In order to beat Tesla, the start-up needs to follow in its rival's footsteps.
If you've been following the stock market, you'll know that alternative fuel is king right now. Tesla is on its way back up to the moon after the share split late last year, and the Chinese EV company NIO is still rising, buoyed by the reveal of its first sedan. Hydrogen companies like Plug Power and FuelCell Energy are growing fast as they make new deals, so this is the perfect time for a new automaker on the verge of releasing its first electric vehicle to go public, and Lucid Motors is poised to take advantage. Bloomberg is reporting a Lucid Motors is in talks with one Special Purpose Acquisition Companie (SPAC) headed by Michael Klein, a reputed financial rainmaker, about a deal worth up to $15 billion.
Automakers that have made deals with a SPAC, also known as a "blank check company," include Faraday Future, Nikola Corp., and Fisker Inc. SPACs exist solely to raise capital through an IPO in order to merge with private companies, enabling those companies to acquire liquidity using the public market. It's an alternative to a traditional IPO, and worth noting that they have a poor record of delivering returns. It's akin to investors gambling with unproven businesses, but when one hooks up with the right company, the results can be spectacular.
Lucid is already backed by Saudi Arabia's sovereign wealth fund and is working with financial advisors to try and work a deal with Klein's Churchill Capital Corp IV.
Many will remember how Nikola Corp. almost immediately tanked and has been out of the news cycle since going public. Unlike Nikola, however, Lucid has a product and a fully-tooled factory in Arizona. The Lucid Air is set to begin deliveries in the spring of this year, and we already see adverts for the luxury sedan on TV. The first model released will be the limited Air Dream Edition model costing $169,000, but once everything is up and running and the full lineup is available, the base Pure will be available starting at $74,400 ($69,900 after USA federal tax credit) in 2022.