Lucid Motors, due to go public by merging with the blank-check company Churchill Capital Corp IV (NYSE: CCIV) plans to launch a competing vehicle to Tesla Inc’s (NASDAQ: TSLA) Model 3 sedan, Reuters reported Tuesday.
What Happened: The revelation was made by Peter Rawlinson, CEO of Lucid and a former Tesla engineer, who said the rival vehicle would be launched in 2024 or 2025.
Rawlinson said that producing a mass automobile on a large scale was an uphill task financially.
“To make a smaller car requires more capital, because you need a bigger factory and more automation,” Rawlinson told Reuters.
The executive added that he “can’t wait” to make a Model 3-like car but the first priority would be a luxury vehicle as it takes fewer resources to manufacture.
Why It Matters: The company is on track to begin deliveries of its Lucid Air luxury vehicle in the second half of 2021.
It may be too late for Lucid to launch more affordable models as rivals Volkswagen AG (OTC: VWAGY), Hyundai Motor Company (OTC: HYMTF), and Ford Motor Company (NYSE: F) are on their way to introducing such vehicles, noted Reuters.
Rawlinson disclosed that Lucid expects to make a sub-$70,000 version of its luxury sedan in 2022 and would follow with a sports utility vehicle in 2023.
The development of pickup trucks and commercial vehicles is still years away and might involve working with partners, as per the executive.
Lucid has supply contracts with battery makers LG Chem and Samsung SDI.
While Rawlinson acknowledged that the “world needs $25,000 cars urgently,” he said Lucid can’t do it for eight years on a realistic basis and even Tesla was yet to launch such a car.
Lucid confirmed a SPAC merger with Churchill this week, which will value the automaker at a transaction equity value of $11.75 billion.
Price Action: Churchill Capital shares closed 38.63% lower at $35.21 on Tuesday and gained 0.4% in the after-hours session.
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