To The Moon

The company that provided the chassis for the original Tesla $Tesla Motors(TSLA)$ Roadster has reimagined itself as an electric-vehicle start-up. The market doesn’t have much love for EV start-ups in general these days, but it likes this one.

This past week, special-purpose acquisition company, or SPAC, $L Catterton Asia Acquisition Corp(LCAA)$ announced it was merging with Lotus Technology in a deal valuing the car maker at about $5.4 billion.

The all-elecric Lotus Eletre will hit Chinese roads in the first quarter of 2023 and European roads after that. Courtesy Lotus

The deal is expected to close in the second half of 2023. At that time, the stock symbol will change to “LOT” from “LCAA.”

The $5.4 billion is the largest SPAC merger announced since September 2021. The SPAC market has been in a rut for most of the past year, with weak stock performance from SPAC-related companies, rising interest rates, and risk-taking out of style in markets.

There isn’t much enthusiasm for SPAC-related EV stocks either. Shares of $Lucid Group Inc(LCID)$), $Lordstown Motors Corp.(RIDE)$, $Fisker Inc.(FSR)$, $Canoo Inc.(GOEV)$$Arrival(ARVL)$, $Nikola Corporation(NKLA)$ , $Faraday Future Intelligent Electric Inc.(FFIE)$,, and $Polestar Automotive(PSNY)$were once worth a combined $190 billion. They’re down to less than $40 billion today, off 80%. Including $Rivian Automotive, Inc.(RIVN)$ , which raised cash in a traditional initial public offering instead of a SPAC merger, and those figures go to $305 billion from $57 billion, down about 81%.

$Ford(F)$ and $General Motors(GM)$ are worth a combined $110 billion.

The only EV start-ups with valuations north of $2 billion now are $Lucid Group Inc(LCID)$, $Rivian Automotive, Inc.(RIVN)$, $Polestar Automotive(PSNY)$, $Fisker Inc.(FSR)$ , and, of course, Lotus. Those five account for about 95% of all the value in EV start-up stocks.