are some of the key personnel at the company.
- CEO and CTO: Peter Rawlinson
- Chairman: Andrew Liveris
- Vice President of Finance: Michael Smuts
- Vice President of Design: Derek Jenkins
- Vice President of People: Michael Carter
When was the Lucid SPAC?
Lucid’s flotation, which took place on July 26, 2021, took the form of a merger with a SPAC, or Special Purpose Acquisition Company, entitled Churchill Capital IV Corp (CCIV).
The transaction involved CCIV contributing $2.1 billion in cash, as well as a new round of funding from various other parties including BlackRock and yet more cash from the Saudi Public Investment Fund. The merger gave the combined company a pro-forma equity value of $24 billion.
Take a look at some of the other top IPOs for 2021.
How much is Lucid worth?
The merger with CCIV valued Lucid at $24 billion, but the implied market value of Lucid and CCIV combined is more than double that.
The price was seemingly influenced in part by the market hype surrounding EV companies in the wake of the Tesla bull run but, that said, there is no denying that Lucid is at a relatively advanced point.
The company boasts impressive technology and a highly-qualified management team, as well as been in the position of having developed its first model, not to mention established its factory and product pipeline. The company has also outlined ambitions to expand beyond the EV sector in future.
How to trade Lucid shares
You can trade Lucid through Churchill Capital Corp (CCIX) shares on City Index. Find out more about trading shares on our award-winning platform.
This report is intended for general circulation only. It should not be construed as a recommendation, or an offer (or solicitation of an offer) to buy or sell any financial products. The information provided does not take into account your specific investment objectives, financial situation or particular needs. Before you act on any recommendation that may be contained in this report, independent advice ought to be sought from a financial adviser regarding the suitability of the investment product, taking into account your specific investment objectives, financial situation or particular needs.
StoneX Financial Pte. Ltd., may distribute reports produced by its respective foreign entities or affiliates within the StoneX group of companies or third parties pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the report is distributed to a person in Singapore who is not an accredited investor, expert investor or an institutional investor (as defined in the Securities Futures Act), StoneX Financial Pte. Ltd. accepts legal responsibility to such persons for the contents of the report only to the extent required by law. Singapore recipients should contact StoneX Financial Pte. Ltd. at 6826 9988 for matters arising from, or in connection with the report.
In the case of all other recipients of this report, to the extent permitted by applicable laws and regulations neither StoneX Financial Pte. Ltd. nor its associated companies will be responsible or liable for any loss or damage incurred arising out of, or in connection with, any use of the information contained in this report and all such liability is hereby expressly disclaimed. No representation or warranty is made, express or implied, that the content of this report is complete or accurate.
StoneX Financial Pte. Ltd. is not under any obligation to update this report.
Trading CFDs and FX on margin carries a high level of risk that may not be suitable for some investors. Consider your investment objectives, level of experience, financial resources, risk appetite and other relevant circumstances carefully. The possibility exists that you could lose some or all of your investments, including your initial deposits. If in doubt, please seek independent expert advice. Visit cityindex.com.sg for the complete Risk Disclosure Statement.