The EV Market Goes Into Overdrive

SPAC Or OEM, EV News Moves Markets 

The EV market is heating up and may soon boil over. If it’s not an OEM ramping production it’s another SPAC ready to go public. In today’s news, we have a bit of both with a new SPAC getting ready to launch and an OEM expanding its EV footprint. In both cases the opportunity for investors is clear; the EV market is in overdrive and in the early phases of a hyper-growth phase that could last for decades. 

Volkswagen Aims For The Stars With EV 

Volkswagen (OTCMKTS: VLKAY) made a splash with investors that has ushered in a new wave of farfegnugen for investors. The company has goals to produce 100% electric cars and has set its sights on Tesla. The company says it will overtake the world’s leading EV manufacturer and the timing may be sooner rather than later. The company is accelerating its already ambitious plans in the EV space to allow for a doubling of production that could be completed as early as this year. Among the plans are 6 new battery facilities in the EU that would not only increase production capacity but lower the cost per unit significantly. 

Volkswagen’s first all-electric car available to US markets is hitting dealer lots this month. The car, called the ID.4, is currently manufactured in Germany and China but there are plans already in the works to shift production to the U.S. Volkswagen broke ground on a plant in Tennessee in 2019 that is expected to begin production in late 2021 with the first deliveries in 2022. 

The analysts like what they have been hearing and are upping their price targets. There have been no less than 7 major price target increases since the earnings release earlier in March. Among them is Deutsche Bank which says Volkswagen could see its price-multiple increase to match that of Tesla and other EV manufacturers if the market really latches on to the EV story. Shares of Volkswagen have been moving steadily higher all year and appear to be gearing up for another big move. Assuming that the most recent price action is a bullish triangle we think this stock could go up another $12 to $24 from current levels in the coming quarter. 

Scheduling A Time For Arrival 

Arrival is the latest to lengthen the string of EV startups choosing to go public via SPAC. Arrival is a UK-based EV company with a focus on public transportation and delivery. Its two flagship products are a public city bus that can be configured for different use-cases and a delivery van targeted at final-mile services. The SPAC launch is still up in the air but the company has been making steps in the right direction. The latest is the announcement of the first board of directors which sets the stage for public listing as early as this month. Arrival is expected to merge with CIIG Merger Corp (NASDAQ: CIIC). 

While city busses and final-mile vans are not a new thing to the EV market the Arrival production method is. The company is planning to set up rapidly scalable micro-factories that will build components for its products. 

 "Low CapEx, rapidly scalable Microfactories combined with proprietary in-house developed components, materials and software, enable the production of best in class vehicles competitively priced to fossil fuel variants and with a substantially lower total cost of ownership. This transformative approach provides cities globally with the solutions they need to create sustainable urban environments and exceptional experiences for their citizens."