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Derek Jenkins, VP of Design at Lucid Motors, introduces the alpha prototype of the Lucid Air at the 2017 New York International Auto Show in New York City.

Andrew Kelly/Reuters

Electric vehicle sensation Lucid Motors has set the market alight this week with a $24 billion blank check deal to list in New York, but it has also sparked concerns among some investors of a short circuit in the valuation of electric vehicle makers.

Shares of Churchill Capital IV Corp fell more than 40% on Tuesday, a day after it agreed to merge with Lucid, which makes luxury electric vehicles but is still yet to formally start producing cars or generate meaningful revenue.

The deal, valued the combined firm at a pro-forma equity value of $24 billion, just a fraction of Elon Musk’s Tesla , but still the biggest ever involving so-called special purpose acquisition companies (SPACs).

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“We’re bringing the world’s best technology to the market this year, here in the U.S. I think the valuation is a reflection of our technology,” Chief Executive Officer Peter Rawlinson told CNBC on Tuesday when asked whether Lucid’s valuation made him nervous.

The massive run jump in valuations of a number of EV startups that have barely any meaningful headcount, a go-to-market product or any revenue, for that matter, has drawn comparisons to the dotcom bubble of 1999-2000, with analysts and investors expecting a near-term correction.

“The EV sector feels like it’s going through a correction. Lucid’s SPAC-IPO probably (is) driving circular negative reinforcement,” said Roth Capital Partners analyst Craig Irwin.

“We think Tesla has been valued for teleportation, so the correction is probably a very healthy thing. This allows investors to watch for potential entry points in names they feel they might have missed,” he added.

Lucid, run by an ex-Tesla engineer, is the latest EV firm to tap U.S. capital markets, with investors rushing into the sector as tougher emission norms drive a switch to electric vehicles.

Lucid, with its roster of deep-pocketed financial backers, is one of the strongest of the flock of startups challenging Tesla’s dominance.

After Lucid priced its sedan, starting at $77,400, Musk announced a price cut to its flagship Model S sedan. “The gauntlet has been thrown down!” he tweeted.

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However, Lucid’s five-year timeline to get to production of 251,000 vehicles a year is a reminder of the challenges of scaling up mass production in the auto industry.

Lucid has said it is on track to start production and deliveries in North America in the second half of this year with Lucid Air, its first luxury sedan. It had previously said it planned to start its deliveries in spring of 2021.

The publicly traded shares of CCIV, backed by former Citigroup banker Michael Klein, fell nearly 44% to $32.35 in early trade, giving the merged company a market capitalization of about $52 billion.

By comparison, General Motors Co was worth about $76 billion as at Monday’s close, while China’s electric car maker Nio was valued at $79 billion in pre-market trade on Tuesday.

Shares in Tesla, which have surged more than 10 times in value over the past year to around $900, were down another 4.5% in morning trade, after falling 9% on Monday

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