Lotus Tech enters $5.4B SPAC for electric hypercars
A Lotus Evija electric sports car at the Guangzhou auto show in 2021. Photo: VCG/VCG via Getty Images
Lotus Technology, the electric vehicles division of British sports car maker Lotus, this morning announced a planned $5.4 billion SPAC merger with L Catterton Asia Acquisition.
Why it matters: The deal may revitalize an iconic but niche sports car company that's struggled to distinguish itself from the German automakers.
Details: L Catterton Asia Acquisition has about $288 million cash. It's listed on Nasdaq.
- The blank-check company is incorporated in the Cayman Islands. It's connected to L Catterton Asia, a Singapore-based private equity firm focused on the consumer market.
- Lotus Tech's existing equity holders — among them Zhejiang Geely Holding, Etika and NIO Capital — hold about 89.7% of issued and outstanding equity in the combined company.
- They're expected to retain those interests, Lotus Tech said in a press release.
Of note: Lotus Tech reportedly began production of its first electric car, the $2+ million Evija, last fall.
Zoom out: Lotus Cars in 2017 was acquired by Zhejiang Geely Holding Group, which retains majority control of the company.
- Geely, based in China, has built a big presence in electric vehicles, with brands that include Volvo Cars and Polestar.
Flashback: Geely's Polestar brand completed a SPAC merger in June 2022.
- First announced during the SPAC boom of 2021, the deal had pegged Polestar's enterprise valuation at $20 billion. Its market cap has since hovered around half that figure.
Meanwhile, electric automakers large and small have continued to plow through mountains of cash.
- Just yesterday the U.K. electric van maker Arrival announced plans to layoff half its workforce as it’s struggled following its own SPAC deal in March 2021.
What's next: Lotus Tech says its first electric SUV, the Eletre, will begin delivery in China Q1. It's expected to arrive in the U.K. and EU later this year.
- "Planning is underway for future delivery of Eletre to the U.S.," the company said.
- The Evija hypercar is expected to reach North America this year.
💭 Thought bubble: We've driven this SPAC road before with electric automakers. And while it's exciting, it may only lead downhill.