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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.

Lotus Tech enters $5.4B SPAC for electric hypercars

The deal may revitalize an iconic but niche automaker.

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

Electric vehicles

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&#x27;s struggled to distinguish itself from the German automakers.

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Lotus Tech enters $5.4B SPAC for electric hypercars

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