Electric vehicle startup Lucid Motors is now a publicly traded company, after completing a merger that raised an astonishing $4.5 billion in fresh capital. Shares of the California-based Saudi-owned startup began trading on the Nasdaq stock exchange on Monday morning.
lucid motors will now refocus its full attention on an even more important task: getting its first electric car on the road, where it will face stiff competition in the luxury market from tesla, mercedes-benz and others. The startup has said it plans to start delivering its extremely powerful yet serenely luxurious air sedan later this year, and has already built more than 100 near-final-quality versions at its new factory in Arizona. he’s also working on an electric off-roader called gravity.
Reading: Is lucid motors going public
The public listing is the second in the last week for the industry; Fellow EV’s startup Faraday Future became a public company listed on the Nasdaq last Thursday, raising $1 billion in the process. The two new companies are just the latest in a growing line of publicly traded electric vehicle startups, autonomous vehicle companies and car suppliers to merge with so-called special purpose acquisition companies, or spacs, which are utility vehicles. investment listed on the stock exchange.
however, unlike a lot of those other startups, lucid motors has been around for a while. was founded in 2007 as a battery company called Atieva. But in 2016 he set out to build his own all-electric sedan and hired Peter Rawlinson, the former chief engineer of the model program at Tesla, to lead the project. (Rawlinson would later become CEO.)
Lucid Motors originally hoped to put the Air into production in 2018, but ran into the same problem that almost ended the journey for many of its peers: It didn’t have enough money. the startup had raised hundreds of millions of dollars by that point, but needed billions, in part because it was also trying to build a factory to build the sedan.
However, it was much harder to get funding for EV startups in 2016 and 2017, especially as some of them, like faraday’s future, began to crash in remarkably public ways. Making matters worse for Lucid Motors was the fact that Faraday’s future founder, Jia Yueting, ended up owning about 30 percent of his rival’s shares. Jia’s property became a major issue for potential investors due to his reluctance to sell, as Recode and The Verge have reported.
Talks with investors and even automakers like Ford ultimately fell through, and Lucid Motors borrowed from a Chinese hedge fund and bus company to keep the lights on, using its intellectual property as collateral.
lucid motors then found a savior in saudi arabia’s sovereign wealth fund in 2018. the two sides announced a billion dollar deal in september of that year, just weeks before crown prince mohammed bin salman had Washington Post journalist Jamal Khashoggi brutally murdered. . That cash injection, plus the fund’s subsequent investments, has given Saudi Arabia majority ownership of Lucid Motors. (It was also a major player in the funding round that went along with the spac merger, which is one of the reasons Lucid Motors raised so much money in this transaction.)
saudi arabia proved to have pockets deep enough to help lucid motors finance its extremely expensive ambitions, while eventually buying out jia’s stake, documents filed with the securities and exchange commission (sec) show. In exchange, he gained control of a startup that helps him paint Bin Salman’s fantastic picture of making Saudi Arabia a futuristic and much less oil-dependent nation, while also making a ton of money in the process. /p>
lucid motors began thinking about merging with a spac to raise money in late 2020 and hired citi to help with the process. however, how the startup came together with its eventual space partner remains a matter of debate. In January 2021, Bloomberg reported that Lucid Motors was in talks with a SPAC run by financier Michael Klein, who used to work for Citi and has ties to Saudi Arabia. But in SEC filings, Lucid Motors and Churchill Capital IV (The SPAC) say they had no conversation before that article was published. in fact, they say that article was what brought the two parties together.
The proposed merger was announced in February and in the months that followed it became one of the most highly-traded spaces before the deal closed. But the merger was halted at the last minute when, on July 22, Lucid Motors and SPAC had to publicly plead with shareholders to vote on a key term of the deal that had not yet received enough votes. the reason? many of those shareholders were new to the market and didn’t know about voting, or if they did, there was a chance that the voting information had been spammed. lucid motors and spac were a day late and finally got enough votes.