Geely’s Lotus Tech to gain Nasdaq listing via SPAC deal as it prepares to launch its first model Eletre in China soon

Lotus Tech is a division of sports car company Group Lotus, in which Chinese carmaker Zhejiang Geely Holding Group owns a majority stake
Lotus Tech will be merged with the SPAC L Catterton Asia Acquisition Corp, which went public in 2021 and raised US$250 million

Electric & new energy vehicles

Daniel Renin Shanghai

Published: 7:30am, 1 Feb 2023

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Lotus Technology, a luxury electric vehicle (EV) maker, will gain a Nasdaq listing via a merger with a special purpose acquisition company (SPAC), boosting its plan to tap an accelerated electrification drive in the global automotive industry.

The company, a division of sports car company Group Lotus, in which Chinese carmaker Zhejiang Geely Holding Group owns a majority stake, will be valued at US$5.4 billion after the deal, according to a Tuesday statement by Lotus Tech.

SPACs refer to shell companies that raise funds in an initial public offering with the aim of buying a private company. For the company being acquired, the merger is an alternative way to go public over a traditional listing.

Lotus Tech will be merged with the SPAC L Catterton Asia Acquisition Corp, which went public in 2021 and raised US$250 million.

“This is an exciting time for Lotus Tech as we work towards delivering our first fully electric hyper SUV (sport-utility vehicle), applying our innovation and engineering expertise to meet the rising global demand for luxury EVs,” Feng Qingfeng, CEO of Lotus Tech said in the statement.

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“We believe the proposed business combination and listing will help position Lotus Tech as a leading global luxury EV company … accelerate our growth, and importantly, further our mission to steer the industry towards a more sustainable future.”

Lotus Tech, which produces cars through a partnership with Geely, is headquartered in Wuhan, capital of central Hubei province.

After the SPAC deal, Lotus Tech’s existing shareholders including Geely, Malaysia’s Etika Automotive, and Nio Capital, will retain their interests in the merged entity and own a combined 89.7 per cent stake.

Lotus Tech plans to start delivering its first model, the electric SUV Eletre, in China in the first quarter before selling the vehicle in Britain and the European Union later this year, according to the statement.

“New model launches in the Chinese EV market will benefit consumers as they have more choices while tougher competition could force EV brands to mark down retail prices,” said Eric Han, a senior manager at Suolei, an advisory firm in Shanghai. “Lotus Tech also has reasons to launch its vehicles in China first because it is the world’s largest EV market.”

Lotus Tech says that Eletre, which is fitted with Lidar sensors, will feature a Level 4 (L4) autonomous driving system, supercharging capabilities, high energy conservation and high-speed data transmission.

Geely aims to deliver 10,000 EVs a month, taking on Tesla, domestic rivals

L4 autonomous driving does not require human intervention in most circumstances, but the driver still has the option to manually take over control of the car, according to global standardisation body SAE International. L5, or full driving automation, does not need any human intervention under any circumstances.

Geely, controlled by Chinese billionaire Li Shufu, bought Volvo Cars from Ford in 2010, as it embarked on a go-global strategy. The company also owns a raft of foreign assets, including a big stake in Mercedes-Benz, an 8.2 stake in Swedish truck maker Volvo, a 49.9 per cent stake in Malaysian carmaker Proton and a 51 per cent holding in Lotus.

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