Luxurious sports activities automobile and EV maker Lotus accomplished its SPAC merger final week within the U.S. and its inventory was publicly traded for the primary time on Friday. It’s an fascinating flip of occasions for the Geely-backed automaker now generally known as Lotus Tech given the unsure EV market, however one which will show an exception to the struggles of different pure-play EV makers.
Buying and selling underneath the ticker LOT on the Nasdaq, Lotus Tech will deal with the upper finish of the EV market with its Eletre SUV and Emeya sedan, which won’t solely be supplied within the US but in addition in Europe and, extra importantly, China.
“What is most important here is that we are definitely going to more markets at the same time through more models and through more stores,” stated Lotus Tech CFO Alexious Lee to Yahoo Finance from the Nasdaq market web site.
By the top of the yr Lotus could have 4 automobiles in manufacturing, three of them EVs. “These four models are currently available in Asia Pacific and part of it is also available in UK and EU,” Lee stated. “We’re having the brand new [Eletre] SUV mannequin coming into the U.S. within the third quarter of this yr, so completely different markets have completely different methods and completely different product choices and completely different circumstances.”
Lotus is ready to go to market in plenty of territories as a result of backing of its majority proprietor, Chinese language auto big Geely. Nevertheless it additionally raised a substantial amount of cash by way of its SPAC merger. Lotus Tech stated it raised greater than $880 million in pre-closing and PIPE financing commitments, with a focused valuation on itemizing day of almost $7 billion.
Lotus Tech additionally had an fascinating associate with its SPAC merging, combining with L Catterton Asia Acquisition Corp (LCAA), which is backed by French luxurious conglomerate LVMH.
As Lotus targets the luxurious phase with its automobiles — the Eletre and Emeya can be taking part in within the $80,000 to $150,000 ballpark — having a associate like LVMH, with its deep connections and insights into the luxurious shopper, might be vastly helpful.
“Now what is more important here is Anish Melwani, who is the CEO for LVMH North America, will be on the board of Lotus Tech,” Lee stated. “This is a huge opportunity for us to develop a potential partnership in terms of co-branding, co-marketing, and others in a way to help Lotus execute a strategy and develop our full potential in the fast-growing, underserved EV luxury segment market.”
Whereas the LVMH partnership is a pleasant feather within the cap for Lotus, opponents akin to Mercedes, BMW, and Polestar would beg to vary that the worldwide luxurious EV market is underserved. One factor for positive, nevertheless, is that these legacy manufacturers are pulling again investments and rollout of their EV plans whereas Lotus goes full bore.
Plus, Lee sees the luxurious phase truly rising over the subsequent decade.
“If I look at Oliver Wyman’s research, you’ll see that this particular segment [$80,000-$150,000] is the biggest volume contributor in the whole luxury space. At the same time, it’s very underserved,” Lee stated. “Now, based on this market research, this particular segment is gonna grow about 35% CAGR [compound annual growth rate] for the next 10 years.”
With a technique tailor-made to the high-end luxurious market, monetary backing by China’s Geely, and a brand new associate in LVMH with its SPAC merger, Lee believes Lotus is ready up for fulfillment. The large query is whether or not Lotus’s expensive luxurious choices will resonate with high-end consumers.
Pras Subramanian is a reporter for Yahoo Finance. You’ll be able to observe him on Twitter and on Instagram.
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