Bernard Arnault makes moves for the luxury EV market in a new deal with Lotus

Bernard Arnault, the world’s richest man, could also be taking over Elon Musk, the second richest, to see who will lead the premium electrical car market—at the very least on the subject of exclusivity and model cachet. 

The Frenchman, head of luxurious items group LVMH, plans to assist take area of interest English sports activities automotive model Lotus public via a so-called SPAC deal within the latter half of this 12 months. 

In a assertion revealed Tuesday, the Arnault-affiliated “clean examine” funding car L Catterton Asia Acquisition Corp stated it agreed to a reverse merger with Lotus Know-how in a deal that may successfully worth the latter at $5.4 billion in mixed fairness and debt. 

The privately held carmaker’s present shareholders, which embody Hangzhou-based Zhejiang Geely Holding, will retain 89.7% of the merged entity assuming no LCAA buyers redeem their Nasdaq-listed shares.

“The worldwide EV market is increasing quickly, with the posh phase rising at a sooner tempo than the broader business,” stated Chinta Bhagat, co-CEO of LCAA, within the assertion. “Lotus Tech is nicely positioned to profit from these dynamics.” 

LVMH couldn’t be reached by Fortune for remark.

Though Arnault cobbled collectively Europe’s most beneficial firm via a long time of methodical acquisitions, it’s extraordinarily unlikely he has any intention of rivaling Elon Musk in his personal EV market.

That’s as a result of Lotus, majority-owned by Chinese language automotive billionaire Li Shufu through his Geely Holding, is definitely fairly small—even by area of interest model requirements.

Lotus has the sort of heritage that appeals to Arnault

In 2021, the ultimate 12 months of manufacturing for the Elise, Exige, and Evora automotive fashions, the Norfolk-based Lotus firm offered simply 1,710 new vehicles—and that was its greatest lead to a decade. All advised, Lotus has barely constructed greater than 100,000 automobiles in its historical past.

By comparability, Tesla offered over 1.3 million automobiles final 12 months, almost 67,000 of which had been its luxurious S and X fashions. Tesla forecasts it might promote 1.8 million in 2023, and probably much more.

But Lotus does function what appeals to Arnault: a European heritage and luxurious cachet it traces again 75 years to when cofounder Colin Chapman constructed his first automotive in a London storage.  

The model first achieved prominence within the 1977 movie The Spy Who Liked Me, when fictional British undercover agent James Bond traded in his Aston Martin DBS for the wedge-shaped Lotus Esprit S1, designed by business legend Giorgetto Giugaro. 

Whereas it has gone via a slew of various homeowners that didn’t translate its earlier successes in motorsport right into a thriving enterprise, Lotus has nonetheless retained a sure mystique.

It was this storied repute that helped appeal to the extremely revered auto supervisor Jean-Marc Gales in Might 2014 to function its CEO for 4 years. The native Luxembourger stabilized the troubled firm and helped it obtain profitability previous to the 2017 sale to Shufu and the latter’s minority associate within the deal, Etika Automotiv of Malaysia.

Along with the brand new Lotus Emira that launched in November and the £89,500 ($110,155)-priced Eletre SUV that rolls into markets from the primary quarter of this 12 months, the EV carmaker plans to make use of the funds from the reverse IPO to develop a midsize SUV and a full-size sedan over the subsequent 4 years. 

Necessary, nonetheless, is that it goals to keep away from saddling itself with any fastened prices by partnering to have its vehicles constructed at Geely’s Wuhan plant in China.

There’s yet one more historic significance to the model that may attraction to Arnault: As a consequence of Lotus’s longtime concentrate on engineering light-weight sports activities vehicles, the Elise’s chassis served because the underpinnings for the unique battery-powered Tesla Roadster. 

To this present day that reality nonetheless irks Musk, who two years in the past known as it a “super-dumb technique.”

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By Samy