Trading on NASDAQ

Shares in Lucid Motors rose 10.6 per cent on Monday in its first day of trading on the NASDAQ exchange. The company has become the fourth most valuable electric car maker in the world, but market experts are urging investors to be cautious.

Lucid Motors (LCID) went public on NASDAQ on Monday, entering the market not through an IPO process but through a merger with Churchill Capital IV.

Lucid's shares were up 5.9% on Friday, the day the merger closed, a significant gain over the broader market. The S&P 500 index added 1% on Friday, while the Dow Jones Industrial Average rose 0.7%.

Lucid Motors shares with ticker symbol LCID ended Monday trading up 10.6%, but were down 2.35% after the close of trading. Lucid's market value is valued at about $42 billion, based on 1.6 billion shares outstanding after the merger was completed. This makes Lucid the fourth most valuable electric car maker in the world after Tesla (TSLA), BYD and Nio (NIO), according to Barron's.

Lucid's market value exceeds that of a carmaker such as Ferrari (RACE) which was $39.2bn at the close of trading on Monday.

Lucid Motors was founded in 2017 and its CEO Peter Rawlinson was Tesla's technical director overseeing the launch of the Model S.

Lucid Motors has positioned itself as a manufacturer of luxury electric vehicles.

On Monday, the company said it had 11,000 paid reservations for its Lucid Air electric sedans, which will begin production later this year. When they are actually sold, the company will receive about $900 million.

The more expensive Air Dream Edition model, equipped with an autonomous driving system with 32 sensors, including a long-range lidar, will cost $162,000. Lucid also plans to launch its Gravity Performance luxury SUV in 2023. In an interview with CNBC, Lucid CEO Peter Rawlinson said the company expects to produce 20,000 vehicles in 2022 and increase production rates to more than 250,000 per year by 2026.

Funding from the merger with Churchill Capital and previous investments will be used to expand Lucid's Arizona plant. Saudi Arabia's sovereign wealth fund has invested $1bn in Lucid.

Also, with the recent opening of Lucid Studios in Illinois and New York, Lucid now has eight locations across the country.