Three Up And Comers In The EV Car Market

Electric Vehicles Are The Future

I think it is unlikely that electric vehicles will ever account for 100% of the market but it is assured the market for EV, and market share, will continue to grow. At only 2.6% of the world’s auto fleet and 2.4% of sales (2019 figures), there is quite a bit of room to grow. Tesla (NASDAQ:TSLA) is only the most visible EV car manufacturer, not the only EV market or even the best positioned. When it comes to sales Tesla is churning out the most on a global basis but GM (NYSE:GM) leads sales in China and is on track to dominate the U.S., too, if the Nikola (NASDAQ:NKLA) deal pans out. What I’m getting at is three are more ways than one to gain exposure to this multi-billion dollar growth opportunity.

Attack of The SPACs, EV Companies Are Coming To Market

Nikola grabbed the market’s attention for more reasons than one when it went public. Instead of taking the traditional IPO route, the company chose to use a SPAC. A SPAC is a Special Purpose Acquisition Company formed with the intent of buying specific assets. In essence, a SPAC is an SEC-approved shell company with no operations and specific purpose. It becomes a “real” corporation upon purchase of operational assets which in this case are EV manufacturers. This is important because not one but three other EV makers are on track to SPAC this year.

Lordstown Motors (RIDE) Part Of GMs EV Strategy

Lordstown Motors is an Ohio-based EV startup with a full-sized dual-cabin pickup truck in production. The company, interestingly, is headquartered in GMs old Lordstown plant and part of GMs EV strategy. The company announced its plans to go public a few months ago and will trade under the ticker symbol (RIDE). The deal values the company at $1.6 billion dollars and includes $675 of production capital. Lordstown Motors expects to begin production sometime in 2021. The merger is with DiamondPeak Holding Company (OTCMKTS:DPHCU) and is expected to close in the 4th quarter of 2020. GM’s stake is worth $75 and makes a nice compliment to its deal with Nikola.

Fisker Is The Luxury End Of The EV Car Market

Fisker Inc. is a U.S. based EV manufacturer of luxury vehicles. It is a re-launch of former Fisker Automotive which failed in 2014 due to issues with a battery supplier. The company is developing a passenger sedan with a 400-mile range as well as solutions for mass-market and public transportation. The mass-market Ocean model has been called the world’s greenest car. The company is working on a deal with Apollo Management Group to merge with Spartan Energy (NASDAQ:SPAQ). The deal values the company at over $2.5 billion and is expected to close in the 4th quarter. Proceeds from the deal are expected to bring the Ocean model to production in early 2022.

Canoo Is Going With The Flow

Canoo (CNOO) will be the 4th EV company to go public via SPAC this year. The company is trying to innovate not only the EV market but the entire car market with its subscription service. The company is not selling its cars its selling a lifestyle. Members, once approved, pay a flat monthly fee and drive the car worry-free. The membership includes registration, maintenance, charging, and even access to insurance. Canoo intends to go public in the 4th quarter via a merger with the Hennesey Capital Acquisition Company (NASDAQ:HCAC). The deal values the company at roughly $2.4 billion, the first model is expected to go into production in 2022.