As Tesla (NASDAQ: TSLA) tries to maintain its market share in the electric vehicle (EV) space, competition continues to emerge from not only new companies but traditional automakers as well.
Contenders are trying to lower battery costs, embrace different business models like NIO's Battery as a Service (BaaS) paradigm, and electrify popular vehicles that currently use internal combustion engines, as is the case with Ford's F-150 Lightning model. Lucid Motors, which is making its market this month via a SPAC merger, plans to occupy the high-end luxury niche of the EV market.
The company was founded in 2007 by Bernard Tse and Sam Weng as Atieva, to build EV batteries and powertrains for other manufacturers. In 2016, the company rebranded as Lucid Motors and announced its intentions of launching an all-electric high-performance luxury vehicle. In 2019, CTO Peter Rawlinson, former VP of Engineering at Tesla, was given the additional title of CEO to lead the company in its endeavors.
Lucid Motors will be going public through a SPAC merger with Michael Klein's Churchill Capital Corp IV (NYSE: CCIV) on July 23. As this is a SPAC IPO, you can purchase shares of CCIV now, which will convert to LCID on the Nasdaq after the merger is completed.
Valued at $24 billion, the deal also provides Lucid Motors with $4.6 billion in cash to put towards production. With a $60 billion market cap and 1.6 billion shares outstanding, price per share is anticipated to fall in the $35-$40 range. It should be noted that the deal stipulates that Churchill Capital receives only 16.1% of Lucid Motors.
Lucid Motors currently has zero revenue. According to the company's S-1, by 2025, it expects to have revenue of nearly $14 billion, net income of over $630 million, EBITDA of $1.7 billion, and free cash flow totaling over $320 million. As for the product, it expects to ship roughly 600 vehicles by year's end and over 135,000 annually by 2025.
At the end of 2020, Lucid Motors completed the initial stages of its Advanced Manufacturing Plant (AMP-1) in Casa Grande, Arizona. The state-of-the-art factory can easily handle its current capacity but will be able to churn out 365,000 cars annually when fully operational. Like Volkswagen and General Motors, Lucid Motors boasts a proprietary drivetrain stage in its Lucid Electric Advanced Platform (LEAP), which took a decade to develop, test, and fine-tune. With 403 patents backing LEAP, the company can easily license this tech to other manufacturers and secure an additional source of revenue.
After Tesla recently canceled its Plaid+ model, Lucid's Air Dream has what it takes to beat the competition. However, the Lucid Air Dream comes with a hefty price tag of $160,000 but you certainly get what you pay for as it has the longest range of any EV on the market at over 500 miles and the quickest charge of 20 minutes for 300 miles. Additionally, the vehicle can go from 0-60 in 2.5 seconds and has an advanced aerodynamic design. It's little wonder then that the company has amassed over 7,500 reservations representing over $650 million dollars in future sales.
After Lucid Motors establishes itself as a luxury EV manufacturer, it plans on releasing an SUV in 2023 as part of its project Gravity. CEO of Lucid confirmed that the range of models won't stop there though with others in the pipeline.
The company also opened a new Lucid Studio recently which will apparently give visitors the opportunity to "experience Lucid Air and learn more about the full lineup" in reality.
Eventually, the company will use its strong brand equity and in-house tech to start producing more affordable vehicles. Further down the line, Lucid Motors plans to sell energy storage solutions by leveraging its proprietary ultra-dense battery tech. The company's outlook is so rosy that one analyst believes that if all the pieces fall into place, it can reach a trillion-dollar valuation by 2040.
Having said all that, it's important to note that Lucid Motors has exactly zero experience in mass-producing vehicles of any kind, let alone EVs. Additionally, the EV space is overflowing with competition from all corners of the globe, especially from established automakers with a built-in customer base.
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