The demand for electric vehicles (EVs) is fueling on the back of climate change concerns, favorable government policies and superior technologies. Investors are intrigued by automakers that look for solutions to lower global carbon emissions for providing a cleaner energy future. With green vehicles striking the right chord with investors, it has been raining IPOs in the EV market this year. Seemingly, merger with special purpose acquisition companies (SPACs) turned out to be the most popular course of action for an EV IPO in 2020.
SPACs, often dubbed as blank-check companies, have disrupted the traditional IPO market. SPACs are flourishing in the EV market, helping startups to avoid the complexity and strenuous paperwork associated with the traditional IPO. Many EV companies chose to go public this year via reverse mergers with SPACs, a faster, simpler and less demanding process than the conventional means of making a debut on the stock market.
Key EV Names That IPOed the SPAC Way in 2020
Nikola Corporation NKLA: Hydrogen truck maker Nikola got listed on Nasdaq after a reverse merger with VectoIQ on Jun 3. The firm was all set to heat up the EV race until a report from Hindenburg Research surfaced, accusing the electric-truck maker of fraudulent practices within the company. Amid the allegations, General Motors GM backed out of the original deal with Nikola and worked out a revised agreement, per which it would supply hydrogen fuel cells to the latter. However, the U.S. auto biggie would no longer manufacture the Badger truck for Nikola, as originally planned. With that, Nikola’s Badger EV pickup project has been abandoned altogether. Meanwhile, Nikola is optimistic about commencing production and sale of the Nikola Tre — a fully-electric truck — by fourth-quarter 2021.
Hyliion Holdings Corp. HYLN: EV truck company Hyliion made its debut on the NYSE on Oct 2 by merging with Tortoise Acquisition Corporation. Per the company’s presentation, Hyliion expects to generate sales of $344 million in 2022 and more than $2 billion in 2024. The company projects EBITDA of $8 million in 2022, which will rise to $602 million by 2024. Hyliion currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Fisker Inc. FSR: EV maker Fisker made its public debut on NYSE on Oct 30 via a merger with Spartan Energy Acquisition, an affiliate of Apollo Global Management (NYSE:APO). Fisker’s electric SUV called Fisker Ocean is expected to hit the roads by 2022. The Ocean SUV has a range of 250-300 miles on a single recharge. Fisker is in talks with Volkswagen (DE:VOWG_p) to power its SUV using the Germany-based auto giant’s MEB platform. Fisker Emotion, a luxury sedan that grabbed limelight at the Consumer Electronics Show in 2018, is waiting in the wings and the firm has not decided upon its launch date yet.
Lordstown Motors Corporation RIDE: Lordstown Motors made its NASDAQ debut on Oct 26, after completing a reverse merger last week with DiamondPeak Holdings Corp. Boasting 600 horsepower and a range exceeding 250 miles on a single recharge, Lordstown Endurance is one of the most anticipated electric pickups of 2021. Deliveries are expected to commence next year and production is likely to ramp up throughout 2022.
QuantumScape Corporation QS: EV battery maker QuantumScape made its NYSE debut on Nov 27 through a reverse merger with Kensington Capital Acquisition. The Bill Gates-backed EV battery supplier is developing the next generation of batteries utilizing lithium metal, which has a significantly higher energy density than lithium ion. According to QuantumScape's eight-year plan, it doesn't expect to generate revenues until 2024 and won't be able to drive positive free cash flows until 2028. Automotive giant Volkswagen VWAGY is the primary shareholder, inspiring investors’ confidence in the business' legitimacy.
Track Upcoming SPAC IPOs in EV Space
The Lion Electric Company: Around a week back, Canada-based electric truck and bus manufacturer Lion Electric announced plans to go public through a merger with SPAC firm Northern Genesis Acquisition Corp. The combined entity will have a pro-forma implied market cap of $1.9 billion. The deal is expected to close in first-quarter 2021. Post deal completion, Lion will be listed on NYSE under the ticker ‘LEV’.
Lion Electric is a noted name when it comes to electric medium and heavy-duty trucks, with a manufacturing capacity of 2,500 vehicles a year. The Lion6 and Lion8 battery-powered trucks are attracting orders from customers like Amazon (NASDAQ:AMZN) and Canadian National Railway Company. With more than 300 vehicles on the road currently, Lion Electric is ready to roar with ramped up deliveries of around 650 trucks and buses in 2021.
Arrival: A month back, U.K.-based EV startup Arrival announced that it is going public via a reverse merger with CIIG Merger Corporation. The merger is expected to value Arrival at $5.4 billion. The deal is scheduled for closure in first-quarter 2021, post which Arrival will be listed on NASDAQ under the ticker ‘ARVL’.
Founded in 2015, Arrival mainly focuses on two product lines, i.e. e-vans and e-buses. The company has already signed contracts with order value of around $1.2 billion. The company plans to ramp up full production of buses and vans in fourth-quarter 2021 and 2022, respectively. It projects revenues of $14.1 billion in 2024. Early this year, Arrival landed a huge contract to supply 10,000 delivery vans to United Parcel Service (NYSE:UPS), Inc. UPS.
Canoo Holdings Ltd: In August, this EV startup announced that it would go public, at a valuation of around $2.4 billion, via merger with Hennessy Capital Acquisition Corp. IV. The company is soon set to make its debut on NASDAQ under the ticker ‘EVGO’, after Hennessy Capital shareholders vote in favor of the pending merger on Dec 21.
The company’s modular skateboard platform would support a broad range of vehicle applications for both consumers and businesses. Canoo is set to disrupt the auto landscape with breakthrough technologies, innovative design and the subscription-based model. The first Canoo vehicles will be available via subscription starting in the second quarter of 2022. The company’s first business-to-business vehicle is slated for delivery in 2023. Canoo anticipates developing 10,000 vehicles in 2022, which would increase to around 50,000 in 2024. The firm projects revenues of $1.43 billion in 2024.
ChargePoint, Inc.: In September, the EV charging stalwart ChargePoint announced taking the SPAC route to go public as it plans to merge with Switchback Energy Acquisition. The merger deal valued at $2.4 billion is scheduled for closure by year end, post which the combined entity will be named ChargePoint Holdings Inc. and get listed on the NYSE.
ChargePoint offers more than 115,000 charging spots worldwide. It provides access to 133,000 additional charging locations via network roaming integrations across North America and Europe. ChargePoint’s revenue prospects look rosy as the firm is the largest EV charging network in the world and is poised to grow amid increasing needs of the global electric transport market.
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