Photo: Lucid Media
Turbulent is an appropriate adjective to describe the automotive manufacturing industry over the last several years. From supply chain and parts shortage issues and inflation to knee-jerk monetary policy decisions in response to the you-know-what, the industry has been shaken to its core.
While all this apus-crapus has been going on, legacy automakers and startups have been designing, engineering, and in most cases, manufacturing electric vehicles in a significant shift away from gas-powered vehicles.
For the big boys like Honda, Ford, Toyota, and VW, among many others, the price tag involved in making that transition has been multiplied by the disruptions. But they have deep enough pockets to absorb the costs and wait out the turmoil.
For startups, it is a different story altogether as they struggle to get newly built electric vehicles into the hands of customers while dealing with disruptions and trying not to run out of capital.
The last issue they want to deal with is lawsuits, such as the ones the Lucid Group has had to endure. To say the Newark, California-based company had a rough year would be an understatement, at the very least. With little to celebrate, the company looked forward to the turn of the calendar.
So far, so good in 2023 for the makers of the luxury Lucid Air and Lucid Air Pure. The company has learned that U.S. District Judge Yvonne Gonzalez Rogers in Oakland, California, has dismissed a lawsuit against the company, filed by a group of shareholders.
It's rather complex, but the gist of the lawsuit centered around the 2021 merger of Lucid and Churchill Capital Corp IV (CCIV), a special-purpose acquisition company or SPAC (a SPAC is a publicly traded company created for the purpose of acquiring or merging with an existing company).
Churchill shareholders claim the company's Chief Executive Peter Rawlinson made misleading statements in an interview about its Lucid Air production plans for 2021 in a February 5, 2021, interview. Rawlins told CNBC the company would produce between 6,000 and 7,000 Lucid Air vehicles in 2021 at a factory that it had "already built."
Following the February 2021 merger with Churchill, shares of Lucid fell by 50% over the following two days, as Lucid reduced its forecast to just 577 vehicles and the factory was not built. The crash wiped out $7.4 billion in the value of Lucid, triggering the shareholder lawsuit.
In the end, Judge Rogers wrote, "The court cannot conceive of how plaintiffs could reasonably think a merger was likely when Lucid and CCIV had not even publicly acknowledged that a merger was being considered," as reported by Reuters.
The decision follows a string of positive news that can be traced back to the final days of 2022 when news broke the company had secured a much-needed $915 million cash injection from the Public Investment Fund of Saudi Arabia. That was followed by deliveries of the first Lucid Air Pure sedans just before the ball dropped for the new year.
The dawn of 2023 brought some additional welcomed news in the form of an Illinois court decision going Lucid's way. A lawsuit by the dealership association of Illinois lost a case that they hoped would force Lucid and Rivian to sell their vehicles through dealerships. In the end, a judge awarded the company's EV dealership licenses for the state.
The Lucid models are manufactured at the company's factory in Chandler, Arizona. In addition to Lucid making its first deliveries of the Lucid Air in the U.S. back in late 2021, the company began shipping vehicles to Europe last December.
For the big boys like Honda, Ford, Toyota, and VW, among many others, the price tag involved in making that transition has been multiplied by the disruptions. But they have deep enough pockets to absorb the costs and wait out the turmoil.
For startups, it is a different story altogether as they struggle to get newly built electric vehicles into the hands of customers while dealing with disruptions and trying not to run out of capital.
The last issue they want to deal with is lawsuits, such as the ones the Lucid Group has had to endure. To say the Newark, California-based company had a rough year would be an understatement, at the very least. With little to celebrate, the company looked forward to the turn of the calendar.
So far, so good in 2023 for the makers of the luxury Lucid Air and Lucid Air Pure. The company has learned that U.S. District Judge Yvonne Gonzalez Rogers in Oakland, California, has dismissed a lawsuit against the company, filed by a group of shareholders.
It's rather complex, but the gist of the lawsuit centered around the 2021 merger of Lucid and Churchill Capital Corp IV (CCIV), a special-purpose acquisition company or SPAC (a SPAC is a publicly traded company created for the purpose of acquiring or merging with an existing company).
Churchill shareholders claim the company's Chief Executive Peter Rawlinson made misleading statements in an interview about its Lucid Air production plans for 2021 in a February 5, 2021, interview. Rawlins told CNBC the company would produce between 6,000 and 7,000 Lucid Air vehicles in 2021 at a factory that it had "already built."
Following the February 2021 merger with Churchill, shares of Lucid fell by 50% over the following two days, as Lucid reduced its forecast to just 577 vehicles and the factory was not built. The crash wiped out $7.4 billion in the value of Lucid, triggering the shareholder lawsuit.
In the end, Judge Rogers wrote, "The court cannot conceive of how plaintiffs could reasonably think a merger was likely when Lucid and CCIV had not even publicly acknowledged that a merger was being considered," as reported by Reuters.
The decision follows a string of positive news that can be traced back to the final days of 2022 when news broke the company had secured a much-needed $915 million cash injection from the Public Investment Fund of Saudi Arabia. That was followed by deliveries of the first Lucid Air Pure sedans just before the ball dropped for the new year.
The dawn of 2023 brought some additional welcomed news in the form of an Illinois court decision going Lucid's way. A lawsuit by the dealership association of Illinois lost a case that they hoped would force Lucid and Rivian to sell their vehicles through dealerships. In the end, a judge awarded the company's EV dealership licenses for the state.
The Lucid models are manufactured at the company's factory in Chandler, Arizona. In addition to Lucid making its first deliveries of the Lucid Air in the U.S. back in late 2021, the company began shipping vehicles to Europe last December.
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