Lotus Tech, the luxury electric vehicle arm of sports car brand Lotus, said on Tuesday it has secured $870 million in financing ahead of the completion of its merger with blank check company L Catterton Asia Acquisition (LCAA). All of the financing was secured based on a $5.5 billion valuation. The funding reflects the confidence investors see in the growth prospects of the new combined group, Lotus Technology said in a statement. The funds will be devoted to developing next-generation automobility technologies and expanding the global distribution network.
The company said the new funding will also help Lotus Tech expand production capacity in response to market demand. The company is targeting creating new models in the electric and hybrid categories. The company also aims to strengthen its sales and aftermarket support.
In another sign of its ambitions in the US, Lotus also announced a new partnership with Santander Consumer to offer car loans to new USA customers. The lender will provide the loans through its network of US dealers. The company said the partnership is part of its strategy to increase its presence in the American market, which will help Lotus grow its sales there.
Its new flagship model, the Eletre, will be the second electric vehicle to be released by the company. The company said it will target a new generation of Lotus fans who want to experience world-class dynamic performance. It can travel up to 600 kilometers (373 miles) on one charge and accelerate from 0-100 km/h (0-62 mph) in just 2.95 seconds. The company said the car will use the latest fast-charging technology to charge it from 10-80 percent in just 20 minutes.
Lotus’s EV business is currently listed in the US, with its shares to trade on the Nasdaq under the ticker symbol LOT. The merged company is expected to be named Lotus Technology Inc. and headquartered in Wuhan, China. The company said the transaction is subject to the approval of LCAA shareholders and the satisfaction or waiver of other closing conditions.
The merger will boost the global EV industry, which is facing a battery shortage that is key to making the vehicles viable. Many of the world’s top carmakers plan to launch new EVs over the next few years, and investors are betting that these cars will become mainstream as battery prices fall. Several companies that make batteries and other parts for EVs have raised money in recent months to finance their production. The EV boom attracts private equity firms betting on the industry’s long-term potential. This is fuelling competition among EV makers and suppliers as they race to develop models to meet growing demand in China and other global markets.