lucid motors stock

Lucid Motors Stock IPO: Biggest EV SPAC Deal in 20 Years!

Lucid Motors is the country’s newest crown jewel in electric vehicle potential. But, can you buy stock in Lucid Motors?

Electric vehicles and trucks are undoubtedly the future of transportation, and no company has proved this more than Tesla. They are venturing into a highly competitive niche, loaded with fierce rivals.

They have flooded the financial media with attention, and you can’t watch CNBC for a day without hearing their name mentioned by an analyst or anchor.

Once available on the public market, this company has the potential to be one of the Best Undervalued Stocks of all time.

We have also included Lucid Motors in our list of Best Upcoming IPOs.

Lucid Motors History

Lucid Motors was founded 11 years ago under a different brand and mission statements/core values.

lucid motors stock ipo

The company was called Atieva at the time, and it was focused on developing electric car battery technology.

On a dime, Atieva shifted from battery-focused production to producing electric cars and changed their name in 2016. Essentially, electric cars are nothing more than a battery with wheels attached.

Yes, extremely simplified but well beyond the scope of this article.

 

The Lucid company website goes into a little more detail surrounding their company history and goals for the future.

“Today, at Lucid, we are reimagining what a car can be from every angle. We are working on transcending the perceived limitations of space, performance and intelligence for those who move the world forward.

We are working with the world’s leading creators to build an automobile from the ground up.

It all started with a phone call on the last day of December 2007.

I was initially planning on spending the day with my family in Cupertino, but that day took a surprising turn when my two partners and I received confirmation of a seed investment from Venrock.

We immediately filed the papers to find the company.

We were excited to leverage our extensive experience at Tesla and Oracle in battery system architecture and control software to develop advanced high voltage battery packs.”

This story is very similar to Rivian, also a manufacturer of electric vehicles. Both companies were founded by former employees in the industry who thought they could create a better business on their own efforts.

Electric Vehicle Future

Electric Vehicle Future

McKinsey, one of the most respected management consulting firms, published their comprehensive insight into the future of driving across the globe.

“EV sales grew to more than two million units globally in 2018: an increase of 63 percent on a year-on-year basis, and a rate slightly higher than in prior years.

Nevertheless, with a penetration rate of 2.2 percent, EVs still only represent a fraction of the overall light-vehicle market.

lucid motors stock could benefit from growth in electric vehicles
Source: The Fuse

The ratio of battery EVs (BEVs) to plug-in hybrid EVs (PHEVs) held relatively steady from 2017.

The US market almost doubled to 360,000 EV units, mainly because of the strong sales performance of Tesla’s Model 3.

Tesla sold 140,000 Model 3 cars in 2018, making it the best-selling EV in the United States (40 percent market share) and globally (7 percent).

For the first time in the country, an EV model sold equally as well as comparable internal-combustion-engine (ICE) cars.

While high sales numbers for the Model 3 in 2018 were partially supported by EV tax credits and high demand from the list of reservation holders, they still show that EVs can be attractive alternatives to gasoline-powered cars and that a strong market potential exists for a growing number of premium and mass-premium buyers.

Due to the massive growth of the EV sector, investors can benefit by owning stocks of companies involved in lithium or cobalt production.

Nevertheless, sustainable market growth will also depend on regulatory developments, given ongoing discussions among federal and national parties regarding the rollback of 2025 fuel-economy standards as well as state authority under the Clean Air Act.”

There has been heavy contention in the government surrounding the further subsidy of electric vehicles. Traditional gasoline car manufacturers (Toyota, GM, Ford) argue that credit destroys their business.

Should the government be picking winners and losers? Up to you to decide for yourself!

EV Tax Credit and Affordability

Tesla has made no bones about the tax credits impacting their bottom line. Certainly, the EV tax credit has made purchasing a Tesla more affordable in recent years.

“Since 2010, anyone purchasing a qualified electric vehicle, including any new Tesla model, has been eligible to receive a $7,500 federal tax credit.

This tax credit begins to phase out once a manufacturer has sold 200,000 qualifying vehicles in the U.S.

Last month, Tesla sold its 200,000th such vehicle, and since then we’ve heard from some customers asking how the phase out of the tax credit works.

While the tax credit will exist in some form through the end of 2019, those who want the full $7,500 tax credit will need to take delivery of their vehicle by the end of this year.

Please remember that your eligibility for income tax credits depends on your personal tax situation. We recommend speaking with a tax professional for guidance.”

Tax credits are levied as an incentive system for individuals to switch their car purchasing habits. Government clearly believes electric vehicles hold the key to a more sustainable future.

 

Also, when federal tax credits are paired with state and local credits, some taxpayers effectively received a $10,000+ car discount. This made a $30,000 Tesla cost $20,000 in after-tax, effective cost.

Lucid Motors stock could dramatically benefit from this arrangement and pick up market share.

Lucid Motors Stock IPO?

The biggest problem for electric vehicles is the lack of infrastructure. No, not roads or bridges. For example, how do you fill up your car on a long road trip from Los Angeles to Denver?

Well, the truth is you might have to go out of your way. However, this is exactly one of the main problems Lucid Motors is hoping to solve.

Lucid Motors recently announced their upcoming Lucid Air sedan would have a range of 517 miles. This would be the first electric car to surpass a 500-mile range. 500 miles is a long time!

Investors are betting the house (or ranch, whichever you prefer) on the technological feasibility of this jaw-dropping engineering advancement. Upon completion of the project, Lucid Motors stock could go public!

The largest upside to “going public” or an IPO is raising capital for expanding operations or working capital. The cost of equity is significantly higher than the cost of debt, so it’s usually a last resort.

Contrarily, an IPO on Lucid Motors stock would allow initial investors to cash-out money that has been tied up for years. Think about it! If you were the first investor your money has been locked-up for a decade.

This oncoming liquidity train might be exactly what you’re looking for, and it would likely be a marvelous payday!

Just like the internet tech bubble and Uber, Lyft, Chewy, and Nikola, the goal for some speculators may not be to ever earn a profit but simply IPO and find a greater fool.

Lucid Motors SPAC Deal

Lucid Motors SPAC Deal

Bloomberg just announced the news that Lucid Motors is close to a deal via a SPAC acquisition.

“Lucid Motors Inc. is nearing a deal to go public through a merger with a blank-check company started by investment banker Michael Klein that could be announced early next week, according to people familiar with the matter.

The combined entity will be valued at as much as $15 billion, the people said, asking not to be identified because the matter is private.

The special purpose acquisition company has been in talks to raise between $1 billion and $1.5 billion in funding from institutional investors to support the transaction, the people added.

The valuation and the amount of additional funding could still change based on investor demand.

A deal for the electric vehicle maker could be announced on Tuesday, two of the people said. The talks are ongoing but could still fall apart.

Klein, a former Citigroup Inc. rainmaker, will use Churchill Capital Corp IV, his largest SPAC that has raised more than $2 billion, for the transaction, the people said.

Lucid is backed by Saudi Arabia’s sovereign wealth fund.”

Lucid Motors Stock Price

The big question surrounds whether Lucid Motors will select the dealership sales model or direct to consumer sales (like Tesla).

Valuing the stock price for Lucid Motors will be immensely difficult. For simplicity’s sake, we can assume similar financing structures as their industry peers.

Nikola had approximately 300 million shares outstanding per close of the fiscal year 2020. Pair this with an additional bump in IPO publicity, and we can arrive at a final rough calculation.

Based on an estimated $15 billion valuation, Lucid Motors stock would appraise at approximately $50 per share.

My personal belief is that publicly traded shares would explode north of $50, simply based on publicity and retail demand.

Investment Alternatives

New Competition

As if Lucid Motors didn’t already face enough competition, General Motors just committed to an EV fleet by 2025.

“GM is on its way to an all-electric future, with a commitment to 30 new global electric vehicles by 2025.

We are aggressively going after every aspect of what it takes to put everyone in an EV because we need millions of EVs on the road to make a meaningful impact toward building a zero-emissions future.

GM is positioned to design, engineer, and produce EVs for every style and price point, and we are rapidly building a competitive advantage in batteries, software, vehicle integration, manufacturing and customer experience.”

Investment Alternatives

Lucid Motors isn’t the only way to profit off the massive generational shift away from natural gas and fossil fuels to sustainability. Here are a few other electric vehicle manufacturers.

  • Tesla
  • Nikola
  • Rivian

Can You Buy Stock in Lucid Motors?

Yes, you can buy stock in Lucid Motors EV by purchasing CCIV. This is one of the biggest SPAC deals in history.

As a promising start-up, I would recommend keeping an eye out for new details surrounding the Lucid Air battery range. It could be an absolute game changer!

Ludid Motors Stock FAQ

Can you buy Lucid Motors Stock?

Yes, you can buy stock in Lucid Motors EV by purchasing CCIV. This is one of the biggest SPAC deals in history.

When is the Lucid Motors IPO?

Lucid Motors has not filed for an IPO, as they are going public via a SPAC Acquisition.

How much will Lucid Motors Stock Cost?

The Lucid Motors stock price will be wrapped among various other companies in a SPAC.

Who owns Lucid Motors?

CCIV SPAC owns Lucid Motors.