EV startup Lotus Technology is going public
Lotus Technology makes electric cars. They are one of the most exciting startups in the world. I was excited to find out that Lotus is planning to go public, valued at around 5.4$ billion. Considering early prototypes of their cars and their market potential, I think that’s exactly the right valuation. Especially in the world where Tesla is valued at half trillion dollars.
Don’t confuse Lotus Technology with the main Lotus brand, which makes sports cars. Lotus Technology is their operation solely focused on producing electric cars.
The startup began production of their first car named Electre last year. Factory is located in now famous city of Wuhan. It’s their parent company, Geely, who’s managing day to day production and industrial tasks.
Lotus is owned by Chinese auto-conglomerate Geely, who also do manufacturing and take care of all the industrial aspects of production. Geely recently released electric vehicles of their owns with little success. It’s good to know that they are not giving up on the concept, and remain steady supporters of Lotus.
The startup is going to need the investment, because commodity prices for EV makers are really volatile. Prices on battery components change all the time. Good thing is that the management is staying focused on their ‘asset-light’ model, and continues to cooperate with a serious car manufacturer to handle industrial concerns.
This is why, in my opinion, Lotus Tech is going to be successful where others failed. I feel like startups have too much ambition and are too self assured. There are many benefits to co operating with experienced businesses, especially in auto industry that relies on precision and standardization.
Tesla is doing their own manufacturing, but we’re already seeing problem in that. There are many reports about Teslas blowing up or malfunctioning, and their poorly implanted self driving.
Lotus Technology is going the SPAC merger route to get listed. This is something a lot of startups have done in the past few years. SPAC is short for Special Purpose Acquisition Company, which means that startups merge with corporations, specifically created to speed up the process of becoming a publicly traded company.
In this case, Lotus Technology is merging with L Catterton Asia Acquisition Corporation. L Catterton is the firm supporting the startup with the IPO. Merger is purely technical, it doesn’t change anything in leadership of the startup. The CEO is going to stay the same, Qingfeng Feng. In my opinion, he’s done a great job so far.
I personally hope that Lotus becomes a successful electronic car manufacturer. I love EVs and would love to have as many options as possible. I really want to live in the world where EVs are the standard, not an exception like they were a decade ago.