Home System list Electric vehicle maker Lucid obtains SEC subpoena over $ 24 billion blank check deal

Electric vehicle maker Lucid obtains SEC subpoena over $ 24 billion blank check deal

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December 6 (Reuters) – The U.S. securities regulator has asked Lucid Group Inc (LCID.O) for documents related to an investigation into its blank check deal, joining a growing list of companies making the ‘under scrutiny for their merger with fictitious entities.

Shares of the luxury electric car maker fell 19.5% on Monday after it revealed it received a subpoena from the U.S. Securities and Exchange Commission (SEC) on Dec.3.

“The investigation appears to relate to the business combination between the company (Churchill Capital Corp. IV) and Atieva Inc and certain projections and statements,” Lucid said in a press release. deposit.

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Lucid’s deal with veteran Michael Klein’s blank check company earlier this year gave the combined company a pro forma net worth of $ 24 billion, making it one of the biggest deals with Special Purpose Acquisition Companies (SPAC).

The SEC declined to comment on its action against Lucid.

Entering the market via the SPAC route has become popular among electric vehicle (EV) manufacturers who have a vision but no prototype in an already capital-intensive industry.

“The problem is, a lot of these companies that have taken this approach are not far enough along to be truly considered a viable business,” said Sam Abuelsamid, automotive analyst at Guidehouse Insights.

The actions of other electric vehicle startups that went public through SPAC agreements, including Canoo Inc (GOEV.O) and Faraday Future Inc (FFIE.O) and Fisker Inc (FSR.N), were also affected on Monday.

Fisker said he was not under investigation for his PSPC merger last year. Canoo, Ree Automotive (REE.O) and Faraday could not be reached for comment.

As EV makers rush to ramp up production and try to catch up with Tesla Inc (TSLA.O), many have come under intense scrutiny by federal agencies and regulators.

Nikola is working with regulators to pay a fine and settle a charge against founder Trevor Milton, while Lordstown Motors (RIDE.O) is under investigation for vehicle preorders and its SPAC merger.

“Ever since statements by Nikola’s founder and former CEO resulted in three charges of federal criminal fraud, new electric vehicle manufacturers needed further scrutiny,” CFRA analyst Garrett said. Nelson.

Meanwhile, the SEC has opened an investigation into Tesla following a whistleblower complaint about fire risks associated with faults in the solar panel system. Read more

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Reporting by Nivedita Balu and Tiyashi Datta in Bangalore; Additional reporting by Katanga Johnson in Washington and Ben Klayman in Detroit; Editing by Amy Caren Daniel and Arun Koyyur

Our standards: Thomson Reuters Trust Principles.

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