Lotus Technology, a luxury electric vehicle maker based in China, announced on Tuesday that it will go public in the United States through a merger with L Catterton Asia Acquisition Corp (LCAA), a special purpose acquisition company (SPAC) backed by private equity firm L Catterton. The deal will value the combined entity at $5.4 billion and provide Lotus Tech with $870 million in gross proceeds to fund its growth and expansion plans.
Lotus Tech’s History and Vision
Lotus Tech is the electric vehicle division of Group Lotus, a British sports car brand that is jointly owned by Chinese automaker Geely and Malaysia’s Etika Automotive. Lotus Tech was established in 2019 and is headquartered in Wuhan, China. It produces electric vehicles through a partnership with Geely, which also owns Volvo, Polestar, and Lynk & Co.
Lotus Tech’s vision is to create premium electric vehicles that combine performance, design, and technology, inspired by the heritage and spirit of Lotus. The company’s name is derived from the lotus flower, which symbolizes purity, elegance, and resilience in Asian culture. Lotus Tech aims to become a global leader in the luxury electric vehicle market, which is expected to grow at a compound annual growth rate of 25% from 2020 to 2030, according to a report by Grand View Research.
Lotus Tech’s Products and Plans
Lotus Tech’s first product is the Eletre, a luxury electric SUV that features a sleek design, a spacious interior, and advanced technology. The Eletre has a range of 500 kilometers (310 miles) on a single charge and can accelerate from 0 to 100 kilometers per hour (62 miles per hour) in 4.5 seconds. The Eletre also has a smart cockpit that integrates artificial intelligence, biometrics, voice control, and cloud services. The Eletre is priced at 368,000 yuan ($57,000) in China and will compete with Tesla’s Model Y, Nio’s ES6, and Xpeng’s G3.
Lotus Tech plans to start deliveries of the Eletre in China in the first quarter of 2023 and then in Britain and the European Union later this year. The company also has plans to expand deliveries to the United States and other countries in the future. Lotus Tech is also developing two other models, the Eterne and the Elise, which are expected to be launched in 2024 and 2025, respectively. The Eterne is a luxury electric sedan, while the Elise is a sports car that will revive the iconic Lotus nameplate.
Lotus Tech’s Merger with L Catterton SPAC
Lotus Tech will merge with L Catterton Asia Acquisition Corp, a SPAC that raised $250 million when it went public on the Nasdaq in 2021. A SPAC is a shell company that raises funds from investors to acquire a private company and take it public, bypassing the traditional initial public offering (IPO) process. SPACs have become a popular way for electric vehicle startups to access the capital markets, as seen by the recent deals involving Lucid Motors, Fisker, and Canoo.
The merger will value Lotus Tech at $5.4 billion, which includes $288 million of cash in LCAA’s trust account. The deal will also provide Lotus Tech with $870 million in gross proceeds, which consists of $370 million from LCAA and $500 million from a private investment in public equity (PIPE) transaction. The PIPE investors include Geely, Etika, NIO Capital, L Catterton, and other institutional investors. The deal is expected to close in the second quarter of 2023, subject to regulatory and shareholder approvals. Upon completion, the combined company will be named Lotus Technology and will trade on the Nasdaq under the ticker symbol “LOT”.
Lotus Tech’s existing shareholders, including Geely, Etika, and NIO Capital, will retain their interests in the company and own 89.7% of it following the deal. The current leadership team, led by CEO Feng Qingfeng, will also remain in place. Feng said that the merger will provide significant support for Lotus Tech’s global expansion, brand collaboration, and strategic partnership potential. He also said that Lotus Tech will leverage its strong R&D capabilities, innovative technology, and differentiated design to deliver superior products and services to its customers.
