Rumors and dreams are sending Churchill Capital IV (NYSE:CCIV) to the moon on Friday, with investors hoping for confirmation of a Lucid Motors SPAC merger soon. One reason for all of the speculation is the potential for Lucid to disrupt Tesla (NASDAQ:TSLA) and its electric vehicle dominance. So with “Merger Monday” the talk of the town, here is what you need to know about CCIV stock.
The story here is simple, minus the lack of merger confirmation. Bloomberg reported the blank-check company was in talks with Lucid Motors, and investors have been celebrating ever since. We have seen pops and drops in the meantime, and Churchill Capital executive Michael Klein has been working to tamper expectations.
However, those expectations are once again climbing. As of this morning, CCIV stock fans are arming themselves with a new report in the Los Angeles Times. According to writer Russ Mitchell, Lucid Motors and Churchill Capital are closing in on a deal. According to social media users, that means confirmation could be coming after the weekend. Without commentary from the companies or the requisite U.S. Securities and Exchange Commission filings, this is nothing but speculation.
Still, speculation is powerful, especially because of what Lucid Motors promises to disrupt. So with so much hype driving CCIV stock, how can you compare Lucid Motors to Tesla?
CCIV Stock: Lucid Motors vs. Tesla
To start, the two companies have a lot in common, and Lucid is already positioning itself as a Tesla killer. Like Tesla, it is looking to lead in the luxury passenger EV market, and its Air commands competitive specifications. CEO Peter Rawlinson actually got his reputation as the Model S engineer for Tesla, and has been described as a similarly charismatic and quirky leader. Unlike Musk, Hannah Elliott wrote for Bloomberg that Rawlinson is an artistic sort who once considered pursuing art school.
However, there are two differences that investors should pay attention to. The first, and perhaps the most obvious, difference between the two companies is that Tesla is an established, industry-leading automaker that has also put legacy brands like Ford (NYSE:F) and General Motors (NYSE:GM) to shame. It has multiple models available and an international footprint. Lucid Motors on the other hand is just getting off the ground, planning to start deliveries of its flagship Air later this year.
But the second difference is what has CCIV stock on the move. Rawlinson benefits from his exposure to life at Tesla — he knows what to tweak to beat the giant. As Joann Muller wrote today for Axios, that difference is that Lucid Motors has a “methodical” manufacturing plan. Lucid has a factory underway in Casa Grande, Arizona, that one day will be capable of producing 400,000 cars. Instead of ramping to that overnight, the company is embracing just-in-time supply chains. This means it will gradually build capacity as capital allows, starting with just 7,000 cars in 2021.
The Bottom Line
Lucid Motors is taking this manufacturing approach to avoid what some have dubbed a “production hell” at Tesla. That does not guarantee Lucid Motors will have better — or even equal — success than Tesla. However, for those trying to get in on the ground floor before a Lucid Motors SPAC merger, it is another justification for the hype.
For investors then, continue to proceed with caution. There is a lot to like about Lucid Motors, but there are also plenty of risks.
On the date of publication, Sarah Smith did not have (either directly or indirectly) any positions in the securities mentioned in this article.
Sarah Smith is a Web Content Producer for InvestorPlace.com.