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A Successful EV Start-Up Needs Cars, Capacity, and Cash

The all-elecric Lotus Eletre will hit Chinese roads in the first quarter of 2023 and European roads after that.

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Courtesy Lotus

The company that provided the chassis for the original
Roadster has reimagined itself as an electric-vehicle start-up. The market doesn’t have much love for EV start-ups in general these days, but it likes this one.

This past week, special-purpose acquisition company, or SPAC,
L Catterton Asia Acquisition
(ticker: LCAA) announced it was merging with Lotus Technology in a deal valuing the car maker at about $5.4 billion.

The deal is expected to close in the second half of 2023. At that time, the stock symbol will change to “LOT” from “LCAA.”

The $5.4 billion is the largest SPAC merger announced since September 2021. The SPAC market has been in a rut for most of the past year, with weak stock performance from SPAC-related companies, rising interest rates, and risk-taking out of style in markets.

There isn’t much enthusiasm for SPAC-related EV stocks either. Shares of
Lucid Group
Lordstown Motor
(RIDE), Fisker (FSR),
Faraday Future Intelligent Electric
(FFIE), and
Polestar Automotive
(PSNY) were once worth a combined $190 billion. They’re down to less than $40 billion today, off 80%. Including
Rivian Automotive
(RIVN), which raised cash in a traditional initial public offering instead of a SPAC merger, and those figures go to $305 billion from $57 billion, down about 81%.

Ford Motor
(F) and
General Motors
(GM) are worth a combined $110 billion.

The only EV start-ups with valuations north of $2 billion now are Lucid, Rivian, Polestar,
and, of course, Lotus. Those five account for about 95% of all the value in EV start-up stocks.

The five share some common characteristics. They have enough cash to last for a few quarters at least. They are all selling cars now. They also have the capacity to ramp up production. The market doesn’t want business plans anymore. It wants to see cars on the road, and an ability to achieve scale production.

Along with cash raised from the SPAC merger, Lotus, which provided its Elise chassis for the original Tesla (TSLA) Roadster about 15 years ago, is backed by Chinese car companies Geely Holding and
(NIO). That pair will still own almost 90% of the company once the SPAC merger is completed.

Geely has manufacturing capacity that Lotus can use, eliminating the need to build a car plant that costs billions. What’s more, the Lotus Eletre will hit Chinese and European roads in 2023. The all-electric SUV will cost more than $100,000.

Louts plans to ship about 22,000 units in 2023.

Fisker and Polestar are in similar situations.
Magna International
(MGA) is building Fisker’s first vehicle, the Ocean SUV, which is shipping in 2023. And Polestar uses Volvo, which is also owned by Geely, to build its electric vehicles.

Wall Street expect Fisker to deliver about 32,000 units in 2023. Polestar is expected to deliver about 80,000 units.

Fisker ended the third quarter with more than $800 million on its books. Polestar ended with about $1 billion on its books. Both amounts are enough to fund the companies for several more quarters.

Rivian and Lucid, like Fisker and Polestar, have cars on the roads and ramping sales. Rivian is expected to ship roughly 60,000 units in 2023, and Lucid should ship about 20,000 vehicles.

Rivian and Lucid, unlike Fisker and Polestar, don’t use contract manufacturing, though. Both have their own manufacturing facilities producing vehicles at high volumes. Lucid’s first plant is in Arizona, while Rivian’s is in Illinois.

Rivian and Lucid also have more cash than their EV start-up peers. Lucid ended the third quarter with roughly $4 billion on its books, and Rivian ended with roughly $14 billion. Lucid also has a wealthy backer. Saudi investment funds own a majority of its stock.

It’s still too early to tell if any of the EV start-ups will be long-term winners, but the market has made some bets on who has a shot. The price of admission is cash, capacity, and cars on roads.

L Catterton went public in March 2021, raising $286.5 million. Shares have traded around $10.30 since the deal with Lotus was announced on Jan. 31. That’s a premium to the value of the cash in the SPAC’s trust, suggesting that investors see value in the transaction.

For SPACs, 2021 was a record year with 613 going public, raising a combined $162.5 billion, according to SPAC Insider. That fell to 86 companies going public through a SPAC merger in 2022, and only two so far in 2023.

Write to Al Root at and Nicholas Jasinski at


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