The electrical automobile firm Lucid Motors goes public in a clean test merger value $ 11.eight billion

The Lucid Air sedan, which is slated to go into production at a facility in Arizona next year.

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Electric vehicle company Lucid Motors plans to enter through a reverse merger with a blank check company founded by veteran investment banker Michael Klein with a combined equity value of $ 11.75 billion and a pro forma equity value of $ 24 billion to go the stock market.

The deal between Lucid of Newark, California, and Churchill Capital Corp IV is the largest in a series of such collaborations between EV companies and blank check companies, also known as Special Purpose Acquisition Companies or SPACs.

Previous SPAC deals with EV startups like Nikola, Fisker, and Lordstown Motors achieved pro forma valuations of less than $ 4 billion, but Lucid is further ahead than these companies. Lucid will deliver its first vehicle this spring – a luxury sedan named Air.

The deal will generate approximately $ 4.4 billion in cash for expansion plans for Lucid, including the current Arizona factory.

CCIV stocks fell roughly 30% to $ 40 in expanded trading.

Lucid is led by ex-Tesla engineering manager and automotive veteran Peter Rawlinson, who joined the company as Chief Technology Officer in 2013 before adding CEO to his duties in April 2019. He will continue these functions after the expected closing of the EU deal in the second quarter, according to the company.

Lucid was founded in 2007 as Atieva, a name it now uses for its technical and engineering division that supplies batteries for the Formula E electric circuit. The company initially focused on electric battery technology before changing its name to an electric vehicle manufacturer in 2016, three years after Rawlinson joined the company to lead technology development.

Lucid struggled with some difficulty raising capital to fund his plans until he received $ 1 billion from the Saudi Arabian sovereign wealth fund in September 2018.

Rawlinson described SPAC deals last year as easy money but not enough capital to get a vehicle into production, which has led companies like Fisker to look for contract manufacturers.

Prior to the announcement at Klein’s company, Rawlinson said the company had the funds to begin producing the air at a facility in Casa Grande, Arizona, southeast of Phoenix.

The new funding is intended to support Lucid in its expansion plans. Rawlinson expects the Air to be the catalyst for a number of future all-electric vehicles, including an SUV starting production in early 2023, and cheaper vehicles across the board.

Lucid currently employs almost 2,000 people. The US is expected to employ 3,000 people domestically by the end of 2022.

The deal includes a total investment of around $ 4.6 billion. It is funded with $ 2.1 billion in cash from CCIV and a fully committed PIPE of $ 2.5 billion at $ 15 per share from the Saudi Arabian state fund, as well as funds and accounts held by BlackRock, Fidelity and managed by others.