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Lotus Tech enters $5.4B SPAC for electric hypercars

Alan Neuhauser
Jan 31, 2023
A yellow Lotus Evija electric sports car at the Guangzhou auto show in 2021. Photo: VCG/VCG via Getty Images

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.

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.

💭 Thought bubble: We've driven this SPAC road before with electric automakers. And while it's exciting, it may only lead downhill.

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