The year 2020 was massively occupied by SPACs, so much so that it hit a record for the highest number of SPAC deals in a year. The trend seems to be continuing in 2021. The American luxury electric car maker, Lucid Motors, is said to be in talks to go public through a merger with a Michael Klein-backed SPAC, Churchill Capital IV.
While the representatives for Lucid Motors and Klein refused to comment, people familiar with the matter said that the transaction could be valued at $15 billion. Following the news, shares of Churchill Capital IV rocketed 40%, closing up at $13.2.
Michael Klein’s SPACs
Churchill Capital IV is backed by Michael Klein, a former Citigroup banker and Wall Street veteran. Churchill Capital IV is the fourth SPAC by Klein. The notable dealmaker has two SPACs looking for potential private companies to merge with. One of them is Churchill Capital IV which is now considering merging with Lucid Motors. Last October, another shell company formed by Klein, Churchill Capital III, partnered with MultiPlan, a medical company, to raise more than a whopping $3.6 billion.
Churchill Capital IV
Unlike most SPACs that have a specific industry in focus, Churchill Capital IV only looks for companies with sustainable growth potential and attractive competitive dynamics. It went public in July 2020. The blank-check company raised $1.8 billion by selling 180 million units at $10 each. Previously, the SPAC was in discussion with the direct broadcast satellite, DIRECTV. However, it seems that the talks have stopped.
What’s more, is that Klein plays a key role in Saudi Arabia’s investments. He serves as an adviser for the kingdom’s Public Investment Fund – the same fund that also backs Lucid Motors and has invested more than $1 billion in the company. He has also advised Saudi Aramco on the history’s then-largest initial public offering.
On the other hand, Lucid Motors seems to be joining the list of electric vehicle makers going public through SPACs. Numerous EV makers seem to take this route to raise cash to compete with the car giant, Tesla.
Lucid Motors was founded in 2007 and is currently headed by Peter Rawlinson, former chief engineer for Tesla’s Model S sedan. The car manufacturer was known as Atieva back in 2007 and initially worked on battery technology instead of developing luxurious cars.
Lucid Motors’ Air EV
The name changed to Lucid in 2016 when the company began working on its main model, Air. Lucid claims that the Air EV has over 1,000 horsepower and can go more than 500 miles on a single charge. On the other hand, the maximum range of Tesla’s Model S is only 402 miles.
The Air will be produced at Lucid’s first manufacturing facility in Casa Grande Arizona which is currently under construction. The initial capacity of the plant is projected to be 30,000 vehicles with a phased expansion planned for around 400,000 units.
Air Dream Edition will be the first model introduced at the price of $161,500 while the base model Air Pure will be listed at $69,900. Lucid aims to offer cheaper versions of the car from 2022 while planning to build an electric SUV. Deliveries of $169,000 electric sedans to the U.S market are planned for the second quarter.