Shares of PIF-backed EV maker Lucid Motors rise in Nasdaq debut

Lucid's shares, which opened at $25.24, were up 6.5 per cent in early trading

Lucid Motors' chief executive Peter Rawlinson takes photos with colleagues outside the Nasdaq MarketSite as the company begins trading on the Nasdaq stock exchange on Monday. Andrew Kelly / Reuters

Shares of Lucid Group increased as much as 11 per cent on their Nasdaq debut on Monday after the electric vehicle maker completed its merger with a blank-cheque company backed by Wall Street dealmaker Michael Klein.

The luxury electric vehicle maker, run by a former Tesla engineer, had agreed to go public in February through a merger with Churchill Capital. The deal gave the combined company a pro-forma equity value of $24 billion.

Lucid's listing is a huge dividend for the Public Investment Fund, Saudi Arabia's sovereign wealth fund, which had invested more than $1bn in the electric car maker in 2018 to take a substantial stake. PIF, in a tweet, congratulated Lucid after it went public.

Shares of Lucid, which opened at $25.24, were up 6.5 per cent in early trading.

With emission regulations being made tougher in Europe and elsewhere, the Biden administration's green wave push in the US and the rise of electric car maker Tesla have investors rushing into the EV sector.

Other prominent players in the sector went public through mergers with so-called special purpose acquisition companies last year. While some deals such as Fisker have delivered, others such as Nikola have given up short-term gains.

Although Spacs had gained immense popularity among retail traders as well as Wall Street funds last year, fear of a bubble and frothy valuations triggered a sell-off in Spacs shares in March.