iscrunchy.com is reader-supported and the following article contain affiliate links, When you buy through links on our site, we may earn an affiliate commission.
As the wheel spins. Four years ago, Ford, the car giant from Detroit, and one of the largest manufacturers in the world, wanted to acquire an American startup that had just made its first steps in the field of electric vehicles. Today the same startup is already traded at a higher market value than that of the veteran manufacturer, which was established 105 years before it.
From bankruptcy to a market value approaching $ 100 billion
At the end of 2016, Lucid Motors announced the Air, its first electric car. Today, you can already order the luxurious electric vehicle that offers imaginary numbers, even in a world dominated by Tesla and the performance of its flagship vehicles. Among other things, the company’s advanced model offers up to 1,111 horsepower, acceleration from 0 to 100 km / h in 2.5 seconds and an almost unimaginable driving range of 836 km. And unlike many manufacturers who pride themselves on ranges, only to find out in practice that they offer a more modest range of 10-15 percent, this figure of 836 miles has been reviewed and approved by the U.S. Environmental Protection Agency, an independent and autonomous body.
But what’s interesting is that Lucid did not start as a carmaker. The company was founded under the name Atieva in 2007 by Peter Rollinson, who until then had served as vice president at Tesla, a young carmaker founded just 4 years earlier. In its early years Atieva focused on manufacturing batteries and propulsion systems (Drivetrain, the assembly of parts that transfer power from the engine to the wheels) until in 2016 it made a pivot to the worlds of electric vehicle manufacturing and changed its name to Lucid.
The first years were not easy. The startup ran into cash flow difficulties, which threatened its very operations, and Rollinson and his partners had to decide whether to sell the operations or try to raise additional investments. In 2017, as part of the company’s attempt to raise several hundred million dollars in a new round of funding, Lucid’s founders met with a number of institutional investors as well as Jim Hackett, Ford’s new CEO at the time. But the act, which was accompanied by a number of Ford executives, surprised Lucid chiefs, when instead of a term sheet document, under which Ford would flow many millions to Lucid, he pulled out an offer to buy the company.
Not to Ford, yes to Saudis
Lucid’s management decided to reject Ford’s takeover bid and was able to raise funds, which helped the company stand on its own two feet. Among the largest investors in the company is the Saudi public investment fund, which invested about $ 1.3 billion in 2019. Fast-forward to July this year, when Lucid becomes a public company, having merged with a listed skeleton company as part of the SPAC issue.
This week, the company released its first quarterly report, following which its share price jumped sharply from $ 27 last month to the current $ 55 area. The main reason is more than 17,000 orders placed by the company – worth about $ 1.3 billion in revenue, as well as the company’s statement of production capacity of 20,000 cars next year at the company’s plant in Arizona. In addition, investors are encouraged that the company started last month with the dedication of its first vehicles – and it plans to deliver about 520 Lucid Air vehicles to the first buyers.
Passes Ford
Lucid’s share price currently reflects a market value of about $ 77 billion. Meanwhile, the market value of Ford, which was established about 105 years before Lucid and sold more than 4 million cars in 2020, stands at $ 76 billion as of this writing. How does a wheel spin, have we already said? Now, it is true that these numbers are fluid and volatile. Earlier this week, for example, Lucid was worth nearly $ 90 billion, and its stock has fallen since then, but the trend is clear.
What’s interesting is that Lucid, despite the interesting story, is not a unique snowflake. Although there is much talk about Tesla, whose market value crossed the trillion dollars a few weeks ago, Rivian, an American niche manufacturer of electric vans, is already worth more than $ 105 billion, which means that its market value is similar to that of the Volkswagen Group for example. Although Rivian’s electric vans had already reached the first inspectors, and the impressions were excellent, Rivian has not yet delivered a single electric van to the customer. Volkswagen has meanwhile sold about 9 million cars in 2020.
And the Saudis by the way – the ones who saved Lucid – well, the Saudi fund’s investment in Lucid in 2019 arranged for it to hold 63 percent of the company. And the $ 1.3 billion invested just three years ago is already worth about $ 47 billion.