A luxury electric vehicle maker looking to challenge the dominance of Elon Musk’s Tesla is set to go public in a blank cheque deal that will value it at $24bn (£17bn).
California-based Lucid Motors has agreed to merge with Churchill Capital IV, a special purpose acquisition company (Spac) set up by former Citigroup banker Michael Klein.
The deal includes a $2.1bn cash contribution from Churchill Capital and a private investment in public equity (Pipe) injection of $2.5bn from investors.
The value of the Pipe fundraising — a method often used in Spac deals — makes it one of the largest blank cheque deals in history.
Shares in CCIV dropped by more than a third in after-hours trading.
Lucid, which is backed by Saudi Arabia’s sovereign wealth fund and run by a former Tesla engineer, is the latest firm in the booming electric vehicle market to tap the market for new funding.
It is also the latest in a growing trend of floats carried out through blank cheque deals, where shell companies are listed on the stock exchange and then merged with target businesses.
Klein is one of the leading figures in the Spac trend, listing seven companies through his Churchill Capital vehicles. CCIV raised $1.8bn in a funding round last July.
Lucid is set to begin production in the second half of this year with Lucid Air, its first luxury sedan.
The company, whose manufacturing is based in Arizona, aims to deliver 20,000 vehicles in 2022 and 251,000 in 2026 as it adds new models.