We recently learned that Lucid Motors plans to go public through a special-purpose acquisition company (SPAC) merger with Churchill Capital IV (CCIV) before starting production on its much-anticipated Lucid Air electric vehicle. While an 11-figure valuation for a company that has yet to deliver a single car might sound excessive, that might not be the case. In this Fool Live video clip, recorded on March 15, Fool.com contributor Matt Frankel, CFP, and Industry Focus host Jason Moser discuss why Lucid could be an electric vehicle stock worth keeping on your watch list.

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Jason Moser: This is Churchill Capital; ticker is CCIV. Tell our listeners a little bit about what Churchill Capital is going to be bringing to the market here.

Matt Frankel: Well, I'm sure most people know this because I added this one specifically because it's the one what I see in the chat all the time. [laughs] This is the one everyone's says, what are your thoughts on this? So here we go. Let's get it over with.

Moser: Let's get your thoughts.

Frankel: Churchill Capital, it's Churchill Capital Corporation IV; this is their fourth SPAC. There's, I think, eight altogether now. I think there are seven or eight. They just launched a couple of new ones. But they're acquiring Lucid Motors. This was probably the most anticipated SPAC deal in 2021, at least. It wasn't a surprise to see that they're acquiring Lucid. This was rumored and well-known for a couple of months before, unlike most SPAC deals. Like when we heard that Social Capital [Hedosophia Holdings] V (IPOF) was acquiring SoFi. That caught everyone by surprise. This one wasn't a surprise. In fact, it was so little of a surprise that the stock ran up to $65 before it was formally announced from $10, the par value.

Moser: Wow.

Frankel: As soon as the deal was announced, it got cut in half. So now it's trading at about $27. If you want a relative bargain compared to what some people paid for it, you can get one right now. This is not a cheap deal. Lucid Motors is a pre-production auto company. They're anticipating delivering their first model which is called the Lucid Air, which looks absolutely fantastic if they can deliver. They're anticipating in the second half of this year. We'll get to the car in a second. The SPAC deal, they're getting $2.1 billion of cash from the SPAC. They're getting another $2.5 billion from the PIPE, which is the funding round that happens around the same time, which by the way, that's the biggest PIPE in history.

Moser: Remind our listeners again, really quickly, just what PIPE stands for.

Frankel: PIPE stands for private investment in public equity. It's an investment round that happens at the same time of a SPAC merger, where a bunch of big investors, say, like BlackRock is a frequent PIPE participant where they commit money to invest alongside the SPAC investors and really just add an extra element of capital. Lucid is getting well over $4 billion in this deal. Based on what the PIPE investors are paying, which is $15 a share, it values the business at $24 billion. Remember, this is a pre-production auto company, they haven't shipped a car yet. But if they can deliver, this is thought of as the biggest candidate to be the next Tesla (TSLA 3.17%), is basically the way I can describe it.

Now, don't get me wrong; Tesla is still the next Tesla. But $24 billion could be a drop in the bucket compared to a Tesla-like valuation if this company is successful. Their vision is to really redefine performance and efficiency in electric vehicles, which I thought that's what Tesla did already. [laughs] But they're making some pretty bold claims. Their car is called the Lucid Air, their first model. They already have two stores and I think one of them is in Florida, ones in California. They have some physical stores, they're taking orders. The car starts at about $70,000 and the launch edition, which is called the Air Dream Edition, is $161,000. Not a cheap car. That one has over a thousand horsepower, has a range of over 500 miles. It can go to 0-60 in 2.5 seconds, which, I'm a car guy, that's pretty impressive. It can charge and get 300 miles worth of charge in 20 minutes. If they can deliver on that, that's a car that's worth the $160,000.

Moser: That sounds impressive.

Frankel: This is supposedly the first of several models that are coming out, like the Tesla model where they do the mass-market car first and they do an SUV, then they go from there. Tesla is going with their semi and things like that. They've already introduced an SUV which they plan on in two years from now. They're really scaling up production facility in Arizona. They say it's going to be able to make 365,000 cars a year once it's fully built out. They're expecting 20,000 deliveries in 2022, so next year. I can't believe 2022 is next year already. But they're following Tesla's model where they're selling directly to consumers, which is a higher profit business model than going through dealerships. I call it like the ultimate speculation play. A $24 billion car company that hasn't delivered a car yet. But if they can deliver on what they promise, it could be worth $200 billion, easily.