Electric vehicle startup raises $4 billion in SPAC offering to compete against Tesla

Luxury electric vehicle startup Lucid Motors went public after a merger with “blank-check” firm Churchill Capital Corp IV, in the largest deal yet between a SPAC and an electric car company.

The deal left the company with a market capitalization of $9.17 billion, as of this writing, and will give more than $4 billion in cash to Lucid Motors. The transaction will be used to expand Lucid’s Arizona factory, the company said, which it eventually expects to be capable of producing 365,000 vehicles a year.

Lucid is trying to compete directly with Tesla. Peter Rawlinson, the CEO of Lucid, helped develop the Model S sedan while working at Tesla from 2009 to 2012. Tesla, the most valuable automaker in the world by market capitalization, sells the Model S, an electric luxury sedan that starts at $73,990, with long-range variants also having a range of just over 500 miles.

CCIV is a special purpose acquisition company, or SPAC, which is a shell corporation that has the sole purpose of buying or merging with a private company in order to take it public without a traditional initial public offering. Many companies have chosen to go public over the past year through SPACs instead of traditional IPOs, which typically invite more scrutiny from both investors and regulators.

Lucid’s merger has been widely anticipated, driving up the price of CCIV shares more than 470% since the start of 2021. After the deal was announced, CCIV’s share price tumbled more than 40%.

Lucid is the latest electric automaker to go public through a SPAC merger.

EV start-ups Arrival, Nikola and Fisker have all taken advantage of investors’ seemingly never-ending appetite for SPACs.

SPACs raised $76 billion last year, a sixfold increase from 2019.

“A few years ago, SPACs were a relatively sleepy corner of the marketplace. That’s not the case anymore,” said David Gallers, co-founder and managing partner of Wealthspring, a firm that invests in SPACs. “Billion dollar unicorns are now embracing it.”

With reporting by Charles Riley

Correction: An earlier version of this story misidentified the company’s market capitalization.