Lucid SPAC: Everything you need to know about Lucid

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.

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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.

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