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American luxury electric vehicle (EV) maker Lucid Motors has agreed to go public by merging with blank-cheque firm Churchill Capital IV Corp (CCIV) in a deal that valued the combined company at $11.75bn.
Lucid, run by former Tesla engineer Peter Rawlinson, is the latest firm to tap the initial public offering market, with investors rushing into the EV sector, spurred by the rise of Tesla Inc and the toughening of emissions regulations in Europe and elsewhere.
Other prominent players in the sector went public through mergers with so-called special purpose acquisition companies (SPACs) last year. SPACs are publicly listed shell companies set up to buy private companies. Those private firms effectively become publicly traded without having to go through a traditional initial public offering.
While some deals such as those involving electric carmaker Fisker have delivered solid returns for investors, others such as Nikola, a maker of electric pick-up trucks, have given up short-term gains.
The publicly traded shares of CCIV fell nearly a third to $40.35 in volatile extended trading, giving the merged company a market capitalization of about $64bn. By comparison, General Motors Co is worth about $76bn.
California-based Lucid said it is on track to start production and deliveries of the Lucid Air, its first luxury sedan, in North America in the second half of this year. It had previously said it planned to start its deliveries in the spring of 2021.
Lucid, which plans to build vehicles at its factory in Arizona, aims to deliver 20,000 units in 2022 and 251,000 in 2026 by adding other models such as an electric sport utility vehicle.
With a starting price of $77,400, the sedan is slated to be the first to achieve a 500-mile (805km) driving range. Lucid’s debut vehicle will be the closest car TO challenge Tesla in the still-niche market for premium EV sedans.