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 often called Lotus Tech given the unsure EV market, however one that 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 give attention to the upper finish of the EV market with its Eletre SUV and Emeya sedan, which is not going to solely be supplied within the US but additionally in Europe and, extra importantly, China.
“What’s most necessary right here is that we’re positively going to extra markets on the identical time by extra fashions and thru extra shops,” mentioned Lotus Tech CFO Alexious Lee to Yahoo Finance from the Nasdaq market web site.
By the tip of the yr Lotus could have 4 autos in manufacturing, three of them EVs. “These 4 fashions are presently obtainable in Asia Pacific and a part of it’s also obtainable in UK and EU,” Lee mentioned. “We’re having the brand new [Eletre] SUV mannequin coming into the U.S. within the third quarter of this yr, so totally different markets have totally different methods and totally different product choices and totally different situations.”
Lotus is ready to go to market in quite a few territories as a result of backing of its majority proprietor, Chinese language auto big Geely. Nevertheless it additionally raised a substantial sum of money by its SPAC merger. Lotus Tech mentioned 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 accomplice 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 section with its autos — the Eletre and Emeya can be taking part in within the $80,000 to $150,000 ballpark — having a accomplice like LVMH, with its deep connections and insights into the luxurious shopper, may very well be vastly useful.
“Now what’s extra necessary right here is Anish Melwani, who’s the CEO for LVMH North America, can be on the board of Lotus Tech,” Lee mentioned. “This can be a big alternative for us to develop a possible partnership when it comes to co-branding, co-marketing, and others in a method to assist Lotus execute a technique and develop our full potential within the fast-growing, underserved EV luxurious section market.”
Whereas the LVMH partnership is a pleasant feather within the cap for Lotus, opponents similar 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 section really rising over the following decade.
“If I take a look at Oliver Wyman’s analysis, you will see that this explicit section [$80,000-$150,000] is the largest quantity contributor in the entire luxurious area. On the identical time, it is very underserved,” Lee mentioned. “Now, primarily based on this market analysis, this explicit section is gonna develop about 35% CAGR [compound annual growth rate] for the following 10 years.”
With a technique tailor-made to the high-end luxurious market, monetary backing by China’s Geely, and a brand new accomplice in LVMH with its SPAC merger, Lee believes Lotus is ready up for fulfillment. The large query is whether or not Lotus’s dear luxurious choices will resonate with high-end consumers.
Pras Subramanian is a reporter for Yahoo Finance. You possibly can comply with him on Twitter and on Instagram.
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