Lucid Reportedly In Acquisition Talks With At Least Two Other Unnamed Companies

Lucid Air Alpha Speed Car

JUL 24 2017 BY MARK KANE 12

Lucid Motors is at a crossroads, as the startup company is trying to figure out which path it should proceed down for the introduction of the Lucid Air:  Sell out, or focus on raising more funds?

Lucid Motors

The major concern at Lucid is the lack of capital for building a production facility in Arizona and bringing the all-electric Air to the market on its own (which sounds like kinda a big issue to us).

So, there are several (at least theoretical) options, including raising capital through Series D (as “a work in process,”) or selling the business to someone bigger, like traditional car manufacturer.

One of the companies that apparently was interested in a Lucid acquisition to some degree was Ford. Jim Hackett, Ford’s new, along with a group of executives, visited Lucid on June 28th, but reports since say Ford is not interested at this stage of the game.  While some other reports suggest Ford is still considering it in the longer term:

“Lucid began its fourth round of institutional fundraising earlier this year, with the help of investment bank Morgan Stanley. Ford’s acquisition offer came as a surprise, said a source close to Lucid: “The bank approached Ford to see if they wanted to participate in the Series D. They came back and said they wanted to acquire.””

“Ford subsequently presented Lucid with a draft contract called a term sheet. Even if Lucid agreed to sell, there would be a period of research and due diligence before the acquisition closed.”

There are two unnamed companies interested in Lucid too:

“…Lucid sitting on financing offers of more than $200 million while it considers selling the company outright.”

Lucid Motors, formerly Atieva, was founded in 2007 by an ex-vice president of Tesla. The company was developing batteries and drivetrains for EVs. In 2014, China’s BAIC (Beijing Automotive Industry Holding) and LeEco invested some $100 million in Lucid, but BAIC – unable to take control of Lucid – exited the business in 2016, and the company went into the hands of LeEco’s troubled owner, thousandaire billionaire Jia Yueting.

In parallel, Jia founded Faraday Future, another startup automaker short on funding, having recently scrapped plans for its massive Nevada factory.

As of today, it’s unknown what will become of Lucid Motors, and where or even if the manufacturing plant will be built – in Casa Grande, Arizona or China.

Source: Recode

Categories: Lucid

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12 Comments on "Lucid Reportedly In Acquisition Talks With At Least Two Other Unnamed Companies"

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Good luck with that, the car industry does not have a lot of cash atm. Heck they can’t sell their own cars.

GM is getting whacked harder than any of the major automakers by the industry-wide plunge in car sales, as Americans switch in ever larger numbers from cars to “trucks,” which include pickups, van, SUVs and crossovers. In the first half of 2017, GM’s car sales in the US plunged 19%, and in June 38%. The rest of the industry (without GM) booked declines in car sales of “only” 10% in the first half and 9% in June. GM is losing ground in the bitter industry-wide reality of dropping car sales. Inventory is piling up on GM dealer lots. At the end of June, some car models exceeded a catastrophic 180 days’ supply. GM has already cut production. There have been layoffs. Plants have been temporarily shut

If GM is consistent it will just withdraw from the US market, and become a China and South America only brand. Withdrawing from the market has been GM’s answer in Russia, India, South Africa and Europe so why stop there? I’m anything but a GM fanboy, but I can see need for a strong GM and to see this giving up mentality is really disheartening.

To be fair you should quote GM’s truck sales also. You can google this.

In the first five months of 2017, GM U.S. sales have decreased 1 percent to 1,171,291 units

Read more:

Yes, it looks like Lucid has picked one of the worst possible times to try to find someone to buy them out.

What does Lucid Motors have of current value that is greater than their accumulated total liabilities? They have not manafactured a single production car. Would be interesting to know if the IP of value (if any) is held by Lucid Motors or a separate Chinese owned company.

I know little about Lucid’s financial situation, but I suspect you’ve put your finger on the nub of the matter. Lucid made a prototype with a very nicely designed interior, but how does that translate to the expertise needed to mass produce electric cars and sell them in the highly competitive new car market, at a profit? Likely it doesn’t.

My advice for Lucid: Look at what Rivian Automotive is doing. Brag a lot less and accomplish a lot more, and then perhaps you’ll attract the investor money you need.

They are better off selling to somebody that already has factory space, and distribution, etc.

The problem is that none of the ICE car companies really want what Lucid has. It has been half a decade since the Model S came out. Even long since the first one showed up at car shows.

If the ICE car makers wanted a Model S competitor like Lucid builds, they very much could have done it already if they wanted to. Instead they are very content to drag their feet and wring out every ICE car sale they can get while prices come down on batteries and other common EV components.

Maybe a Chinese car company could buy them? But there are too many of those already. China actually needs consolidation, not more EV companies.

I’m guessing these “leaks” are coming from Lucid. I can imagine the conversation with ford:

Lucid- I think you should buy us!
Ford- We’ll get back to you.
Lucid leak- Ford interested in buying Lucid in the future!

Not clear to me why any vendor would spend money on Lucid. They have no brand recognition (if anything, lots of people are probably associating them with Faraday Future simply as they’re also a Chinese-backed luxury-EV wannabee — not a good thing), and no actual cars completed & sold yet, so I doubt there’s enough engineering there to be worthwhile.

Any car vendor interested in selling a line of $100K-$150K cars would need to be very careful job fitting them in its existing lineup of brands…

Tesla was lucky way back to have had Musk get interested in it, but it’s over a dozen years too late to become the first Tesla.

Lucid might be a good match with Lincoln though as a sub brand if Ford does go after them.

My prediction: It is done already since Chinese already sucked the brain and the know how out of it!! No way it’s going to happen here in US.