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Luxurious sports activities automotive and EV maker Lotus accomplished its SPAC merger within the US final week and its inventory was publicly traded for the primary time on Friday. Given the unsure EV market, it's an attention-grabbing flip of occasions for the Geely-backed automaker now generally known as Lotus Tech, however it could show to be an exception to the struggles of different pure-play EV makers.
Buying and selling on the Nasdaq underneath the ticker LOT, Lotus Tech will concentrate on the excessive finish of the EV market with its Electra SUV and Amelia sedan, which might be launched not solely within the US but additionally in Europe and, extra importantly, China .
“A very powerful factor right here is that we're positively going into extra markets on the identical time by means of extra fashions and extra shops,” Lotus Tech CFO Alexius Lee advised Yahoo Finance from the Nasdaq Markets website.
By the tip of the yr Lotus may have 4 autos in manufacturing, three of which might be EVs. “These 4 fashions are at the moment obtainable within the Asia Pacific area and a few are additionally obtainable within the UK and EU,” Lee stated. “We're bringing the brand new (Elettre) SUV mannequin to the U.S. within the third quarter of this yr, so there are completely different methods and completely different product choices and completely different situations in several markets.”
Lotus has been in a position to go to market in lots of areas as a result of help of its majority proprietor, Chinese language auto big Geely. Nevertheless it additionally raised a major sum of money by means of its SPAC merger. Lotus Tech stated it raised greater than $880 million in pre-closing and PIPE financing commitments, with a focused valuation of about $7 billion on the day of itemizing.
Lotus Tech additionally had an attention-grabbing accomplice with its SPAC merger along with L Catterton Asia Acquisition Corp (LCAA), which is backed by French luxurious conglomerate LVMH.
As Lotus targets the posh section with its autos – the Electra and Amea will play within the $80,000 to $150,000 ballpark – a accomplice like LVMH, with its deep connections and perception into the posh client, could possibly be extraordinarily helpful.
“What's extra necessary right here now could be that Anish Melwani, who’s CEO of LVMH North America, might be on the board of Lotus Tech,” Lee stated. “It is a nice alternative for us to develop a possible partnership when it comes to co-branding, co-marketing and extra, permitting Lotus to execute a technique and develop our full potential within the fast-growing, underserved EV luxurious section.” Will assist to do. market.”
Whereas the LVMH partnership is a pleasant achievement for Lotus, rivals like Mercedes, BMW and Polestar would disagree that the worldwide luxurious EV market is underserved. Nevertheless, one factor is for positive, these older manufacturers are withdrawing investments and beginning their very own EV plans, whereas Lotus goes full bore.
Moreover, Lee thinks the posh section will actually develop over the subsequent decade.
“If I take a look at Oliver Wyman's analysis, you'll see that this explicit section ($80,000-$150,000) is the most important contributor to the whole luxurious sector. On the identical time, it is rather underserved,” Lee stated. “Now, based mostly on this market analysis, this explicit section goes to develop at about 35% CAGR (compound annual progress charge) for the subsequent 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 following the SPAC merger, Li believes Lotus is poised for achievement. The massive query is whether or not Lotus's costly luxurious providing will attraction to high-end patrons.
Prasad Subramaniam is a reporter for Yahoo Finance. you’ll be able to comply with him Twitter and on Instagram,
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